Question : 11) Which of the following economists best known for exploring : 1387999

11) Which of the following economists is best known for exploring the application of economic analysis to human resources issues?

A) Edward Lazear

B) Claudia Goldin

C) David Hammermesh

D) Alan Krueger

12) The parent company of Safelite AutoGlass, the nation’s largest installer of auto glass, changed the system it used to pay its glass installers in the mid-1990s. How did Safelite change its compensation system and what was the result?

A) Safelite ended its system of paying workers on the basis of how many windows they repaired and replaced it with a system that paid workers hourly wages. As a result, productivity and worker morale improved.

B) Safelite ended its system of paying workers hourly wages and replaced it with a system that determined wages on the basis of how many windows were repaired. As a result, productivity and worker morale suffered. Eventually, Safelite returned to its previous compensation system.

C) The new system has not been in place long enough to determine whether it is an improvement over the previous compensation system.

D) Safelite ended its system of paying workers hourly wages and replaced it with a system that determined wages on the basis of how many windows were repaired. As a result, productivity and worker morale improved.

13) Edward Lazear analyzed data provided by the Safelite Group, the nation’s largest installer of auto glass, after the company changed the way it paid its glass installers beginning in the mid-1990s. Instead of paying workers hourly wages, Safelite began to pay workers on the basis of how many windows they installed. Which of the following describes what Lazear concluded from his analysis of Safelite’s data?

A) Although workers installed more windows under the new system, Lazear found that there was also an increase in the number of workmanship-related defects. Lazear attributed this to workers taking short-cuts in order to earn higher wages. As a result, productivity did not improve and Safelite went back to paying hourly wages.

B) Lazear found that worker productivity increased with the new system; about half of the increase in productivity was due to workers who continued with the company and half was due to new workers being more productive than those who left the company.

C) Although worker productivity improved, the increase in hourly wages resulted in a significant decline in Safelite’s profits.

D) Because of a principal-agent problem, worker productivity was not affected by the new compensation system. However, Lazear attributed this to management problems that had nothing to do with Safelite’s compensation system.

14) Which of the following is not a reason for firms to choose a salary system rather than a commission system to compensate their employees?

A) Research has shown that most companies will find that a salary system will be more profitable than a commission system.

B) It is often difficult to attribute output to particular workers.

C) If workers are paid on the basis of the number of units of output they produce, they may become less concerned about quality.

D) Commission compensation systems are riskier for employees than a salary system, and many workers dislike risk.

15) If it is difficult for a firm to attribute the output it produces to a particular worker, then

A) its employees are likely to form a union.

B) a commission system of compensation will be preferable to a salary system.

C) a salary compensation system will be preferable to a commission system.

D) a piece-rate system of compensation will be preferable to a salary system.

16) Workers who dislike risk

A) prefer to be paid monthly rather than weekly or daily.

B) prefer a piece-rate compensation system to a salary system.

C) prefer a salary system to a commission compensation system.

D) prefer to be paid a salary rather than a wage.

17) A commission system of compensation reduces the risk to workers during seasonal periods when business is sluggish.

18) When workers are paid on a piece-rate basis, an employer must be able to easily measure each worker’s output.

19) A firm might prefer a commission system of compensation when the nature of the work is repetitive and monotonous and can be performed by an individual.

20) The application of economic analysis to human resources issues is called personnel economics.