Question 1

Which of the following would be considered human capital?

Accepted Answer

A) the financial capital a person earns over a lifetime of investing 
B) the machinery a worker uses to produce a product 
C) the training a worker receives when starting a new job 
D) the break room in a factory where employees go to have coffee 
A) the financial capital a person earns over a lifetime of investing 
B) the machinery a worker uses to produce a product 
C) the training a worker receives when starting a new job 
D) the break room in a factory where employees go to have coffee

Question 2

Which of the following is an example of a compensating differential?

Accepted Answer

A) paying workers with more years of experience higher wages than workers with fewer years of experience, all else equal 
B) paying workers who work on the day shift lower wages than workers who work the night shift, all else equal 
C) paying accountants who have passed the Certified Public Accountant exam higher wages than accountants who have not passed it, all else equal 
D) All of the above are examples of compensating differentials. 
A) paying workers with more years of experience higher wages than workers with fewer years of experience, all else equal 
B) paying workers who work on the day shift lower wages than workers who work the night shift, all else equal 
C) paying accountants who have passed the Certified Public Accountant exam higher wages than accountants who have not passed it, all else equal 
D) All of the above are examples of compensating differentials.

Question 3

Which of the following factors does not affect the value of a worker's marginal product?

Accepted Answer

A) discrimination against a particular group of workers by a firm's customers 
B) a worker's level of disposable income 
C) a worker's level of human capital 
D) compensating wage differentials 
A) discrimination against a particular group of workers by a firm's customers 
B) a worker's level of disposable income 
C) a worker's level of human capital 
D) compensating wage differentials

Question 4

Figure 19-6  
-Refer to Figure 19-6. Given demand, D1, and supply, S1, how much more do workers earn per hour if the supply curve shifts to S2?

Accepted Answer

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

Question 5

Adam and Bob are identical twins who attended grammar school through high school together. Adam got a job after high school, and Bob got a job after graduating from college. Adam earns $36,000 a year, and Bob earns $69,000 a year. Select the best explanation for this wage difference.

Accepted Answer

A) Adam has less human capital than Bob. 
B) Bob has less human capital than Adam. 
C) Adam has received a compensating differential 
D) Adam is a member of a union. 
A) Adam has less human capital than Bob. 
B) Bob has less human capital than Adam. 
C) Adam has received a compensating differential 
D) Adam is a member of a union.

Question 6

According to economic historians, streetcars in southern cities in the early 1900s were racially segregated because the owners of the firms believed that segregation raised the firms' profits.

Accepted Answer

A) True 
 B)False

Question 7

The superstar phenomenon explains why professional athletes earn more than amateur athletes.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is not an example of a compensating differential?

Accepted Answer

A) Chris is a consultant who is paid more than other workers with similar skills because he is required to travel 80% of the time. 
B) Abby is a teacher who is paid less than other workers with similar skills because she does not have to work during the summer months. 
C) Ben is a businessman who is paid more than other workers with similar skills because he graduated from a prestigious university with honors. 
D) Daphne is a skyscraper window-washer who is paid more than other workers with similar skills because of the risk she faces in her daily job. 
A) Chris is a consultant who is paid more than other workers with similar skills because he is required to travel 80% of the time. 
B) Abby is a teacher who is paid less than other workers with similar skills because she does not have to work during the summer months. 
C) Ben is a businessman who is paid more than other workers with similar skills because he graduated from a prestigious university with honors. 
D) Daphne is a skyscraper window-washer who is paid more than other workers with similar skills because of the risk she faces in her daily job.

Question 9

Nancy and Sheila are both loan officers who graduated from the same university with bachelors' degrees in economics, and achieved similar performance reviews. Nancy started working one year before Sheila. If Nancy earns a higher annual salary than Sheila because she has more experience, the employer is

Accepted Answer

A) rewarding increases in human capital. 
B) paying efficiency wages. 
C) practicing discrimination. 
D) paying a compensating differential. 
A) rewarding increases in human capital. 
B) paying efficiency wages. 
C) practicing discrimination. 
D) paying a compensating differential.

Question 10

A prestigious private high school requires each of its teachers to have a Ph.D. in the subject they teach. This requirement is likely to

Accepted Answer

A) increase the supply of teachers to this school. 
B) increase wages for teachers at the private school relative to those at public schools. 
C) decrease the marginal product of teachers at the private school. 
D) All of the above are correct. 
A) increase the supply of teachers to this school. 
B) increase wages for teachers at the private school relative to those at public schools. 
C) decrease the marginal product of teachers at the private school. 
D) All of the above are correct.

Question 11

Superstars arise in markets in which every customer in the market is able to enjoy the good supplied by the

Accepted Answer

The answer of Superstars arise in markets in which every...

Question 12

Figure 19-2  
-Refer to Figure 19-2. This figure depicts labor demand and supply in a nonunionized labor market. If the minimum wage were $7.50, employment in this market would be

Accepted Answer

A) 400 
B) 500 
C) 600 
D) 700 
A) 400 
B) 500 
C) 600 
D) 700

Question 13

The signaling theory of education suggests that when people earn a college degree they do not become more productive, but they do signal their high ability to prospective employers.

Accepted Answer

A) True 
 B)False

Question 14

Since measurable factors such as years of experience and years of education explain less than half of the variation in wages, ability, effort, and chance must play a significant role in determining wages.

