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Practice mode Capital Formation, Investment Choice, Information Technology, And Technical Progress

What is the efficiency wage?

Correct answer D. Wage rate divided by the productivity of labor

Explanation

In development economics the efficiency wage is the wage rate divided by labour productivity, so a high wage can still mean cheap labour if workers are highly productive.

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Question 03 Capital Formation, Investment Choice, Information Technology, And Technical Progress

Internal economies of scale produce a continuously falling average cost curve, making more than one firm in the industry inefficient. What does this illustrate?

Correct answer A. A natural monopoly

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