Question 1

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?
A)The labor costs for Company A will increase, but it will be unable to hire additional workers.
B)Company A will hire the needed workers at a higher wage rate.
C)Competitors of Company A will lose employees to Company
D)Company A will hire higher quality workers.

Accepted Answer

A

Question 2

A study of graduating college students found they sought jobs with all of the following pay characteristics EXCEPT _____.
A)individual-based pay
B)variable pay
C)flexible benefits
D)job-based pay

Accepted Answer

B

Question 3

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:
A)markets are competitive.
B)pay rates reflect all costs of employment.
C)employers seek to maximize profits.
D)workers are homogeneous and interchangeable.

Accepted Answer

The statement "employers seek to maximize profits" reflects the first labor market theory assumption that employers act rationally and in their own self-interest. The other options, although potentially relevant to labor market theory, do not directly apply to this specific assumption.

Question 4

_____ puts a lid on the maximum pay level an employer can set.
A)Government legislation
B)The product market
C)The labor market
D)Labor market competition

Accepted Answer

The product market puts a lid on the maximum pay level an employer can set because it determines the maximum price that can be charged for goods or services, which in turn limits how much can be spent on wages.

Question 5

Which of the following is NOT a reason a company might pay base wages above market?
A)To increase employee productivity
B)To increase turnover rates
C)To increase wage satisfaction
D)To attract more job applicants

Accepted Answer

Companies generally pay base wages above market to attract more job applicants, increase wage satisfaction, and ultimately increase employee productivity. However, paying above market rates does not typically increase turnover rates.

Question 6

Which of the following statements is true of pay level?
A)Pay level is the same across all organizations for the same job.
B)The higher the pay level relative to what competitors pay, the lower the relative costs to provide similar products or services.
C)Pay level is directly proportional to labor costs.
D)Pay level is independent of the number of employees in an organization.

Accepted Answer

Pay level is directly proportional to labor costs because higher pay levels typically result in higher labor costs for an organization.

Question 7

The market pay rate is the:
A)minimum wage rate set by the Department of Labor.
B)pay rate at which applicants will deny a job offer.
C)difference between use value and surplus value.
D)point at which supply and demand lines cross.

Accepted Answer

The market pay rate is determined by the point at which the supply and demand lines intersect. This is where the market is in equilibrium and the price (in this case, the pay rate) is set. The other options do not accurately describe what the market pay rate is.

Question 8

_____ is an example of a bourse.
A)The stated starting wage of a job in an ad
B)The total compensation for a top athlete
C)The price of a product on Amazon
D)The price of a box of cereal at a grocery store

Accepted Answer

A bourse refers to a stock exchange or a marketplace where securities or commodities are traded. The total compensation for a top athlete is an example of a traded commodity on a bourse, such as the player transfer market in professional sports. The other options do not involve trading securities or commodities on a marketplace.

Question 9

_____ refers to the average of the array of rates inside an organization.
A)Revenue margin
B)Remuneration
C)Compensation
D)Pay level

Accepted Answer

Pay level refers to the average of the array of rates inside an organization. Revenue margin refers to the amount by which revenue from sales exceeds costs. Remuneration and compensation both refer to payment or reward for work done, but do not necessarily relate specifically to the average of rates within an organization.

Question 10

The assumption of the upward sloping supply curve that offers of higher pay will increase supply will most likely NOT hold when _____.
A)absenteeism is high
B)turnover is low
C)unemployment is low
D)unemployment is high

Accepted Answer

When unemployment is already low, it suggests that the labor market is tight and there is little excess supply of labor. Thus, offering higher pay may not necessarily result in an increase in the supply of labor, as there may not be enough available workers to meet the demand.

Question 11

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?
A)Druk will break even if it hires a twelfth employee for a wage of $50,000.
B)Druk needs to pay $10,000 as wage to the eleventh employee to break even.
C)Druk will break even if it hires a thirteenth employee for a wage of $10,000.
D)Druk needs to pay $50,000 as wage to the eleventh employee to break even.

Accepted Answer

The eleventh employee brings in five new clients, generating $50,000 in revenue. To break even, the wage of the eleventh employee should be $50,000.

Question 12

The _____ theory is the most influential in explaining pay-level differences.
A)human capital
B)marginal productivity
C)efficiency-wage
D)signaling

Accepted Answer

The human capital theory is the most influential in explaining pay-level differences as it suggests that individuals' skills, education, and experience determine their productivity and, consequently, their pay level.

