Question 1

Diminishing marginal productivity is associated with which of the following?&#10;A) manual review of labour&#10;B) labour expenditure&#10;C) marginal product of labour&#10;D) cost of labour&#10;E) marginal revenue of labour

Accepted Answer

Diminishing marginal productivity refers to the decrease in the marginal product of each additional unit of input (usually labor) as more and more units are added. It is directly related to the marginal product of labor, therefore choice C is the correct answer. Choices A, B, D, and E are not directly related to diminishing marginal productivity.

Question 2

Which of the following decreases as the number of new hires is increased?&#10;A) marginal review of labour&#10;B) marginal product of labour&#10;C) future price&#10;D) marginal cost of labour&#10;E) net profit margin

Accepted Answer

As more workers are hired, the marginal product of labor typically decreases due to the law of diminishing returns, where each additional worker contributes less to output than the previous one.

Question 3

Research has shown that pay level is most important to people who are:&#10;A) risk averse&#10;B) individualistic&#10;C) confident&#10;D) entering the workforce&#10;E) materialistic

Accepted Answer

Research has shown that people who are more materialistic place a higher value on pay level.

Question 4

Evidence suggests that organizations pay higher wages when making greater use of which of the following?&#10;A) job rotation&#10;B) research and development&#10;C) relying on individuals instead of teams&#10;D) hiring lower skilled workers&#10;E) personality testing

Accepted Answer

Job rotation, which involves moving employees around to different job roles within an organization, can increase their skill sets and provide a broader perspective on the company as a whole. This results in a more flexible workforce and increased productivity, which can lead to higher wages being paid to retain these valuable employees.

Question 5

Organizations that pay less than market leaders do so because they are &#34;market driven.&#34;

Accepted Answer

Organizations may pay less than market leaders for a variety of reasons, such as budget constraints, differing compensation strategies, or a focus on non-monetary benefits, rather than being solely "market driven."

Question 6

The nature of labour demand suggests that employers cannot change any factor of production in the short-term.

Accepted Answer

In the short-term, employers are constrained by fixed factors of production such as machinery and the size of their workforce, which limit their ability to adjust to changes in labour demand. It takes time for employers to acquire new capital or adjust the scale of their operations, making it difficult to quickly respond to fluctuating labour demand.

Question 7

The supply of labour is not affected by the degree of risk involved.

Accepted Answer

The degree of risk involved in a job can affect the supply of labour. If a job is perceived to be very risky or dangerous, less people may want to work in that job and the supply of labour for that job may be lower. Similarly, if a job is perceived to be safe and low risk, more people may be willing to work in that job and the supply of labour for that job may be higher.

Question 8

An externally competitive should help contain labour costs.

Accepted Answer

An externally competitive environment forces firms to keep their labour costs low in order to remain competitive with other firms.

Question 9

What is the difference between the marginal product of labour and the marginal revenue of labour?

Accepted Answer

The answer of What is the difference between the marginal...

Question 10

What are the basic assumptions of economic theories of labour markets?

Accepted Answer

The answer of What are the basic assumptions of economic...

Question 11

What are the main consequences of an externally competitive pay policy?

Accepted Answer

The answer of What are the main consequences of an...

Deck 7: Defining External Competitiveness