Question 1

In an economy in which the skills, preferences, and motivations of workers vary widely, equality of wage rates would

Accepted Answer

A)  lead to shortages and surpluses of resources and the use of involuntary methods of achieving work participation. 
B)  result in a variety of product prices, but overall GDP would be unaffected. 
C)  be efficient if the wages were fixed at a high enough level. 
D)  reduce the productive incentives of high-skill workers, an effect that would be offset by the increased work effort of low-skill workers. 
A)  lead to shortages and surpluses of resources and the use of involuntary methods of achieving work participation. 
B)  result in a variety of product prices, but overall GDP would be unaffected. 
C)  be efficient if the wages were fixed at a high enough level. 
D)  reduce the productive incentives of high-skill workers, an effect that would be offset by the increased work effort of low-skill workers.

Question 2

An example of a non-pecuniary job characteristic is

Accepted Answer

A)  over-time pay. 
B)  salary. 
C)  an end-of-the-year bonus. 
D)  a comfortable work environment. 
A)  over-time pay. 
B)  salary. 
C)  an end-of-the-year bonus. 
D)  a comfortable work environment.

Question 3

Which of the following is true of America's millionaires?

Accepted Answer

A)  Most millionaires inherited at least half of their wealth. 
B)  Millionaires are far more likely than others to be self-employed entrepreneurs. 
C)  It is virtually impossible to achieve this status by saving and investing over a lengthy period of time. 
D)  Only about 20 percent of the millionaires in the United States have college degrees. 
A)  Most millionaires inherited at least half of their wealth. 
B)  Millionaires are far more likely than others to be self-employed entrepreneurs. 
C)  It is virtually impossible to achieve this status by saving and investing over a lengthy period of time. 
D)  Only about 20 percent of the millionaires in the United States have college degrees.

Question 4

When earnings differentials are adjusted for such factors as age, education, and marital status, the

Accepted Answer

A)  differential between the earnings of white males and those of minority males increases. 
B)  differential between the earnings of white males and those of minority males decreases. 
C)  corrected earnings of minority males are equal to those of similar white men. 
D)  corrected earnings of minority males are greater than those of similar white men. 
A)  differential between the earnings of white males and those of minority males increases. 
B)  differential between the earnings of white males and those of minority males decreases. 
C)  corrected earnings of minority males are equal to those of similar white men. 
D)  corrected earnings of minority males are greater than those of similar white men.

Question 5

Regulations that make it difficult to enter a particular job market are harmful because

Accepted Answer

A)  they reduce competition and prevent some voluntary exchanges from occurring. 
B)  they fail to stop business exploitation of workers and consumers. 
C)  they cause profits to become more unpredictable. 
D)  they reduce tax revenue collected. 
A)  they reduce competition and prevent some voluntary exchanges from occurring. 
B)  they fail to stop business exploitation of workers and consumers. 
C)  they cause profits to become more unpredictable. 
D)  they reduce tax revenue collected.

Question 6

Low-skill workers earn a lower wage than more experienced, higher skilled workers because the

Accepted Answer

A)  low-skill workers lack the intelligence necessary to do any other form of work. 
B)  low-skill workers were never given the opportunity to invest in human capital. 
C)  supply of low-skill workers is large relative to the demand for workers in this skill category. 
D)  low-skill workers are too lazy to search for other employment opportunities. 
A)  low-skill workers lack the intelligence necessary to do any other form of work. 
B)  low-skill workers were never given the opportunity to invest in human capital. 
C)  supply of low-skill workers is large relative to the demand for workers in this skill category. 
D)  low-skill workers are too lazy to search for other employment opportunities.

Question 7

The difference between the earnings of construction workers who work on bridges and skyscrapers and those who work on highways is most likely due to

Accepted Answer

A)  differences in education requirements. 
B)  differences in unionization rates. 
C)  a compensating differential. 
D)  apprenticeship requirements. 
A)  differences in education requirements. 
B)  differences in unionization rates. 
C)  a compensating differential. 
D)  apprenticeship requirements.

Question 8

Other things constant, which of the following job characteristics would be most likely to result in a higher pay rate for the job?

Accepted Answer

A)  The employer provides low cost child-care services on the premises. 
B)  The job is widely viewed as prestigious. 
C)  The job requires substantial amounts of stressful out-of-town travel. 
D)  The job involves working in pleasant surroundings. 
A)  The employer provides low cost child-care services on the premises. 
B)  The job is widely viewed as prestigious. 
C)  The job requires substantial amounts of stressful out-of-town travel. 
D)  The job involves working in pleasant surroundings.

