Question 1

The profit motive counteracts

Accepted Answer

A) consumer discrimination. 
B) discrimination in sports. 
C) the beauty premium. 
D) None of the above is correct. 
A) consumer discrimination. 
B) discrimination in sports. 
C) the beauty premium. 
D) None of the above is correct.

Question 2

When comparing average wages for male and female workers in the United States, wages paid to females have been about 40 percent less than those paid to male workers.

Accepted Answer

A) True 
 B)False

Question 3

George and Brad are waiters at a local restaurant. The female customers prefer to be seated at the tables that George waits on because they think George is better looking than Brad. If George earns more than Brad because of his better looks, this is an example of

Accepted Answer

A) effort playing a key role in wage differences. 
B) differences in human capital. 
C) a beauty premium. 
D) a compensating differential. 
A) effort playing a key role in wage differences. 
B) differences in human capital. 
C) a beauty premium. 
D) a compensating differential.

Question 4

Discrimination by a manager in the hiring process

Accepted Answer

A) decreases the firm's costs. 
B) increases the firm's costs. 
C) is evident if a white manager refuses to hire a certain black applicant. 
D) is evident if a male manager fails to hire a certain female applicant. 
A) decreases the firm's costs. 
B) increases the firm's costs. 
C) is evident if a white manager refuses to hire a certain black applicant. 
D) is evident if a male manager fails to hire a certain female applicant.

Question 5

Which of the following might explain the beauty premium found by labor economists Hamermesh and Biddle?

Accepted Answer

A) Good looks are an innate ability for some jobs, which results in higher productivity and higher wages. 
B) Good looks may be an indirect measure of other types of ability such as attention to detail. 
C) If better-looking people earn more than average-looking people, employers may be discriminating based on personal appearance. 
D) All of the above could explain the beauty premium. 
A) Good looks are an innate ability for some jobs, which results in higher productivity and higher wages. 
B) Good looks may be an indirect measure of other types of ability such as attention to detail. 
C) If better-looking people earn more than average-looking people, employers may be discriminating based on personal appearance. 
D) All of the above could explain the beauty premium.

Question 6

Firms that operate in competitive product markets and choose to practice discrimination in hiring workers

Accepted Answer

A) will survive if they increase production and garner a larger market share. 
B) will eventually earn zero economic profits. 
C) will survive as long as they are willing to have a smaller market share. 
D) are likely to eventually go out of business. 
A) will survive if they increase production and garner a larger market share. 
B) will eventually earn zero economic profits. 
C) will survive as long as they are willing to have a smaller market share. 
D) are likely to eventually go out of business.

Question 7

Which of the following statements is correct?

Accepted Answer

A) Differences in human capital may explain differences in wages between blacks and whites. 
B) Racial discrimination is the strongest explanation for differences in wages between blacks and whites. 
C) Gender discrimination is the strongest explanation for differences in wages between blacks and whites. 
D) None of the above statements is correct. 
A) Differences in human capital may explain differences in wages between blacks and whites. 
B) Racial discrimination is the strongest explanation for differences in wages between blacks and whites. 
C) Gender discrimination is the strongest explanation for differences in wages between blacks and whites. 
D) None of the above statements is correct.

Question 8

Major league baseball players get paid more than minor league baseball players because of

Accepted Answer

A) compensating differentials. 
B) higher levels of educational attainment. 
C) greater abilities. 
D) All of the above are correct. 
A) compensating differentials. 
B) higher levels of educational attainment. 
C) greater abilities. 
D) All of the above are correct.

Question 9

Empirical evidence suggests that ability, effort, and chance are not likely to be significant contributors to wage differences.

Accepted Answer

A) True 
 B)False

Question 10

Gerald earns a higher salary than his brother Peter because Gerald went to law school and is a lawyer, whereas Peter dropped out of college to work as a mechanic. The difference in salary illustrates a compensating differential.

Accepted Answer

A) True 
 B)False

Question 11

Coal mining is a dangerous and dirty job. Suppose someone developed new machinery that made coal mining safer and cleaner; at the same time, suppose it made coal miners more productive. We would expect that the wages of coal miners would

Accepted Answer

A) rise. 
B) fall. 
C) stay exactly the same. 
D) rise, fall, or stay the same. 
A) rise. 
B) fall. 
C) stay exactly the same. 
D) rise, fall, or stay the same.

Question 12

Politicians often point to wage differentials as evidence of labor-market discrimination against ethnic minorities and women; however, economists argue against this approach because people differ in the amount of human capital they have and the kinds of work they are willing and able to do.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements is not correct?

Accepted Answer

A) Male workers with good looks tend to earn more than male workers with average looks 
B) If discriminating wage differentials persist in competitive markets, it is primarily because employers chose to discriminate even in spite of customer preferences. 
C) A higher level of human capital raises a worker's wages. 
D) In competitive markets, workers are paid a wage equal to the value of their marginal product. 
A) Male workers with good looks tend to earn more than male workers with average looks 
B) If discriminating wage differentials persist in competitive markets, it is primarily because employers chose to discriminate even in spite of customer preferences. 
C) A higher level of human capital raises a worker's wages. 
D) In competitive markets, workers are paid a wage equal to the value of their marginal product.

Question 14

Compensating differentials are differences in wages related to the characteristics of a job.

