Question 1

Tournament theory is based on the proposition that

Accepted Answer

A)  It is absolute rather than relative performance that matters 
B)  There is a linear relationship between pay and organisational level 
C)  It is the spread between the top and next highest salary that matters 
D)  Internal labour markets with promotion from within is an alternative approach. 
A)  It is absolute rather than relative performance that matters 
B)  There is a linear relationship between pay and organisational level 
C)  It is the spread between the top and next highest salary that matters 
D)  Internal labour markets with promotion from within is an alternative approach. C

Question 2

Piece work will maximise incentives

Accepted Answer

A)  If it is based on groups rather than individuals 
B)  If it helps to attract and retain more productive individuals 
C)  Regardless of the characteristics of the firm 
D)  If shoddy work can be avoided. 
A)  If it is based on groups rather than individuals 
B)  If it helps to attract and retain more productive individuals 
C)  Regardless of the characteristics of the firm 
D)  If shoddy work can be avoided. B , D

Question 3

The optimal length of workweek occurs when

Accepted Answer

A)  The worker becomes too tired to work at maximum efficiency 
B)  The probability of accidents is minimised 
C)  The marginal utility of wage income equals the marginal disutility of work 
D)  There is uniformity of hours across industries. 
A)  The worker becomes too tired to work at maximum efficiency 
B)  The probability of accidents is minimised 
C)  The marginal utility of wage income equals the marginal disutility of work 
D)  There is uniformity of hours across industries. C

Question 4

Piece rates will be preferred to time rates provided

Accepted Answer

A)  It is easy to measure output 
B)  The risk of overpayment is limited 
C)  The supply of effort is elastic 
D)  All of these apply. 
A)  It is easy to measure output 
B)  The risk of overpayment is limited 
C)  The supply of effort is elastic 
D)  All of these apply.

Question 5

Labour managed firms

Accepted Answer

A)  Will attempt to maximise profits 
B)  Are Pareto optimal if perfect competition prevails 
C)  Avoid the problem of risk 
D)  Require free and costless entry of firms if perverse effects are to be avoided. 
A)  Will attempt to maximise profits 
B)  Are Pareto optimal if perfect competition prevails 
C)  Avoid the problem of risk 
D)  Require free and costless entry of firms if perverse effects are to be avoided.

Question 6

Profit sharing can

Accepted Answer

A)  Guarantee workers against income risk 
B)  Reduce the level of unemployment unless c is absent 
C)  Force up the wage level 
D)  Encourage all employees to increase effort regardless of the size of firm. 
A)  Guarantee workers against income risk 
B)  Reduce the level of unemployment unless c is absent 
C)  Force up the wage level 
D)  Encourage all employees to increase effort regardless of the size of firm.

Question 7

A principal-agent problem arises when

Accepted Answer

A)  It is not possible to monitor performance effectively 
B)  There is a lack of trust between the principal and the agent 
C)  There is a moral hazard problem 
D)  The agent possesses more information about the job than the principal. 
A)  It is not possible to monitor performance effectively 
B)  There is a lack of trust between the principal and the agent 
C)  There is a moral hazard problem 
D)  The agent possesses more information about the job than the principal.

Question 8

Workers in the private sector should not be paid more than those in the public sector because of productivity considerations

Accepted Answer

A)  Since it is difficult to measure performance in the public sector 
B)  Since otherwise it will be difficult to recruit in the public sector 
C)  Private sector workers have more capital to work with 
D)  It is necessary for there to be a 'going rate' of pay to avoid distortionary output losses. 
A)  Since it is difficult to measure performance in the public sector 
B)  Since otherwise it will be difficult to recruit in the public sector 
C)  Private sector workers have more capital to work with 
D)  It is necessary for there to be a 'going rate' of pay to avoid distortionary output losses.

Tournament theory is based on the proposition that

Piece work will maximise incentives

The optimal length of workweek occurs when

Piece rates will be preferred to time rates provided

Labour managed firms

Profit sharing can

A principal-agent problem arises when

Workers in the private sector should not be paid more than those in the public sector because of productivity considerations

Labour Force Participation

The Labour Supply Curve

Investment in Human Capital

The Demand for Labour; Changing Jobs: The Economics of Job Search

Extensions of Labour Demand: Mismatches in the Labour Market

Trade Unions

Bargaining and Conflict

The Structure of Labour Markets

Labour Market Policy

Filters

Exam 9: Wage Incentives

Tournament theory is based on the proposition that

Piece work will maximise incentives

The optimal length of workweek occurs when

Piece rates will be preferred to time rates provided

Labour managed firms

Profit sharing can

A principal-agent problem arises when

Workers in the private sector should not be paid more than those in the public sector because of productivity considerations

Labour Force Participation

The Labour Supply Curve

Investment in Human Capital

The Demand for Labour; Changing Jobs: The Economics of Job Search

Extensions of Labour Demand: Mismatches in the Labour Market

Trade Unions

Bargaining and Conflict

The Structure of Labour Markets

Labour Market Policy

Filters