Question 9

An individual who possesses a specialized skill that is difficult to execute will

Accepted Answer

A)  necessarily receive wages considerably higher than those who lack this skill. 
B)  receive a wage determined by the number of other persons possessing this skill. 
C)  receive a high wage only when this skill is in great demand relative to its supply. 
D)  receive a wage rate that is lower than similarly productive individuals who lack this skill. 
A)  necessarily receive wages considerably higher than those who lack this skill. 
B)  receive a wage determined by the number of other persons possessing this skill. 
C)  receive a high wage only when this skill is in great demand relative to its supply. 
D)  receive a wage rate that is lower than similarly productive individuals who lack this skill.

Question 10

Two workers are employed in the same job by the same firm; however, they are paid different wage rates. This could be explained by differences in

Accepted Answer

A)  the income effect 
B)  the price of the firm's output 
C)  their marginal products due to differences in ability 
D)  working conditions 
E)  risk 
A)  the income effect 
B)  the price of the firm's output 
C)  their marginal products due to differences in ability 
D)  working conditions 
E)  risk

Question 11

Wages in the United States are higher than wages in China primarily because

Accepted Answer

A)  worker productivity is higher in the United States. 
B)  in the United States, less capital is required per employee. 
C)  China has more natural resources that employees can work with. 
D)  the United States has more people and, therefore, a larger number of skilled workers. 
A)  worker productivity is higher in the United States. 
B)  in the United States, less capital is required per employee. 
C)  China has more natural resources that employees can work with. 
D)  the United States has more people and, therefore, a larger number of skilled workers.

Question 12

Which of the following is the primary source of cross-country differences in the real earnings of workers?

Accepted Answer

A)  Differences in natural resource endowments. 
B)  Differences in output per worker. 
C)  Differences in the average number of hours worked. 
D)  Differences in the share of workers that are members of a labor union. 
E)  Access to modern technology. 
A)  Differences in natural resource endowments. 
B)  Differences in output per worker. 
C)  Differences in the average number of hours worked. 
D)  Differences in the share of workers that are members of a labor union. 
E)  Access to modern technology.

Question 13

When an occupation is licensed,

Accepted Answer

A)  consumers can be assured that the quality of the product or service will be high. 
B)  the regulators issuing the licenses can be counted on to serve the interests of consumers. 
C)  the licensing will often be used to limit entry and the competitiveness of the market. 
D)  political factors will not influence the standards and procedures for receipt of a license. 
A)  consumers can be assured that the quality of the product or service will be high. 
B)  the regulators issuing the licenses can be counted on to serve the interests of consumers. 
C)  the licensing will often be used to limit entry and the competitiveness of the market. 
D)  political factors will not influence the standards and procedures for receipt of a license.

Question 14

Sally and Joe recently graduated from college, both majoring in history. Joe took a prestigious job as a legal clerk. Sally took a job as a specialist in fighting forest fires. Both received additional training before entering their jobs. Who will likely earn a higher salary and why?

Accepted Answer

We can identify two reasons that Sally w

Question 15

Which of the following is the clearest evidence of employment discrimination against minority employees?

Accepted Answer

A)  the average wage of minority workers is lower than the average wage of whites. 
B)  the average hours worked by minority employees exceeds the hours worked by whites. 
C)  the mean number of years of schooling of minority workers is lower than that of whites. 
D)  the average wages of minority employees are lower than the average wages of whites with similar productivity characteristics. 
A)  the average wage of minority workers is lower than the average wage of whites. 
B)  the average hours worked by minority employees exceeds the hours worked by whites. 
C)  the mean number of years of schooling of minority workers is lower than that of whites. 
D)  the average wages of minority employees are lower than the average wages of whites with similar productivity characteristics.

Question 16

Wages in the United States are higher than those in India primarily because

Accepted Answer

A)  the weather is better in the United States. 
B)  a larger proportion of the labor force is unionized in the United States. 
C)  less capital per employee is required in the United States. 
D)  the human and physical capital of American workers exceeds that of their Indian counterparts. 
A)  the weather is better in the United States. 
B)  a larger proportion of the labor force is unionized in the United States. 
C)  less capital per employee is required in the United States. 
D)  the human and physical capital of American workers exceeds that of their Indian counterparts.

Question 17

Economic theory suggests that the standard of living of American workers would rise if

Accepted Answer

A)  the minimum wage were doubled. 
B)  automation were outlawed. 
C)  workers were forced to retire earlier. 
D)  technological improvements increased output per worker-hour. 
A)  the minimum wage were doubled. 
B)  automation were outlawed. 
C)  workers were forced to retire earlier. 
D)  technological improvements increased output per worker-hour.

