Compensation Administration Chap 7 TNTech

Employers continue to hire until the marginal revenue of the last hire equals his or her wage rate. This is based on the first labor market theory assumption that:

employers seek to maximize profits.

The _____ theory is the most influential in explaining pay-level differences.

human capital

Pay level decisions have a significant impact on expenses. Other things being equal, the higher the pay level, the higher the:

labor costs.

The pay-level policy that is most likely to reduce pay dissatisfaction is a(n) _____.

lead policy

In a hiring situation, considering that other potential costs will not change in the short run, the level of demand that maximizes profits is that level at which the _____ of the last hire is equal to the _____ for that hire.

marginal revenue; wage rate

All of the following are important factors in defining a market for compensation purposes EXCEPT:

the ability to pay.

The assumption of the upward sloping supply curve that offers of higher pay will increase supply will most likely NOT hold when _____.

unemployment is low

A study of graduating college students found they sought jobs with all of the following pay characteristics EXCEPT _____.

variable pay

The pay-mix policy alternative in which the percentage of benefits is likely to be the highest is known as _____.

work/life balance policy

Which of the following is an example of the demand side of labor?

Pay level offered by an employer

Wages tend to be the lowest in which of the following industries?

Education and health care

Which of the following is an example of a bourse market?

Flatcake, a website that allows buyers to negotiate the prices with the sellers of handmade goods

_____ refers to the average of the array of rates inside an organization.

Pay level

Which of the following is NOT true of the relationship between employer size and its ability to pay?

Talented individuals have a lower marginal value in a larger organization.

If Company A raises its pay rate by one dollar per hour to hire additional workers and competitors immediately match the increase, what will be the most likely result?

The labor costs for Company A will increase, but it will be unable to hire additional workers.

_____ is the additional output associated with the employment of one additional person, with other production factors held constant.

The marginal product of labor

_____ puts a lid on the maximum pay level an employer can set.

The product market

A small lawn care company has two mowers and four employees. If it hires another employee and the factors of production remain the same, how will the productivity of the fifth employee compare to that of the current four employees?

The productivity will reduce.

_____ is an example of a bourse.

The total compensation for a top athlete

Which of the following is NOT a reason a company might pay base wages above market?

To increase turnover rates

The most common pay policy is a(n) _____.

match policy

The market pay rate is the:

point at which supply and demand lines cross.

Evidence shows that in manufacturing, _____ is positively correlated with hourly wage level.

productivity

Among pay-mix alternatives, the percentage of base pay is highest in _____.

security or commitment policy