CHAPTER 3
1. For most companies, human resource (labor) costs consume approximately _____ percent of total
revenue.
(a) 10
(b) 20
(c) 40
(d) 60
2. Which one of the following is not considered as part of a compensation program?
(a) Benefits and services
(b) Short- and long-term incentives
(c) Job-related training
(d) Wage and salary add-ons
3. The average cost of benefits as a percentage of wages and salaries ranges between
(a) 20-25%
(b) 25-30%
(c) 30-35%
(d) 35-40%
4. Over the past five years, employers have seen compensation costs increase most rapidly with
(a) health care and pension payments
(b) base wage and salaries
(c) time off with pay
(d) life insurance
5. Payments provided for overtime work, working on weekends and holidays, and working second
and third shifts are included with
(a) base wage and salaries
(b) wage and salary add-ons
(c) incentive payments
(d) benefits and services
6. The single factor that most influences the rate of pay received by an employee is
(a) job occupied
(b) education obtained
(c) ability of employee
(d) skills possessed
7. Approximately what percentage of workers are unionized?
(a) 8
(b) 10
(c) 12
(d) 14
8.
An employer with which one of the following characteristics would most likely pay an employee
an above-average rate of pay?
(a) small in size
(b) unionized
(c) labor intensive
(d) rural location in southern USA
9. Which one of the following characteristics is least likely to describe a capital-intensive business?
(a) low-skilled work force
(b) uses sophisticated technology
(c) requires fewer employees than firm generating comparable dollar revenues
(d) loose control of labor costs
10. A “no more than necessary” pay philosophy is most likely found among executives of
(a) unionized businesses
(b) capital intensive firms
(c) public-sector organizations
(d) small businesses
11. Which one of the following states has the highest level of personal income?
(a) Tennessee
(b) Montana
(c) Connecticut
(d) New York
12. A benefit normally gained by high-paying firms is
(a) higher margin of profit
(b) lower rate of turnover
(c) greater pay satisfaction among all employees
(d) less likely to be unionized
13. Historically, women workers have earned approximately ________ percent of what men workers
earned. By 2003, female workers were earning _______ percent of what male workers earned.
(a) 50,70
(b) 60,80
(c) 50,80
(d) 60,85
14. Over the past decade, which factor has had the least influence on rates of pay provided to USA
workers?
(a) minimum wage
(b) foreign competition
(c) deregulation
(d) leveraged buyouts and takeovers
15.
In 2002, production workers in manufacturing in which one of the following countries earned less
than their counterparts in the USA?
(a) Norway
(b) Japan
(c) Switzerland
(d) Germany
16. All but which one of the following conditions will influence jobs and job-related opportunities in
the future?
(a) rapid economic growth
(b) vigorous competition
(c) fewer advancement opportunities
(d) restricted wage and salary increases
17. All but which one of the following assumptions are included within the model of perfect
competition?
(a) employers seek to maximize profits
(b) workers have perfect information about wages and job opportunities
(c) available workers differ with respect to both skill and performance
(d) all jobs in the labor market are open to competition
18. In the supply-demand model, which one of the following statements is false?
(a) supply increases as wages rise
(b) the key wage prediction is where the supply and demand curve intersect
(c) the demand curve slopes upward
(d) at the upper wage rate (Wu) there is an excess supply of labor
19. Possibly the most important point presented by the supply-demand model is that
(a) labor markets can be ignored
(b) there is a range of wages within which a firm has discretion
(c) areas of indeterminacy are of minimal importance
(d) factors other than supply and demand can be ignored
20. In a famous study analyzing the wage rates of truck drivers in Boston in 1953, John Dunlop noted
that the wages were arranged
(a) in wage grades
(b) in a wage classification
(c) on a wage scale
(d) on wage contours
21. From the perspective of labor economics, a wage rate is a measure of
(a) total cost of labor per hour
(b) cost of base wage per hour
(c) cost of base wage and incentives per hour
(d) total cost of base wage and government required benefits
Match the description of a correlate that influences organization-provided rates of pay listed in the right-
hand column with the most appropriate correlate listed in the left-hand column:
Correlate Description of Correlate
22. Kind of business (a) has less than $25 million in annual sales
23. Total compensation package (b) refines crude oil into various chemicals
24. Capital- versus labor-intensive (c) employs researchers in high demand
25. Kind and level of required skills (d) provides food and lodging services
26. Size of business (e) all employees received an annual bonus
averaging $20,000
Chapter 3