MGT Chap 7

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

higher 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.

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.

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 level at which the _____ of the last hire is equal to the _____ for that hire.

marginal revenue; wage rate

The market pay rate is the:

point at which supply and demand lines cross.

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

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.

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.

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.

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

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

Pay level offered by an employer