Question 1

Although labour market conditions and legal requirements put a floor on the pay level required to attract sufficient employees, the ____________puts a lid on the maximum pay level that an employer can set.

Accepted Answer

A)  product market
B)  employee turnover
C)  labour demand
D)  job market
E)  labour supply A

Question 2

Define the marginal revenue of labour.

Accepted Answer

The marginal revenue of labour...

Question 3

Both pay level and pay forms focus on two objectives: to control costs and to reduce the need for employees.

Accepted Answer

A) True 
 B)False  False

Question 4

What is marginal product of labour?

Accepted Answer

The marginal product of labour is the additional output associated with the employment of one additional human resources unit, with other production factors held constant.

Question 5

External competitiveness is expressed in practice by:

Accepted Answer

A)  comparing the performance of departments within an organization
B)  increasing the compensation differences between employees in an organization
C)  encouraging the competitiveness of employees within an organization
D)  setting a pay level that is above, below, or equal to competitors'
E)  equalizing pay for all employees within the organization, irrespective of seniority

Question 6

The mix of the various types of payments that make up total compensation is known as:

Accepted Answer

A)  wage grade
B)  pay back
C)  pay forms
D)  average wage
E)  pay level

Question 7

Compensating differentials theory states that:

Accepted Answer

A)  higher wages must be offered to employees when chances of success are high
B)  higher wages must be offered to employees to compensate for any negative features of jobs
C)  high wages will increase efficiency and lower labour costs if they lower turnover
D)  job seekers have a reservation wage level below which they will not accept a job offer
E)  pay levels and pay mix are designed to signal desired employee behaviours

Question 8

The human capital theory assumes that people are paid at the value of their reservation wage.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is a result of following the pay with competition (match) theory?

Accepted Answer

A)  an increase in voluntary turnover
B)  a decrease in the pool of qualified applicants
C)  an increase in operating expenses
D)  an increase in the probability of union-free status
E)  an increase in pay-related work stoppages

Question 10

Discuss the predictions of the compensating differentials theory.

Accepted Answer

Compensating differentials theory says t...

Question 11

The marginal revenue of labour refers to:

Accepted Answer

A)  he technology employed by organizations
B)  the difference in technology across industries and new technology within the same industry
C)  the additional output from the employment of one additional person
D)  the level of demand for a product
E)  the low-wage, no-mix strategy employed by organizations

Question 12

The data from product market competitors are likely to receive greater weight when:

Accepted Answer

A)  product demand is not related to price changes
B)  the level of skill needed to perform the job is high
C)  the supply of labour is not responsive to changes in pay
D)  employee skills are not specific to the product market
E)  labour costs are a small share of total costs

Question 13

Which of the following is an assumption of economic theories of labour markets?

Accepted Answer

A)  There is a huge advantage for a single employer to pay above the market rate.
B)  Pay rates reflect only the base wage associated with employment.
C)  People are homogenous and therefore interchangeable.
D)  There is a huge advantage for a single employer to pay below the market rate.
E)  Employers are not always interested in maximizing profits.

Question 14

The wage level below which an employee declines a job offer is known as a:

Accepted Answer

A)  living wage level
B)  competitive wage level
C)  reservation wage level
D)  prevailing wage level
E)  market wage level

Question 15

Marginal product and marginal revenue are directly measurable.

Accepted Answer

A) True 
 B)False

Question 16

Competition in the labour market for people with various skills is a product market factor that shapes external competitiveness.

Accepted Answer

A) True 
 B)False

Question 17

The additional income generated when a firm employs one additional unit of human resources, with other production factors held constant is known as the marginal ________.

Accepted Answer

A)  revenue of labour
B)  cost of labour
C)  input
D)  net income
E)  labour expenditure

Question 18

Signalling theory assumes that an employer who combines lower base with high bonuses may be signalling that it wants employees who are risk takers.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following statements about external competitiveness is true?

Accepted Answer

A)  External competitiveness refers to an organization's pay relative to other organizations.
B)  External competitiveness refers to the total compensation paid by an employer to an employee.
C)  External competitiveness refers to pay relationships among employees of an organization.
D)  External competitiveness refers to the budget allocation for a department relative to other departments in an organization.
E)  External competitiveness refers to the competitiveness between employees of an organization.

Question 20

Which labour demand theory says that pay levels and pay mix are designed to indicate desired employee behaviours?

Accepted Answer

A)  human capital theory
B)  signalling theory
C)  efficiency wage theory
D)  reservation wage theory
E)  compensating differentials theory

Exam 7: Defining Competitiveness

Although labour market conditions and legal requirements put a floor on the pay level required to attract sufficient employees, the ____________puts a lid on the maximum pay level that an employer can set.

Correct AnswerverifiedA

Define the marginal revenue of labour.

Correct AnswerverifiedThe marginal revenue of labour...View AnswerShow Answer

Both pay level and pay forms focus on two objectives: to control costs and to reduce the need for employees.

Correct AnswerverifiedFalse

What is marginal product of labour?

Correct AnswerverifiedThe marginal product of labour is the additional output associated with the employment of one additional human resources unit, with other production factors held constant.

External competitiveness is expressed in practice by:

Correct AnswerverifiedShow Answer

The mix of the various types of payments that make up total compensation is known as:

Correct AnswerverifiedShow Answer

Compensating differentials theory states that:

Correct AnswerverifiedShow Answer

The human capital theory assumes that people are paid at the value of their reservation wage.

Correct AnswerverifiedShow Answer

Which of the following is a result of following the pay with competition (match) theory?

Correct AnswerverifiedShow Answer

Discuss the predictions of the compensating differentials theory.

Correct AnswerverifiedCompensating differentials theory says t...View AnswerShow Answer

The marginal revenue of labour refers to:

Correct AnswerverifiedShow Answer

The data from product market competitors are likely to receive greater weight when:

Correct AnswerverifiedShow Answer

Which of the following is an assumption of economic theories of labour markets?

Correct AnswerverifiedShow Answer

The wage level below which an employee declines a job offer is known as a:

Correct AnswerverifiedShow Answer

Marginal product and marginal revenue are directly measurable.

Correct AnswerverifiedShow Answer

Competition in the labour market for people with various skills is a product market factor that shapes external competitiveness.

Correct AnswerverifiedShow Answer

The additional income generated when a firm employs one additional unit of human resources, with other production factors held constant is known as the marginal ________.

Correct AnswerverifiedShow Answer

Signalling theory assumes that an employer who combines lower base with high bonuses may be signalling that it wants employees who are risk takers.

Correct AnswerverifiedShow Answer

Which of the following statements about external competitiveness is true?

Correct AnswerverifiedShow Answer

Which labour demand theory says that pay levels and pay mix are designed to indicate desired employee behaviours?

Correct AnswerverifiedShow Answer

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The marginal revenue of labour...
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The marginal product of labour is the additional output associated with the employment of one additional human resources unit, with other production factors held constant.

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Compensating differentials theory says t...
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