An increase in unemployment benefits causes the no-shirking wage to Choose... An

Question

An increase in unemployment benefits causes the no-shirking wage to Choose... An increase in the disutility of effort causes the no-shirking wage to Choose... An increase in the probability that a shirking employee is detected causes the no-shirking wage to Choose... An increase in the probability of finding a new job causes the no-shirking wage to Choose.. Select the correct statements, with reference to the no-shirking model in Section 11.8 ("macroeconomic application: labor discipline and the wage curve") Select one or more: a. In each round, all the employees that shirked lose their jobs. O b. An increase in the unemployment rate implies an increase in the no-shirking wage. C.The lower the unemployment rate, the higher the no-shirking wage. d. Even if an employee receives a wage higher than the no-shirking wage, he will continue to shirk with some e. In each round, all the employees that didn't shirk keep their jobs. f. In this model, if employers had a perfect monitoring technology that allowed them to detect every single shirking worker, the wage would fall to zero.

Explanation / Answer

* An Increase in the unemployment causes the no shriking wages to decrease

* An increase in the disutility of effort causes the non shrinking wages to decrease

* An increase in the probability that shriking employee is detected causes the non shriking wages to increase

*An increase in the probability of finding a new job causes the non shriking wages to increase

part B

The correct statments are

*An increase in the unemployment rate implies increase in the no shriking wage

*In each round all the employees that didnt shrik keep their jobs

*In this model if employers had a perfect monitoring technology that allowed them to detect every single shriking worker ,the wage would fall to zero

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