Firms with Internal Labor Markets Have More Flexibility in Deciding

Multiple Choice

Firms with internal labor markets have more flexibility in deciding the level and time profile of wages because

A) individuals tend to base their employment decisions on their entire career earnings.
B) they have to pay the wage rate that equals the marginal revenue product of labor.
C) compensating wage differentials do not have to be paid in internal job markets.
D) firm-specific human capital is less costly than general human capital.