Question 1

Which of the following is not an example of human capital for a college economics professor?

Accepted Answer

A) years of experience 
B) a doctorate in economics 
C) chalk 
D) what the professor has learned from seminar courses on effective teaching methods 
A) years of experience 
B) a doctorate in economics 
C) chalk 
D) what the professor has learned from seminar courses on effective teaching methods

Question 2

The difference in wages paid to major-league baseball players and minor-league baseball players is most likely due to

Accepted Answer

A) differences in chance. 
B) differences in natural ability. 
C) the fact that the players' union is strong. 
D) a compensating differential. 
A) differences in chance. 
B) differences in natural ability. 
C) the fact that the players' union is strong. 
D) a compensating differential.

Question 3

Studies show that white women earn approximately 25% less than white men. From this data alone, one should not conclude that white women are victims of discrimination. Name two other factors that could explain the difference in wages.

Accepted Answer

Differences in human

Question 4

A study by labor economists Hamermesh and Biddle found that

Accepted Answer

A) shorter-than-average men earn more than shorter-than-average women, all else equal. 
B) above-average looking people earn more than average-looking people, all else equal. 
C) shorter women earn more than taller women, all else equal. 
D) All of the above are correct. 
A) shorter-than-average men earn more than shorter-than-average women, all else equal. 
B) above-average looking people earn more than average-looking people, all else equal. 
C) shorter women earn more than taller women, all else equal. 
D) All of the above are correct.

Question 5

Labor unions will raise the quantity of labor demanded.

Accepted Answer

A) True 
 B)False

Question 6

A compensating differential refers to differences in pay due to

Accepted Answer

A) productivity levels of workers. 
B) signaling differences of workers. 
C) nonmonetary characteristics of jobs. 
D) All of the above are correct. 
A) productivity levels of workers. 
B) signaling differences of workers. 
C) nonmonetary characteristics of jobs. 
D) All of the above are correct.

Question 7

Human capital is

Accepted Answer

A) a stock of equipment and structures. 
B) the result of investments workers make in themselves such as education. 
C) a difference in wages that arises to offset the nonmonetary characteristics of different jobs. 
D) a characteristic that affects a worker's self-esteem but not her wages. 
A) a stock of equipment and structures. 
B) the result of investments workers make in themselves such as education. 
C) a difference in wages that arises to offset the nonmonetary characteristics of different jobs. 
D) a characteristic that affects a worker's self-esteem but not her wages.

Question 8

Maria has just graduated from Princeton University and has applied for a job at a major bank. The bank decides to offer Maria a job because they perceive her degree from Princeton to be an indication of her high-ability. To which of the following views of education does the bank subscribe?

Accepted Answer

A) signaling 
B) human-capital view 
C) superstar phenomenon 
D) benefits of beauty 
A) signaling 
B) human-capital view 
C) superstar phenomenon 
D) benefits of beauty

Question 9

Education raises wages because the demanders of labor

Accepted Answer

A) are willing to pay more for highly educated workers who have higher marginal products and the suppliers of labor are willing to pay the cost of becoming educated only if they are rewarded. 
B) are willing to pay the cost of becoming educated only if they are rewarded and the suppliers of labor are willing to pay more for highly educated workers who have higher marginal products. 
C) require fewer workers if they are highly educated. 
D) None of the above is correct. 
A) are willing to pay more for highly educated workers who have higher marginal products and the suppliers of labor are willing to pay the cost of becoming educated only if they are rewarded. 
B) are willing to pay the cost of becoming educated only if they are rewarded and the suppliers of labor are willing to pay more for highly educated workers who have higher marginal products. 
C) require fewer workers if they are highly educated. 
D) None of the above is correct.

Question 10

Which of the following can be used to help explain wage differences among different groups of workers?

Accepted Answer

A) human capital and compensating differentials 
B) human capital but not compensating differentials 
C) compensating differentials but not human capital 
D) neither human capital nor compensating differentials 
A) human capital and compensating differentials 
B) human capital but not compensating differentials 
C) compensating differentials but not human capital 
D) neither human capital nor compensating differentials

Question 11

Which of the following professionals is most likely to generate the income of a superstar?

Accepted Answer

A) the best teacher 
B) the best dentist 
C) the best guitar player 
D) the best airplane pilot 
A) the best teacher 
B) the best dentist 
C) the best guitar player 
D) the best airplane pilot

Question 12

Tiffany is a black 21-year-old female, and Danielle is a black 41-year-old female. Both Tiffany and Danielle were accounting majors, and they graduated from the same college with the same GPA - Tiffany in 2013 and Danielle in 1992. Tiffany and Danielle are both auditors at the same accounting firm. Tiffany earns $63,000 a year, and Danielle earns $95,000 a year. Select the best explanation for this wage difference.

