Exam 11: Pay and Productivity: Wage Determination within the Firm

Students in a 100 person class agree beforehand to answer all 20 multiple choice questions with B.Under which of these grading methods is this likely to prove an effective agreement that does not produce cheating on the agreement (for example,by a few students answering the questions correctly)?

A radically more progressive tax system (which taxes workers earning more at a much higher tax rate)will likely have which of these effects?

Assume the following is true: in the past,many firms promised their workers a certain type of pension plan in exchange for lower wages.Recently,these firms reneged on their promise by changing to another pension plan that was significantly less valuable to older workers (but was more valuable to younger workers).Assuming the original promised plan was expected to be profitable,why would firms change their plans?

The manager of Mel's Diner feels that most of his waiters are rude to customers and don't hustle enough.He proposes that all tips should be placed in one pot and divided on the basis of the number of customers served.This plan is likely to ________ hustle and ________ rudeness.

Suppose that monopsony behavior results from the increased monitoring costs at large firms.A higher minimum wage would ________ the marginal expense of hiring labor but only if the workers are ________ afraid of losing their jobs and thus need less supervision.

Workers who are paid on a piece-rate basis tend to

An employment contract is most likely to be successful when it

A company has a merit pay plan based on the relative performance of workers teams.Each worker in a team gets the same wage as other team members,but those in more productive teams get higher wages.Which of the following would NOT explain why this incentive might be better than other methods for motivating workers to work harder?

In the rat race model,workers competing for a promotion work more hours to signal that they are willing to work long hours.What is unusual is that even those who like to work long hours end up working even longer hours.Why is this?

Merit-pay plans which rate workers relative to their peers

Most employment contracts are

Fairness in regards to a worker's reference group is important in the labor market because

Firm X arranges its pay such that workers are underpaid early in their career but are overpaid later in their career such that workers are,if they stay with the firm,on net better off.A necessary condition for this method of underpayments followed by overpayments to work is that

Joe is paid a wage of $12 per hour.What are the advantages and disadvantages to the employer of paying Joe on the basis of time worked?

If the firm pays the following wages,the marginal revenue product (MRP)of workers goes up as shown.What is the optimal efficient wage for the firm (assuming it can only pay discrete dollar amounts)?