Question 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.
A)demand factor; supply factor
B)marginal output; market price
C)incremental output; marginal output
D)marginal revenue; wage rate

Accepted Answer

The question is asking about maximizing profits, which means that we should consider the marginal revenue and the cost of hiring (the wage rate). The level of demand that maximizes profits is the level at which the marginal revenue (the revenue generated from the last hire) is equal to the wage rate for that hire. Therefore, the correct answer is D, marginal revenue and wage rate.

Question 14

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?
A)The productivity will reduce.
B)The productivity will increase.
C)The productivity will remain the same.
D)There is not enough information to determine productivity.

Accepted Answer

Since the factors of production remain the same but there is an additional employee, the same amount of work will need to be divided among five employees instead of four. This will lead to a decrease in productivity for each employee as they will have less work to do individually.

Question 15

Which of the following is an example of a quoted-price market?
A)Streetcash, a website that allows buyers to negotiate product prices with the sellers
B)Vidwom, a website that allows buyers to bid for items sold by other users
C)Gramspot, a website where cars are auctioned by sellers for charity
D)Nile, a website that allows sellers to sell their products for a fixed price

Accepted Answer

Nile is an example of a quoted-price market, where sellers set a fixed price for their products. Streetcash and Vidwom are examples of auction markets, where buyers negotiate or bid for prices, respectively. Gramspot is an example of a hybrid market, where sellers auction off their products for charity.

Question 16

_____ is the additional output associated with the employment of one additional person, with other production factors held constant.
A)Productivity
B)The marginal product of labor
C)Incremental productivity
D)The marginal revenue of labor

Accepted Answer

The definition given in the question is that of marginal product of labor, which is the change in output resulting from the employment of one more unit of labor, holding all other factors of production constant. It is the additional output that a firm can expect by increasing its labor inputs by one unit, while keeping all other inputs constant. Therefore, the correct answer is B - the marginal product of labor.

Question 17

Which of the following is an example of the demand side of labor?
A)Level of pay applicants will accept
B)Qualifications of applicants
C)Pay level offered by an employer
D)Locations of potential employees

Accepted Answer

The demand side of labor refers to the employer's perspective, which includes the pay level offered by an employer to attract workers.

Question 18

Pay level decisions have a significant impact on expenses.Other things being equal, the higher the pay level, the higher the:
A)profit margins.
B)labor costs.
C)return on investments.
D)revenues.

Accepted Answer

Pay level decisions determine the wages and benefits paid to employees, directly impacting labor costs. The higher the pay level, the higher the labor costs, which can reduce profit margins unless it is offset by increased revenues or productivity. Return on investments and revenues are not necessarily tied to pay levels.

Question 19

Which of the following is an example of a bourse market?
A)Neurofort, a website that sells surgical equipment in bulk at fixed prices
B)Hardknox, a hardware store that sells all its products at 10 percent above the maximum retail price
C)Needlefarm, a store that sells premium furniture at discounted rates
D)Flatcake, a website that allows buyers to negotiate the prices with the sellers of handmade goods

Accepted Answer

Flatcake is an example of a bourse market because it allows buyers to negotiate prices directly with the sellers, similar to how stocks are traded on a stock exchange. The other options do not involve this kind of direct negotiation or trading.

Question 20

Wages tend to be the lowest in which of the following industries?
A)Education and health care
B)Technology-intensive industries
C)Professional services
D)Pharmaceuticals

Accepted Answer

Education and health care industries tend to have lower wages as compared to other industries due to factors such as government funding, non-profit organizations, and low-profit margins. Technology-intensive industries, professional services, and pharmaceuticals are generally known to offer higher salaries.

Quiz 7: Defining Competitiveness

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?

A study of graduating college students found they sought jobs with all of the following pay characteristics EXCEPT _____.

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:

_____ puts a lid on the maximum pay level an employer can set.

Which of the following is NOT a reason a company might pay base wages above market?

Which of the following statements is true of pay level?

The market pay rate is the:

_____ is an example of a bourse.

_____ refers to the average of the array of rates inside an organization.

The assumption of the upward sloping supply curve that offers of higher pay will increase supply will most likely NOT hold when _____.

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?

The _____ theory is the most influential in explaining pay-level differences.

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.

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?

Which of the following is an example of a quoted-price market?

_____ is the additional output associated with the employment of one additional person, with other production factors held constant.

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

Pay level decisions have a significant impact on expenses.Other things being equal, the higher the pay level, the higher the:

Which of the following is an example of a bourse market?

Wages tend to be the lowest in which of the following industries?