Question 1

Which of the following is an example of human capital?

Accepted Answer

A) Machines built by people. 
B) Formal education acquired in schools. 
C) On-the-job training. 
D) Both b and c are correct. 
A) Machines built by people. 
B) Formal education acquired in schools. 
C) On-the-job training. 
D) Both b and c are correct.

Question 2

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

Accepted Answer

A) human capital 
B) discrimination 
C) unions 
D) All of the above could explain wage differences among groups. 
A) human capital 
B) discrimination 
C) unions 
D) All of the above could explain wage differences among groups.

Question 3

Which of the following is an example of customer discrimination?

Accepted Answer

A) A foreign government prevents women from legally working as teachers. 
B) White theater goers prefer to watch movies with white stars rather than black stars. 
C) Customers prefer more experienced lawyers over less experienced ones. 
D) All of the above are correct. 
A) A foreign government prevents women from legally working as teachers. 
B) White theater goers prefer to watch movies with white stars rather than black stars. 
C) Customers prefer more experienced lawyers over less experienced ones. 
D) All of the above are correct.

Question 4

Human capital is

Accepted Answer

A) a stock of equipment and structures. 
B) the result of investments workers make in themselves such as on-the-job training. 
C) a difference in wages that arises to offset the nonmonetary characteristics of different jobs. 
D) inversely related to the supply of workers. 
A) a stock of equipment and structures. 
B) the result of investments workers make in themselves such as on-the-job training. 
C) a difference in wages that arises to offset the nonmonetary characteristics of different jobs. 
D) inversely related to the supply of workers.

Question 5

Jill is the best eye surgeon in town, and she earns $350,000 a year. Susan is an average eye surgeon in town, and she earns $100,000 a year. Jill's skills as a surgeon

Accepted Answer

A) are valued more by the market relative to Susan's and that explains why her income is higher than Susan's. 
B) are valued less by the market relative to Susan's and that explains why her income is higher than Susan's. 
C) are valued less by the market relative to Susan's and that explains why her income is lower than Susan's. 
D) are more expensive because she receives a compensating differential. 
A) are valued more by the market relative to Susan's and that explains why her income is higher than Susan's. 
B) are valued less by the market relative to Susan's and that explains why her income is higher than Susan's. 
C) are valued less by the market relative to Susan's and that explains why her income is lower than Susan's. 
D) are more expensive because she receives a compensating differential.

Question 6

A study using data from the late 1960s showed that black baseball players earned less than comparable white players. Studies of more recent salaries in baseball, however, have found no evidence of discriminatory wage differentials.

Accepted Answer

A) True 
 B)False

Question 7

People who grew up in the western part of Aquilonia have an accent distinct from people who grew up in the eastern part of the country. People from the west also receive lower wages than people from the east. From this information alone, we can conclude that it is possible that

Accepted Answer

A) discrimination against people from the west exists. 
B) people from the east receive compensating differentials. 
C) people from the west have lower levels of human capital. 
D) All of the above could be correct. 
A) discrimination against people from the west exists. 
B) people from the east receive compensating differentials. 
C) people from the west have lower levels of human capital. 
D) All of the above could be correct.

Question 8

Among male workers over age 25, about what percent has a college degree? What is this percentage for black male workers over age 25?

Accepted Answer

The answer of Among male workers over age 25, about...

Question 9

A compensation scheme that pays salespeople a percentage of the sales they make is attempting to reward

Accepted Answer

A) work effort. 
B) loyalty to the firm. 
C) years of schooling. 
D) years of experience. 
A) work effort. 
B) loyalty to the firm. 
C) years of schooling. 
D) years of experience.

Question 10

John is an Asian 23-year-old male, and Ken is an Asian 43-year-old male. Both John and Ken are economics majors, and they graduated from the same college with the same GPA - John in 2006 and Ken in 1986. John and Ken are both financial advisers at the same brokerage firm. John earns $52,000 a year, and Ken earns $88,000 a year. Select the best explanation for this wage difference.

Accepted Answer

A) John has more human capital than Ken. 
B) John has less human capital than Ken. 
C) John has been discriminated against because he is young. 
D) Ken has been discriminated against because he is old. 
A) John has more human capital than Ken. 
B) John has less human capital than Ken. 
C) John has been discriminated against because he is young. 
D) Ken has been discriminated against because he is old.

Question 11

Dan and Dave are both college graduates. Dan is a patrolman and Dave is a detective in the same police precinct. While Dan's job is inherently more dangerous than Dave's, Dave passed a difficult exam to gain promotion to detective. Dave earns more than Dan because

Accepted Answer

A) Dave's job is less dangerous. 
B) of efficiency wages. 
C) of education as a signal. 
D) Dave has more human capital. 
A) Dave's job is less dangerous. 
B) of efficiency wages. 
C) of education as a signal. 
D) Dave has more human capital.