Accepted Answer

A) Tiffany has more human capital than Danielle. 
B) Tiffany has less human capital than Danielle. 
C) Tiffany has been discriminated against because she is young. 
D) Danielle has been discriminated against because she is old. 
A) Tiffany has more human capital than Danielle. 
B) Tiffany has less human capital than Danielle. 
C) Tiffany has been discriminated against because she is young. 
D) Danielle has been discriminated against because she is old.

Question 13

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers in the United States offer two main hypotheses. Both hypotheses

Accepted Answer

A) suggest that, over time, the demand for unskilled labor has risen relative to the demand for skilled labor. 
B) suggest that, over time, the demand for skilled labor has risen relative to the demand for unskilled labor. 
C) emphasize the shrinking importance of international trade in recent years. 
D) emphasize the growing importance of women and teenagers in the workforce in recent years. 
A) suggest that, over time, the demand for unskilled labor has risen relative to the demand for skilled labor. 
B) suggest that, over time, the demand for skilled labor has risen relative to the demand for unskilled labor. 
C) emphasize the shrinking importance of international trade in recent years. 
D) emphasize the growing importance of women and teenagers in the workforce in recent years.

Question 14

Traci is a nurse, and she gets paid an additional $1.00 per hour for agreeing to work the night shift. Carol is also a nurse, but she works the day shift and does not get paid this extra dollar per hour. This difference in pay is an example of a compensating differential.

Accepted Answer

A) True 
 B)False

Question 15

Minimum wage laws

Accepted Answer

A) creates a surplus of labor in markets where the equilibrium wage is above the minimum wage. 
B) cannot be valid unless labor unions are sufficiently powerful to force enactment of those laws in the first place. 
C) are likely to have a greater effect on unskilled-labor markets than on skilled-labor markets. 
D) All of the above are correct. 
A) creates a surplus of labor in markets where the equilibrium wage is above the minimum wage. 
B) cannot be valid unless labor unions are sufficiently powerful to force enactment of those laws in the first place. 
C) are likely to have a greater effect on unskilled-labor markets than on skilled-labor markets. 
D) All of the above are correct.

Question 16

Which of the following is not an interpretation of the "beauty premium"?

Accepted Answer

A) Beautiful workers are not willing to work for lower wages. 
B) Good looks are a type of innate ability causing the worker to be more valuable to the firm. 
C) The beauty premium is a type of discrimination. 
D) Beauty is an indirect measure of other types of ability. 
A) Beautiful workers are not willing to work for lower wages. 
B) Good looks are a type of innate ability causing the worker to be more valuable to the firm. 
C) The beauty premium is a type of discrimination. 
D) Beauty is an indirect measure of other types of ability.

Question 17

One example of labor-market discrimination is that firms may be less likely to interview job-market candidates whose names suggest that they are members of a racial minority.

Accepted Answer

A) True 
 B)False

Question 18

On average, truck drivers who drive on dangerous ice-covered roads earn more per mile driven than similarly skilled truck drivers who drive on normal roads. The difference in pay can be attributed to

Accepted Answer

A) the marginal product of labor. 
B) the marginal product of capital. 
C) diminishing marginal returns. 
D) a compensating differential. 
A) the marginal product of labor. 
B) the marginal product of capital. 
C) diminishing marginal returns. 
D) a compensating differential.

Question 19

Consumers are often a primary source of discrimination in labor markets.

Accepted Answer

A) True 
 B)False

Question 20

Experimental evidence indicates women choose less competitive environments than men.

Accepted Answer

A) True 
 B)False

Exam 19: Earnings and Discrimination

Which of the following is not an example of human capital for a college economics professor?

The difference in wages paid to major-league baseball players and minor-league baseball players is most likely due to

Studies show that white women earn approximately 25% less than white men. From this data alone, one should not conclude that white women are victims of discrimination. Name two other factors that could explain the difference in wages.

A study by labor economists Hamermesh and Biddle found that

Labor unions will raise the quantity of labor demanded.

A compensating differential refers to differences in pay due to

Human capital is

Maria has just graduated from Princeton University and has applied for a job at a major bank. The bank decides to offer Maria a job because they perceive her degree from Princeton to be an indication of her high-ability. To which of the following views of education does the bank subscribe?

Education raises wages because the demanders of labor

Which of the following can be used to help explain wage differences among different groups of workers?

Which of the following professionals is most likely to generate the income of a superstar?

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers in the United States offer two main hypotheses. Both hypotheses

Traci is a nurse, and she gets paid an additional $1.00 per hour for agreeing to work the night shift. Carol is also a nurse, but she works the day shift and does not get paid this extra dollar per hour. This difference in pay is an example of a compensating differential.

Minimum wage laws

Which of the following is not an interpretation of the "beauty premium"?

One example of labor-market discrimination is that firms may be less likely to interview job-market candidates whose names suggest that they are members of a racial minority.

On average, truck drivers who drive on dangerous ice-covered roads earn more per mile driven than similarly skilled truck drivers who drive on normal roads. The difference in pay can be attributed to

Consumers are often a primary source of discrimination in labor markets.

Experimental evidence indicates women choose less competitive environments than men.

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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