Validation Studies Can Be Costly and Time Consuming

question 23

Multiple Choice

Validation studies can be costly and time consuming.An alternative approach is to

• A)hire a consulting firm to select applicants.
• B)rely on selection tools with established validity.
• C)conduct a job evaluation study.
• D)use the selection methods that other companies use.

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Definitions:

Marginal Decision Rule

A principle in economics used to determine the optimal level of an activity; actions should be taken up to the point where marginal benefits equal marginal costs.

Marginal Revenue

Increment in income from the sale of one more product or service unit.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, often indicating the degree of profitability.

Marginal Decision Rule

A principle stating that an action should be taken if and only if the marginal benefits exceed the marginal costs.