Compensations - Quiz 5 Chapter 7

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

All of the following are advantages of a lead pay-level policy EXCEPT ________

high turnover rates

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

lead policy

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

the ability to pay

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

the marginal product of labor

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

variable pay

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 policy that is most closely associated with the decreased ability to attract employees is a (n) ______ policy.

lag

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 at which the _____ of the hire is equal to the _____ for that hire

marginal revenue; wage rate

______ puts a ld on the maximum pay level an employer can set

the product market

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

to increase turnover rates

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

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

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

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

The most common pay policy is a (n)

match policy

The market pay rate is the:

point at which supply and demand lines cross

Druk Inc. is a consulting firm with 10 employees. Each new client generates $10,000 in revenue. If the company hires another employee who brings in five new clients and all other factors of production are constant, which of the following statements is true?

Druk needs to pay $50,000 as wage to the eleventh employee to break even

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

Pay level offered by an employer

In which of the following conditions would product market competitors data be given more weight that data from labor market competitors

Product demand is responsive to price changes