Question 12

Assume men, on balance, have lower amounts of human capital than women have. Then we would expect

Accepted Answer

A) the demand for female labor to be lower than the demand for male labor. 
B) the demand for female labor to be higher than the demand for male labor. 
C) the supply of female labor to be lower than the demand for male labor. 
D) the supply of female labor to be higher than the supply of male labor. 
A) the demand for female labor to be lower than the demand for male labor. 
B) the demand for female labor to be higher than the demand for male labor. 
C) the supply of female labor to be lower than the demand for male labor. 
D) the supply of female labor to be higher than the supply of male labor.

Question 13

Evidence from a study of the market for baseball players using 1960s data

Accepted Answer

A) indicated that sports with strong player associations are unlikely to experience wage discrimination. 
B) suggested that government regulation had eliminated most evidence of wage discrimination. 
C) found some evidence of consumer-driven wage discrimination. 
D) found that measurement of marginal productivity was very difficult for baseball players. 
A) indicated that sports with strong player associations are unlikely to experience wage discrimination. 
B) suggested that government regulation had eliminated most evidence of wage discrimination. 
C) found some evidence of consumer-driven wage discrimination. 
D) found that measurement of marginal productivity was very difficult for baseball players.

Question 14

The market wage could be higher than the equilibrium wage if a worker

Accepted Answer

A) belongs to a labor union. 
B) is covered by a minimum-wage law. 
C) is paid an efficiency wage. 
D) All of the above are correct. 
A) belongs to a labor union. 
B) is covered by a minimum-wage law. 
C) is paid an efficiency wage. 
D) All of the above are correct.

Question 15

According to the signaling view, education

Accepted Answer

A) has no effect on lifetime earnings. 
B) alters work ethic. 
C) enhances productivity. 
D) is an indicator of natural ability. 
A) has no effect on lifetime earnings. 
B) alters work ethic. 
C) enhances productivity. 
D) is an indicator of natural ability.

Question 16

A difference in wages between a highly-educated worker and a less-educated worker

Accepted Answer

A) may be due to a difference in the amounts of human capital between the workers. 
B) may be a signal that the market is indifferent to a worker's level of human capital. 
C) is considered unfair by economists. 
D) is considered unfair by everyone. 
A) may be due to a difference in the amounts of human capital between the workers. 
B) may be a signal that the market is indifferent to a worker's level of human capital. 
C) is considered unfair by economists. 
D) is considered unfair by everyone.

Question 17

Evidence of discrimination is most apparent when one compares wages among broad groups.

Accepted Answer

A) True 
 B)False

Question 18

Explain the theory that education acts as a signaling device. How does this contrast with the theory of education as an investment in human capital?

Accepted Answer

The theory of signaling suggests that th

Question 19

Which of the following theories explains why increased education translates into higher wages?

Accepted Answer

A) human-capital theory 
B) the theory of compensating differentials 
C) the theory of supply and demand 
D) comparative advantage 
A) human-capital theory 
B) the theory of compensating differentials 
C) the theory of supply and demand 
D) comparative advantage

Question 20

An effective minimum wage law will increase the quantity of labor demanded.

Accepted Answer

A) True 
 B)False

Exam 19: Earnings and Discrimination

Which of the following is an example of human capital?

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

Which of the following is an example of customer discrimination?

Human capital is

Jill is the best eye surgeon in town, and she earns $350,000 a year. Susan is an average eye surgeon in town, and she earns $100,000 a year. Jill's skills as a surgeon

A study using data from the late 1960s showed that black baseball players earned less than comparable white players. Studies of more recent salaries in baseball, however, have found no evidence of discriminatory wage differentials.

People who grew up in the western part of Aquilonia have an accent distinct from people who grew up in the eastern part of the country. People from the west also receive lower wages than people from the east. From this information alone, we can conclude that it is possible that

Among male workers over age 25, about what percent has a college degree? What is this percentage for black male workers over age 25?

A compensation scheme that pays salespeople a percentage of the sales they make is attempting to reward

Dan and Dave are both college graduates. Dan is a patrolman and Dave is a detective in the same police precinct. While Dan's job is inherently more dangerous than Dave's, Dave passed a difficult exam to gain promotion to detective. Dave earns more than Dan because

Assume men, on balance, have lower amounts of human capital than women have. Then we would expect

Evidence from a study of the market for baseball players using 1960s data

The market wage could be higher than the equilibrium wage if a worker

According to the signaling view, education

A difference in wages between a highly-educated worker and a less-educated worker

Evidence of discrimination is most apparent when one compares wages among broad groups.

Explain the theory that education acts as a signaling device. How does this contrast with the theory of education as an investment in human capital?

Which of the following theories explains why increased education translates into higher wages?

An effective minimum wage law will increase the quantity of labor demanded.

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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