Because Workers in Internal Labor Markets Are Promoted on the Basis

question 12

Multiple Choice

Because workers in internal labor markets are promoted on the basis of seniority:

• A)such markets are allocatively inefficient because seniority takes precedence over ability
• B)dynamic efficiency is enhanced by removing a disincentive for older workers to pass along skills to younger workers
• C)static efficiency is enhanced by allocating the most able workers to each job
• D)some other scheme must be introduced,such as tournament pay,to improve efficiency in such markets

Recognize how changes in resource prices influence firms' production techniques and costs.

Grasp the relationship between firms' payment for resources and their overall costs and revenues.

Understand the impact of consumer incomes on market demand and the distribution of goods.

Acknowledge how market forces of supply and demand guide resource allocation and industry size.

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Definitions:

Segmented Income Statement

An income statement broken down into segments such as product lines, geographical locations, or departments, to analyze performance.

Net Operating Income

Earnings from a company's core business operations, excluding deductions of interest and taxes.

Variable Expenses

Costs that vary in direct proportion to changes in an activity level or volume of production.

Fixed Expenses

Costs that do not fluctuate with the level of production or sales within a certain range, such as rent or salaries.