Setting Greater Pay Differentials at the Top of the Pay

question 47

Multiple Choice

Setting greater pay differentials at the top of the pay structure is based on:

• A)marginal productivity theory
• B)institutional theory
• C)equity theory
• D)tournament theory
• E)marginal utility theory

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Definitions:

Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenue.

Sales Units

The number of individual items or units a business sells within a specific period.

Variable Expenses

Expenses that change in proportion to the activity of a business such as production volume or sales.

Fixed Expenses

Costs that do not change in total despite fluctuations in the volume of goods or services produced or sold.