Question 1

A compensating differential refers to a difference in wages that arises from nonmonetary characteristics.

Accepted Answer

A) True 
 B)False

Question 2

Park rangers at Yellowstone National Park are known to have low wages. This is probably because

Accepted Answer

A) park rangers are required to be college graduates. 
B) park rangers don't need much money to live. 
C) park ranger jobs are perceived to be dangerous. 
D) park ranger jobs are perceived to be "fun." 
A) park rangers are required to be college graduates. 
B) park rangers don't need much money to live. 
C) park ranger jobs are perceived to be dangerous. 
D) park ranger jobs are perceived to be "fun."

Question 3

Evidence of discrimination in labor markets

Accepted Answer

A) applies only to race and gender. 
B) is conclusively identified by large differences in average wages rates between men and women. 
C) is difficult to verify by reference to differences in average wage rates. 
D) is more easily identified on the basis of race than gender. 
A) applies only to race and gender. 
B) is conclusively identified by large differences in average wages rates between men and women. 
C) is difficult to verify by reference to differences in average wage rates. 
D) is more easily identified on the basis of race than gender.

Question 4

Increases in international trade and technological change have been offered as explanations for the

Accepted Answer

A) increase in demand for both skilled and unskilled workers in the United States. 
B) increase in demand for skilled workers and decrease in demand for unskilled workers in the United States. 
C) decrease in demand for skilled workers and increase in demand for skilled workers in the United States. 
D) decrease in demand for both skilled and unskilled workers. 
A) increase in demand for both skilled and unskilled workers in the United States. 
B) increase in demand for skilled workers and decrease in demand for unskilled workers in the United States. 
C) decrease in demand for skilled workers and increase in demand for skilled workers in the United States. 
D) decrease in demand for both skilled and unskilled workers.

Question 5

Scenario 19-2
Travis, a student at a community college, is considering what he should do for summer employment. Two recruiters show up at his school in search of summer workers. Recruiter A is looking for workers to help a disaster relief agency distribute food aid in Africa. Recruiter B is looking for custodial help to clean motel rooms in a motel located near the entrance to a famous national park.
-Refer to Scenario 19-2. Travis is carefully considering the options that each recruiter presents. On the basis of knowledge obtained in his economics class, Travis concludes that

Accepted Answer

A) if the motel job also requires an ability to do general plumbing repairs, the wage offer will be higher than otherwise. 
B) if the food distribution job has a requirement for special training or certification, the wage offer will be lower than otherwise. 
C) if the food distribution job exposes him to the Ebola virus, the wage will be lower. 
D) if the motel job involves substantial amounts of driving for supplies, the wage offer will be lower than otherwise. 
A) if the motel job also requires an ability to do general plumbing repairs, the wage offer will be higher than otherwise. 
B) if the food distribution job has a requirement for special training or certification, the wage offer will be lower than otherwise. 
C) if the food distribution job exposes him to the Ebola virus, the wage will be lower. 
D) if the motel job involves substantial amounts of driving for supplies, the wage offer will be lower than otherwise.

Question 6

Figure 19-5  
-Refer to Figure 19-5. Given demand for labor, D1, and supply of labor, S1, what is the surplus of labor if a minimum wage of $8 per hour is imposed on this market?

Accepted Answer

A) 100 
B) 200 
C) 300 
D) 400 
A) 100 
B) 200 
C) 300 
D) 400

Question 7

Figure 19-6  
-Refer to Figure 19-6. Given demand, D1, and supply, S1, 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 8

Some economists hypothesize that international trade has altered the relative demand for skilled and unskilled labor, changing the gap in earnings between these two groups. Which of the following statements best describes this hypothesis?

Accepted Answer

A) Unskilled labor is plentiful and cheap in the US, so the US tends to export goods produced with unskilled labor and import goods produced with skilled labor. 
B) Unskilled labor is plentiful and cheap in many foreign countries, so the US tends to import goods produced with unskilled labor and export goods produced with skilled labor. 
C) Computers raise the demand for skilled workers and reduce the demand for the unskilled workers whose jobs are replaced by the computers. 
D) Greater demand for skilled labor has led to higher wages for those workers and greater demand for imported products. 
A) Unskilled labor is plentiful and cheap in the US, so the US tends to export goods produced with unskilled labor and import goods produced with skilled labor. 
B) Unskilled labor is plentiful and cheap in many foreign countries, so the US tends to import goods produced with unskilled labor and export goods produced with skilled labor. 
C) Computers raise the demand for skilled workers and reduce the demand for the unskilled workers whose jobs are replaced by the computers. 
D) Greater demand for skilled labor has led to higher wages for those workers and greater demand for imported products.

