Efficiency wages are paid only to discourage shirking

Efficiency wages discourage shirking because they create an excess supply of labour, so a shirking worker who was dismissed might face a lengthy period of unemployment

The no shirking constraint curve shows the number of non-shirkers who could be hired at each wage

The efficiency wage is above the market wage

It is always illegal for employers in the UK to discriminate on race or gender

Employers are most likely to discriminate against applicants from particular groups if the wage is held above the market wage, for example because of a minimum wage law.

It is irrational for a profit-maximizing firm to pay different wages to different genders for the same work, unless they or their clients believe one gender performs better than the other

Females earn less on average than males, partly because within each occupation, males hold a disproportionate share of the better paid jobs, and partly because women tend more often to work in low paid occupations

Whether to buy a new loom during the next three months

How much labour to hire over the next three months

How much wool to buy over the next three months

Whether to hire an extra warehouse for the next three months

The whole income of these people is economic rent because land as a whole is in perfectly inelastic supply

The whole income of these people is transfer earnings, because if the rent was any lower they would not bother to rent out their land

The income of these people is divided between economic rent and transfer earnings, and some people have higher transfer earnings and lower economic rent than others.

The income of these people is divided between economic rent and transfer earnings, and the proportion of this income which is economic rent is the same for all of them

The future value of Rs.1,000 in three years’ time is Rs.1,300

The present value of Rs.1,300 in three years’ time is Rs.1,000

The future value of Rs.1,331 in three years’ time is Rs.1,000

The present value of Rs.1,331 in three years’ time is Rs.1,000