Question 1

Given the choice to match, lead, or lag, the most common competitive pay policy is to match rates paid by competitors.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

What are two key product market factors that affect the ability of the organization to change what it charges for its products and services?

Accepted Answer

A)  marginal product of labour and marginal revenue of labour
B)  product demand and the degree of competition
C)  industry and product technology
D)  reservation wage and human capital
E)  efficiency wage and reservation wage

Question 4

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.

Accepted Answer

A) True 
 B)False

Question 5

Define the marginal revenue of labour.

Accepted Answer

The marginal revenue of labour is the money generated by the sale of the marginal product-the additional output from the employment of one additional person.

Question 6

What does compensating differentials theory say?

Accepted Answer

Compensating differentials the...

Question 7

Discuss the predictions of reservation wage theory and human capital theory.

Accepted Answer

Reservation wage theory says that job se...

Question 8

A(n) policy maximizes the ability to attract and retain quality employees and minimizes employee dissatisfaction with pay.

Accepted Answer

A)  employment equity
B)  high-turnover
C)  lag
D)  gap
E)  lead

Question 9

Discuss the predictions of the compensating differentials theory.

Accepted Answer

Compensating differentials theory says t...

Question 10

A policy to pay below market rates is known as a(n) policy.

Accepted Answer

A)  payroll deduction
B)  lag
C)  lead
D)  edge
E)  market match

Question 11

Which of the following is true about human capital theory?

Accepted Answer

A)  It assumes that job seekers have a reservation wage level below which they will not accept a job offer.
B)  It assumes that high wages lower labour costs if they reduce the need to supervise employees.
C)  It assumes employers deliberately design pay levels to signal desired employee behaviours.
D)  It assumes that people are paid at the value of their reservation wage, not marginal product.
E)  It assumes that improving productivity by investing in training will increase one's marginal product. E

Question 12

The marginal revenue of labour is the additional output associated with the employment of one additional human resources unit.

Accepted Answer

A) True 
 B)False

Question 13

Pay policies indicate the kinds of behaviour an employer seeks. This is a prediction of ________ labour demand theory.

Accepted Answer

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

Question 14

Pay level is the average of the array of rates paid by an employer.

Accepted Answer

A) True 
 B)False

Question 15

A policy to pay below market rates may hinder a firm's ability to attract potential employees.

Accepted Answer

A) True 
 B)False

Question 16

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 17

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 18

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 C

Question 19

Efficiency wage theory says that sometimes high wages may:

Accepted Answer

A)  increase efficiency if they reduce "shirking"
B)  lower labour costs if they increase the need to supervise employees
C)  lower labour costs if they attract low-quality applicants
D)  increase efficiency if they increase turnover
E)  increase efficiency if they reduce worker effort

Question 20

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

Exam 7: Defining Competitiveness

Given the choice to match, lead, or lag, the most common competitive pay policy is to match rates paid by competitors.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What are two key product market factors that affect the ability of the organization to change what it charges for its products and services?

Correct AnswerverifiedShow 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.

Correct AnswerverifiedShow Answer

Define the marginal revenue of labour.

Correct AnswerverifiedThe marginal revenue of labour is the money generated by the sale of the marginal product-the additional output from the employment of one additional person.

What does compensating differentials theory say?

Correct AnswerverifiedCompensating differentials the...View AnswerShow Answer

Discuss the predictions of reservation wage theory and human capital theory.

Correct AnswerverifiedReservation wage theory says that job se...View AnswerShow Answer

A(n) policy maximizes the ability to attract and retain quality employees and minimizes employee dissatisfaction with pay.

Correct AnswerverifiedShow Answer

Discuss the predictions of the compensating differentials theory.

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

A policy to pay below market rates is known as a(n) policy.

Correct AnswerverifiedShow Answer

Which of the following is true about human capital theory?

Correct AnswerverifiedE

The marginal revenue of labour is the additional output associated with the employment of one additional human resources unit.

Correct AnswerverifiedShow Answer

Pay policies indicate the kinds of behaviour an employer seeks. This is a prediction of ________ labour demand theory.

Correct AnswerverifiedShow Answer

Pay level is the average of the array of rates paid by an employer.

Correct AnswerverifiedShow Answer

A policy to pay below market rates may hinder a firm's ability to attract potential employees.

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedC

Efficiency wage theory says that sometimes high wages may:

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

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The marginal revenue of labour is the money generated by the sale of the marginal product-the additional output from the employment of one additional person.

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Compensating differentials the...
View Answer

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Reservation wage theory says that job se...
View Answer

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Compensating differentials theory says t...
View Answer

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E

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C

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