Question 18

Compensation where the top performer receives much higher rewards than other competitors, even if the others perform at only slightly lower levels, is called

Accepted Answer

A)  a compensating differential. 
B)  round-robin pay. 
C)  tournament pay. 
D)  base pay. 
A)  a compensating differential. 
B)  round-robin pay. 
C)  tournament pay. 
D)  base pay.

Question 19

If all persons had identical preferences and productivity factors (ability, skill level, education, experience, etc.), the highest paying jobs would be the most

Accepted Answer

A)  prestigious. 
B)  convenient. 
C)  undesirable. 
D)  easily learned. 
A)  prestigious. 
B)  convenient. 
C)  undesirable. 
D)  easily learned.

Question 20

The linkage between high productivity and high earnings is vitally important because

Accepted Answer

A)  it provides individuals with a strong incentive to develop skills and engage in activities that others value highly. 
B)  high productivity (a large output per hour worked) is the key to high living standards. 
C)  it brings the self-interest of individuals into harmony with economic progress. 
D)  all of the above are true. 
A)  it provides individuals with a strong incentive to develop skills and engage in activities that others value highly. 
B)  high productivity (a large output per hour worked) is the key to high living standards. 
C)  it brings the self-interest of individuals into harmony with economic progress. 
D)  all of the above are true.

In an economy in which the skills, preferences, and motivations of workers vary widely, equality of wage rates would

An example of a non-pecuniary job characteristic is

Which of the following is true of America's millionaires?

When earnings differentials are adjusted for such factors as age, education, and marital status, the

Regulations that make it difficult to enter a particular job market are harmful because

Low-skill workers earn a lower wage than more experienced, higher skilled workers because the

The difference between the earnings of construction workers who work on bridges and skyscrapers and those who work on highways is most likely due to

Other things constant, which of the following job characteristics would be most likely to result in a higher pay rate for the job?

An individual who possesses a specialized skill that is difficult to execute will

Two workers are employed in the same job by the same firm; however, they are paid different wage rates. This could be explained by differences in

Wages in the United States are higher than wages in China primarily because

Which of the following is the primary source of cross-country differences in the real earnings of workers?

When an occupation is licensed,

Sally and Joe recently graduated from college, both majoring in history. Joe took a prestigious job as a legal clerk. Sally took a job as a specialist in fighting forest fires. Both received additional training before entering their jobs. Who will likely earn a higher salary and why?

Which of the following is the clearest evidence of employment discrimination against minority employees?

Wages in the United States are higher than those in India primarily because

Economic theory suggests that the standard of living of American workers would rise if

Compensation where the top performer receives much higher rewards than other competitors, even if the others perform at only slightly lower levels, is called

If all persons had identical preferences and productivity factors (ability, skill level, education, experience, etc.), the highest paying jobs would be the most

The linkage between high productivity and high earnings is vitally important because

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Gaining From International Trade

Filters

Exam 13: Earnings, Productivity, and the Job Market

In an economy in which the skills, preferences, and motivations of workers vary widely, equality of wage rates would

An example of a non-pecuniary job characteristic is

Which of the following is true of America's millionaires?

When earnings differentials are adjusted for such factors as age, education, and marital status, the

Regulations that make it difficult to enter a particular job market are harmful because

Low-skill workers earn a lower wage than more experienced, higher skilled workers because the

The difference between the earnings of construction workers who work on bridges and skyscrapers and those who work on highways is most likely due to

Other things constant, which of the following job characteristics would be most likely to result in a higher pay rate for the job?

An individual who possesses a specialized skill that is difficult to execute will

Two workers are employed in the same job by the same firm; however, they are paid different wage rates. This could be explained by differences in

Wages in the United States are higher than wages in China primarily because

Which of the following is the primary source of cross-country differences in the real earnings of workers?

When an occupation is licensed,

Sally and Joe recently graduated from college, both majoring in history. Joe took a prestigious job as a legal clerk. Sally took a job as a specialist in fighting forest fires. Both received additional training before entering their jobs. Who will likely earn a higher salary and why?

Which of the following is the clearest evidence of employment discrimination against minority employees?

Wages in the United States are higher than those in India primarily because

Economic theory suggests that the standard of living of American workers would rise if

Compensation where the top performer receives much higher rewards than other competitors, even if the others perform at only slightly lower levels, is called

If all persons had identical preferences and productivity factors (ability, skill level, education, experience, etc.), the highest paying jobs would be the most

The linkage between high productivity and high earnings is vitally important because

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Gaining From International Trade

Filters