Full Test Bank Defining Competitiveness Ch.7 - Compensation 12e Complete Test Bank by Jerry Newman. DOCX document preview.
Chapter 07
Defining Competitiveness
Multiple Choice Questions
1. | Which of the following statements is true of pay level?
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2. | _____ refers to the average of the array of rates inside an organization.
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3. | Pay level decisions have a significant impact on expenses. Other things being equal, the higher the pay level, the higher the:
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4. | Which of the following is NOT a reason a company might pay base wages above market?
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5. | Which of the following is an example of a quoted-price market?
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6. | Which of the following is an example of a bourse market?
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7. | _____ is an example of a bourse.
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8. | Which of the following is an example of the demand side of labor?
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9. | The market pay rate is the:
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10. | _____ is the additional output associated with the employment of one additional person, with other production factors held constant.
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11. | 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?
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12. | 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:
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13. | 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.
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14. | The assumption of the upward sloping supply curve that offers of higher pay will increase supply will most likely NOT hold when _____.
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15. | 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?
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16. | 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?
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17. | A study of graduating college students found they sought jobs with all of the following pay characteristics EXCEPT _____.
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18. | The _____ theory is the most influential in explaining pay-level differences.
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19. | _____ puts a lid on the maximum pay level an employer can set.
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20. | Wages tend to be the lowest in which of the following industries?
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21. | Which of the following is NOT true of the relationship between employer size and its ability to pay?
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22. | Evidence shows that in manufacturing, _____ is positively correlated with hourly wage level.
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23. | All of the following are important factors in defining a market for compensation purposes EXCEPT:
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24. | In which of the following conditions would product market competitors' data be given more weight than data from labor market competitors?
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25. | The pay policy that is most closely associated with the decreased ability to attract employees is a(n) _____ policy.
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26. | The pay-level policy that is most likely to reduce pay dissatisfaction is a(n) _____.
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27. | The most common pay policy is a(n) _____.
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28. | All of the following are advantages of a lead pay-level policy EXCEPT _____.
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29. | Among pay-mix alternatives, the percentage of base pay is highest in _____.
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30. | The pay-mix policy alternative in which the percentage of benefits is likely to be the highest is known as _____.
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True / False Questions
31. | In determining the compensation strategy, a major strategic decision is whether to mirror what competitors are paying. |
32. | Both pay level and pay mix decisions focus on two objectives: (1) control costs and increase revenues and (2) attract and retain employees. |
33. | A manager of a company could be a factor affecting the company's external competitiveness. |
34. | Stores that label each item's price or ads that list a job opening's starting wage are examples of bourses. |
35. | Graduating students usually find themselves in a quoted-labor market. |
36. | In a labor market, the demand side focuses on the actions of the employers. |
37. | In a labor market, the market rate is where the lines for labor demand and labor supply cross. |
38. | According to efficiency-wage theory, paying higher wages than competitors can lower labor costs due to more efficient workers. |
39. | An employer offering lower base pay with high bonuses is a likely signal that it is seeking risk-taking employees. |
40. | The most influential theory explaining pay-level differences is marginal revenue productivity. |
41. | Human capital theory assumes that people are paid at the value of their marginal product. |
42. | The product market sets the floor on the minimum wage required to attract sufficient numbers of employees. |
43. | Employers tend to overestimate the importance of pay to employees and underestimate the role of relationships with the supervisor. |
44. | Employers in highly competitive markets are more able to raise prices without loss of revenues. |
45. | Segmenting sources of labor is a means of reducing labor costs. |
46. | Wages in labor-intensive industries are generally higher than in technology-intensive industries. |
47. | Talented individuals have a higher marginal value in larger organizations. |
48. | The three factors usually used to determine the relevant labor markets are the occupation, geography, and competitors. |
49. | 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. |
50. | Research shows that a lead pay strategy reduces turnover. |
Short Answer Questions
51. | Explain external competitiveness.
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52. | What are the factors that influence decisions on pay level and pay mix?
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53. | What are the basic assumptions of labor market theories?
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54. | What is the significance of marginal revenue?
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55. | According to efficiency-wage theory, how do increased wages increase efficiency and lower labor costs?
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