Question 9

A 1990 study of the market for collectable baseball cards suggested

Accepted Answer

A) there was no evidence of price discrimination on the basis of player position (hitter versus pitcher). 
B) markets in which the product price is low are not typically characterized by consumer-driven race discrimination. 
C) cards for white players (both hitters and pitchers) were 10 to 13 percent higher than those for comparable black players. 
D) cards for black players (both hitters and pitchers) were 10 to 13 percent higher than those for comparable white players. 
A) there was no evidence of price discrimination on the basis of player position (hitter versus pitcher). 
B) markets in which the product price is low are not typically characterized by consumer-driven race discrimination. 
C) cards for white players (both hitters and pitchers) were 10 to 13 percent higher than those for comparable black players. 
D) cards for black players (both hitters and pitchers) were 10 to 13 percent higher than those for comparable white players.

Question 10

Jake and Zach are identical twins who attended grammar school through college together. Jake took a job as an engineer who does not have to travel out of the state. Zach took a job as an engineer who must travel out of state once a week. Jake earns $125,000 a year, and Zach earns $155,000 a year. Select the best explanation for this wage difference.

Accepted Answer

A) Zach puts in less effort than Jake. 
B) Zach has less human capital than Jake. 
C) Zach receives a higher wage to compensate for the disagreeable nature of business travel. 
D) Jake's lower salary supports the signaling theory of education. 
A) Zach puts in less effort than Jake. 
B) Zach has less human capital than Jake. 
C) Zach receives a higher wage to compensate for the disagreeable nature of business travel. 
D) Jake's lower salary supports the signaling theory of education.

Question 11

The most important type of human capital is

Accepted Answer

The answer of The most important type of human capital...

Question 12

Once during a U.S. presidential campaign, a lobbyist for a prominent national women's organization made the claim that women in the United States earn $0.60 for every $1.00 earned by a man. A reporter, who was prepared for this statement, asked the lobbyist why wages paid to the organization's secretarial staff (all of whom were women) were significantly below the national average if they were truly interested in raising the rates of compensation for women. If you were the lobbyist, how would you have answered this question? Do you think your answer is convincing? Explain.

Accepted Answer

The lobbyist would likely respond by cit

Question 13

The job of night watchman at the Punxsutawny Phil Groundhog museum is known to have a high wage. Which of the following would push the night watchman's wage higher?

Accepted Answer

A) The job does not require specialized skills. 
B) The job is easy. 
C) The job is incredibly dull. 
D) The job has minimal risk of injury. 
A) The job does not require specialized skills. 
B) The job is easy. 
C) The job is incredibly dull. 
D) The job has minimal risk of injury.

Question 14

The changing gap in wages between unskilled and skilled workers is most likely related to a larger increase in demand for unskilled occupations relative to skilled occupations.

Accepted Answer

A) True 
 B)False

Question 15

The "superstar" phenomenon can apply to which of these jobs?

Accepted Answer

A) high-school teacher 
B) author 
C) heart surgeon 
D) carpenter 
A) high-school teacher 
B) author 
C) heart surgeon 
D) carpenter

Question 16

Which of the following is not an explanation for why better educated workers earn more, on average, than less educated workers?

Accepted Answer

A) The higher wages may be a compensating differential for the cost of acquiring the education. 
B) Workers with a college degree signal their higher abilities to potential employers. 
C) Skilled labor is increasingly becoming a substitute for unskilled labor, which raises the earnings of workers with more education. 
D) Better educated workers are more productive, on average. 
A) The higher wages may be a compensating differential for the cost of acquiring the education. 
B) Workers with a college degree signal their higher abilities to potential employers. 
C) Skilled labor is increasingly becoming a substitute for unskilled labor, which raises the earnings of workers with more education. 
D) Better educated workers are more productive, on average.

Question 17

When discrimination occurs as a result of employer prejudice, discriminating firms do not maximize profits.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is not considered human capital?

