Total Compensation Chapter 7 Quiz

A manager of a company could be a factor affecting the company's external competitiveness.

True

Human capital theory assumes that people are paid at the value of their marginal product.

True

Research shows that a lead pay strategy reduces turnover.

True

Graduating students usually find themselves in a quoted-labor market.

True

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

variable pay

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

To increase turnover rates

Combat pay premiums paid to military personnel to offset some of the risk of being fired upon is an example of a lead pay-level policy.

True

The three factors usually used to determine the relevant labor markets are the occupation, geography, and competitors.

True

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

higher turnover rates

Employers in highly competitive markets are more able to raise prices without loss of revenues.

False

Wages in labor-intensive industries are generally higher than in technology-intensive industries.

False

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

Which of the following is an example of a quoted-price market?

Nile, a website that allows sellers to sell their products for a fixed price

_____ 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.

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

match policy

Which of the following statements is true of pay level?

Pay level is directly proportional to labor costs

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 than data from labor market competitors?

Product demand is responsive to price changes