Accepted Answer

A) True 
 B)False

Question 15

The theory of efficiency wages suggests that

Accepted Answer

A) above-equilibrium wages increase worker productivity. 
B) workers with higher levels of education earn more than workers with lower levels of education. 
C) workers signal their high ability to potential employers by completing formal years of schooling. 
D) union workers earn more than nonunion workers. 
A) above-equilibrium wages increase worker productivity. 
B) workers with higher levels of education earn more than workers with lower levels of education. 
C) workers signal their high ability to potential employers by completing formal years of schooling. 
D) union workers earn more than nonunion workers.

Question 16

Public school teachers are known to have low wages. Which of the following would push the teachers' wages lower?

Accepted Answer

A) Public school teacher jobs are difficult. 
B) Public school teachers are required to be college graduates. 
C) Public school teachers belong to a union. 
D) Teaching in a public school has a high element of personal satisfaction. 
A) Public school teacher jobs are difficult. 
B) Public school teachers are required to be college graduates. 
C) Public school teachers belong to a union. 
D) Teaching in a public school has a high element of personal satisfaction.

Question 17

Figure 19-6  
-Refer to Figure 19-6. Given demand, D1, and supply, S2, how many workers are unemployed if a minimum wage of $8 per hour is imposed on this market?

Accepted Answer

The answer of Figure 19-6  
-Refer to Figure 19-6....

Question 18

Which of the following statements is correct?

Accepted Answer

A) Compensating wage differentials reflect different skills of workers. 
B) Discrimination by employers affects the marginal productivity of workers. 
C) The signaling theory of education suggests that schooling does not affect worker productivity. 
D) The superstar phenomenon explains why more talented entertainers earn more than less talented entertainers. 
A) Compensating wage differentials reflect different skills of workers. 
B) Discrimination by employers affects the marginal productivity of workers. 
C) The signaling theory of education suggests that schooling does not affect worker productivity. 
D) The superstar phenomenon explains why more talented entertainers earn more than less talented entertainers.

Question 19

If unskilled labor is relatively plentiful and cheap in many foreign countries, then as the United States expands its trade with these foreign countries, the domestic demand for

Accepted Answer

A) both skilled and unskilled labor will rise proportionately. 
B) skilled labor will fall and the demand for unskilled labor will rise. 
C) skilled labor will rise and the demand for unskilled labor will fall. 
D) both skilled and unskilled labor will be unaffected, assuming no barriers to free trade. 
A) both skilled and unskilled labor will rise proportionately. 
B) skilled labor will fall and the demand for unskilled labor will rise. 
C) skilled labor will rise and the demand for unskilled labor will fall. 
D) both skilled and unskilled labor will be unaffected, assuming no barriers to free trade.

Question 20

It is likely that, if we could measure the quality as well as the quantity of education,

Accepted Answer

A) the human-capital argument would become less compelling as a means of explaining wage differentials between white workers and black workers. 
B) the human-capital argument would become less compelling as a means of explaining wage differentials between male workers and female workers. 
C) wage differentials between white workers and black workers would be more puzzling than they are now. 
D) wage differentials between white workers and black workers would be more fully explained. 
A) the human-capital argument would become less compelling as a means of explaining wage differentials between white workers and black workers. 
B) the human-capital argument would become less compelling as a means of explaining wage differentials between male workers and female workers. 
C) wage differentials between white workers and black workers would be more puzzling than they are now. 
D) wage differentials between white workers and black workers would be more fully explained.

Exam 19: Earnings and Discrimination

The profit motive counteracts

When comparing average wages for male and female workers in the United States, wages paid to females have been about 40 percent less than those paid to male workers.

George and Brad are waiters at a local restaurant. The female customers prefer to be seated at the tables that George waits on because they think George is better looking than Brad. If George earns more than Brad because of his better looks, this is an example of

Discrimination by a manager in the hiring process

Which of the following might explain the beauty premium found by labor economists Hamermesh and Biddle?

Firms that operate in competitive product markets and choose to practice discrimination in hiring workers

Which of the following statements is correct?

Major league baseball players get paid more than minor league baseball players because of

Empirical evidence suggests that ability, effort, and chance are not likely to be significant contributors to wage differences.

Gerald earns a higher salary than his brother Peter because Gerald went to law school and is a lawyer, whereas Peter dropped out of college to work as a mechanic. The difference in salary illustrates a compensating differential.

Coal mining is a dangerous and dirty job. Suppose someone developed new machinery that made coal mining safer and cleaner; at the same time, suppose it made coal miners more productive. We would expect that the wages of coal miners would

Politicians often point to wage differentials as evidence of labor-market discrimination against ethnic minorities and women; however, economists argue against this approach because people differ in the amount of human capital they have and the kinds of work they are willing and able to do.

Which of the following statements is not correct?

Compensating differentials are differences in wages related to the characteristics of a job.

The theory of efficiency wages suggests that

Public school teachers are known to have low wages. Which of the following would push the teachers' wages lower?

Figure 19-6 -Refer to Figure 19-6. Given demand, D1, and supply, S2, how many workers are unemployed if a minimum wage of $8 per hour is imposed on this market?

Which of the following statements is correct?

If unskilled labor is relatively plentiful and cheap in many foreign countries, then as the United States expands its trade with these foreign countries, the domestic demand for

It is likely that, if we could measure the quality as well as the quantity of education,

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

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