Accepted Answer

A) True 
 B)False

Question 15

Other things equal, one would predict that market wages would be relatively high when

Accepted Answer

A) the supply of labor is high. 
B) the demand for labor is low. 
C) the supply of labor is low. 
D) Both (a.) and (b.) are correct 
A) the supply of labor is high. 
B) the demand for labor is low. 
C) the supply of labor is low. 
D) Both (a.) and (b.) are correct

Question 16

Effective minimum-wage laws will most likely

Accepted Answer

A) increase demand for labor. 
B) create a surplus of labor. 
C) increase incomes for all unskilled workers. 
D) decrease incomes for all unskilled workers. 
A) increase demand for labor. 
B) create a surplus of labor. 
C) increase incomes for all unskilled workers. 
D) decrease incomes for all unskilled workers.

Question 17

Some discriminatory hiring practices can be expected, even if markets are competitive, as a result of

Accepted Answer

A) unrestricted entry and exit in markets. 
B) lower costs of hiring. 
C) a perfectly elastic market demand. 
D) customer preferences. 
A) unrestricted entry and exit in markets. 
B) lower costs of hiring. 
C) a perfectly elastic market demand. 
D) customer preferences.

Question 18

Paul and David work for the same company and have the same job title, education, work experience, and are equally skilled at what they do. Paul works the night shift and is paid $60,000 a year, while David works a regular day shift and is paid $55,000 a year. Which of the following is the best explanation for why Paul earns more than David?

Accepted Answer

A) Paul has more human capital than David. 
B) David has more human capital than Paul. 
C) Paul has received a compensating differential. 
D) Aside from pay, the night shift is more desirable than the day shift. 
A) Paul has more human capital than David. 
B) David has more human capital than Paul. 
C) Paul has received a compensating differential. 
D) Aside from pay, the night shift is more desirable than the day shift.

Question 19

Philip is an average contractor in town, and he earns $40,000 a year. Billy is the best contractor in town, and he earns $480,000 a year. Philip's contracting services

Accepted Answer

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

Question 20

Explain the role that consumers play in perpetuating discrimination in labor markets.

Accepted Answer

Consumers are able to exercise their bia

Which of the following would be considered human capital?

Which of the following is an example of a compensating differential?

Which of the following factors does not affect the value of a worker's marginal product?

Figure 19-6 -Refer to Figure 19-6. Given demand, D1, and supply, S1, how much more do workers earn per hour if the supply curve shifts to S2?

Adam and Bob are identical twins who attended grammar school through high school together. Adam got a job after high school, and Bob got a job after graduating from college. Adam earns $36,000 a year, and Bob earns $69,000 a year. Select the best explanation for this wage difference.

According to economic historians, streetcars in southern cities in the early 1900s were racially segregated because the owners of the firms believed that segregation raised the firms' profits.

The superstar phenomenon explains why professional athletes earn more than amateur athletes.

Which of the following is not an example of a compensating differential?

A prestigious private high school requires each of its teachers to have a Ph.D. in the subject they teach. This requirement is likely to

Superstars arise in markets in which every customer in the market is able to enjoy the good supplied by the

Figure 19-2 -Refer to Figure 19-2. This figure depicts labor demand and supply in a nonunionized labor market. If the minimum wage were $7.50, employment in this market would be

The signaling theory of education suggests that when people earn a college degree they do not become more productive, but they do signal their high ability to prospective employers.

Since measurable factors such as years of experience and years of education explain less than half of the variation in wages, ability, effort, and chance must play a significant role in determining wages.

Other things equal, one would predict that market wages would be relatively high when

Effective minimum-wage laws will most likely

Some discriminatory hiring practices can be expected, even if markets are competitive, as a result of

Philip is an average contractor in town, and he earns $40,000 a year. Billy is the best contractor in town, and he earns $480,000 a year. Philip's contracting services

Explain the role that consumers play in perpetuating discrimination in labor markets.

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

Which of the following would be considered human capital?

Which of the following is an example of a compensating differential?

Which of the following factors does not affect the value of a worker's marginal product?

Figure 19-6 -Refer to Figure 19-6. Given demand, D1, and supply, S1, how much more do workers earn per hour if the supply curve shifts to S2?

Adam and Bob are identical twins who attended grammar school through high school together. Adam got a job after high school, and Bob got a job after graduating from college. Adam earns $36,000 a year, and Bob earns $69,000 a year. Select the best explanation for this wage difference.

According to economic historians, streetcars in southern cities in the early 1900s were racially segregated because the owners of the firms believed that segregation raised the firms' profits.

The superstar phenomenon explains why professional athletes earn more than amateur athletes.

Which of the following is not an example of a compensating differential?

A prestigious private high school requires each of its teachers to have a Ph.D. in the subject they teach. This requirement is likely to

Superstars arise in markets in which every customer in the market is able to enjoy the good supplied by the

Figure 19-2 -Refer to Figure 19-2. This figure depicts labor demand and supply in a nonunionized labor market. If the minimum wage were $7.50, employment in this market would be

The signaling theory of education suggests that when people earn a college degree they do not become more productive, but they do signal their high ability to prospective employers.

Since measurable factors such as years of experience and years of education explain less than half of the variation in wages, ability, effort, and chance must play a significant role in determining wages.

Other things equal, one would predict that market wages would be relatively high when

Effective minimum-wage laws will most likely

Some discriminatory hiring practices can be expected, even if markets are competitive, as a result of

Philip is an average contractor in town, and he earns $40,000 a year. Billy is the best contractor in town, and he earns $480,000 a year. Philip's contracting services

Explain the role that consumers play in perpetuating discrimination in labor markets.

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