The size of a firm is related systematically to differences in wages.Question 1Answera.TRUEb.FALSE

The statement that "the size of a firm is related systematically to differences in wages" is generally considered to be true. Empirical studies and labor economics suggest that larger firms often pay higher wages than smaller ones. This can be due to several reasons, including:

1. Economies of Scale: Larger firms may benefit from reduced costs per unit due to higher production levels, allowing them to pay their employees more.

2. Access to Resources: Bigger firms usually have more financial resources, enabling them to offer better compensation packages to attract and retain talent.

3. Job Security: Larger firms might offer more stability and job security compared to smaller firms, influencing wage structures.

4. Market Power: Larger companies often have more market power, which can lead to higher profit margins and subsequently higher wages.

In light of these points, the correct answer to the question is:

Final Answer

a. TRUE