Accepted Answer

A) the golf clubs a professional golfer uses to play golf 
B) the skills a professional golfer has gained by practicing on the driving range 
C) the professional golfer's knowledge of how to play a better game learned from talking with other players 
D) none of the above would be considered human capital 
A) the golf clubs a professional golfer uses to play golf 
B) the skills a professional golfer has gained by practicing on the driving range 
C) the professional golfer's knowledge of how to play a better game learned from talking with other players 
D) none of the above would be considered human capital

Question 19

Economists generally agree that

Accepted Answer

A) human capital theory provides the best explanation of discriminatory practices. 
B) differences in average wages do not by themselves provide conclusive evidence about the magnitude of discrimination in labor markets. 
C) discrimination is exclusively an economic, rather than political, phenomenon. 
D) most of the wage differentials observed in the U.S. economy are due to discrimination. 
A) human capital theory provides the best explanation of discriminatory practices. 
B) differences in average wages do not by themselves provide conclusive evidence about the magnitude of discrimination in labor markets. 
C) discrimination is exclusively an economic, rather than political, phenomenon. 
D) most of the wage differentials observed in the U.S. economy are due to discrimination.

Question 20

In order to explain the changing gap in earnings between skilled and unskilled workers in recent years, economists have proposed two hypotheses. One hypothesis emphasizes

Accepted Answer

A) compensating differentials. 
B) the increased recognition that a larger stock of human capital usually leads to higher earnings. 
C) the decreasing importance of labor unions. 
D) the increasing importance of international trade. 
A) compensating differentials. 
B) the increased recognition that a larger stock of human capital usually leads to higher earnings. 
C) the decreasing importance of labor unions. 
D) the increasing importance of international trade.

A compensating differential refers to a difference in wages that arises from nonmonetary characteristics.

Park rangers at Yellowstone National Park are known to have low wages. This is probably because

Evidence of discrimination in labor markets

Increases in international trade and technological change have been offered as explanations for the

Figure 19-5 -Refer to Figure 19-5. Given demand for labor, D1, and supply of labor, S1, what is the surplus of labor if a minimum wage of $8 per hour is imposed on this market?

Figure 19-6 -Refer to Figure 19-6. Given demand, D1, and supply, S1, how many workers are unemployed if a minimum wage of $8 per hour is imposed on this market?

Some economists hypothesize that international trade has altered the relative demand for skilled and unskilled labor, changing the gap in earnings between these two groups. Which of the following statements best describes this hypothesis?

A 1990 study of the market for collectable baseball cards suggested

The most important type of human capital is

The job of night watchman at the Punxsutawny Phil Groundhog museum is known to have a high wage. Which of the following would push the night watchman's wage higher?

The changing gap in wages between unskilled and skilled workers is most likely related to a larger increase in demand for unskilled occupations relative to skilled occupations.

The "superstar" phenomenon can apply to which of these jobs?

Which of the following is not an explanation for why better educated workers earn more, on average, than less educated workers?

When discrimination occurs as a result of employer prejudice, discriminating firms do not maximize profits.

Which of the following is not considered human capital?

Economists generally agree that

In order to explain the changing gap in earnings between skilled and unskilled workers in recent years, economists have proposed two hypotheses. One hypothesis emphasizes

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

Filters

Exam 19: Earnings and Discrimination

A compensating differential refers to a difference in wages that arises from nonmonetary characteristics.

Park rangers at Yellowstone National Park are known to have low wages. This is probably because

Evidence of discrimination in labor markets

Increases in international trade and technological change have been offered as explanations for the

Figure 19-5 -Refer to Figure 19-5. Given demand for labor, D1, and supply of labor, S1, what is the surplus of labor if a minimum wage of $8 per hour is imposed on this market?

Figure 19-6 -Refer to Figure 19-6. Given demand, D1, and supply, S1, how many workers are unemployed if a minimum wage of $8 per hour is imposed on this market?

Some economists hypothesize that international trade has altered the relative demand for skilled and unskilled labor, changing the gap in earnings between these two groups. Which of the following statements best describes this hypothesis?

A 1990 study of the market for collectable baseball cards suggested

The most important type of human capital is

The job of night watchman at the Punxsutawny Phil Groundhog museum is known to have a high wage. Which of the following would push the night watchman's wage higher?

The changing gap in wages between unskilled and skilled workers is most likely related to a larger increase in demand for unskilled occupations relative to skilled occupations.

The "superstar" phenomenon can apply to which of these jobs?

Which of the following is not an explanation for why better educated workers earn more, on average, than less educated workers?

When discrimination occurs as a result of employer prejudice, discriminating firms do not maximize profits.

Which of the following is not considered human capital?

Economists generally agree that

In order to explain the changing gap in earnings between skilled and unskilled workers in recent years, economists have proposed two hypotheses. One hypothesis emphasizes

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

Filters