Question 1

George and Susan work at the same brewery. George works in advertising. Susan works as a forewoman in the bottling plant. George is paid more than Susan.

Accepted Answer

A) Because the male worker earns a higher salary than the female worker, the employer must be discriminating against women. 
B) If George has better performance reviews than Susan, the company might be rewarding George for his high productivity. 
C) If forepersons at bottling plants typically earn more than employees in the advertising department, then the brewery must be discriminating against women. 
D) George might be earning more because he works the day shift while Susan works the night shift. 
A) Because the male worker earns a higher salary than the female worker, the employer must be discriminating against women. 
B) If George has better performance reviews than Susan, the company might be rewarding George for his high productivity. 
C) If forepersons at bottling plants typically earn more than employees in the advertising department, then the brewery must be discriminating against women. 
D) George might be earning more because he works the day shift while Susan works the night shift.

Question 2

Table 19-2   Source: US Census Bureau and Mankiw's calculations
-Refer to Table 19-2. What are two possible hypotheses to explain the changes in relative demand for high-skilled workers and low-skilled workers in recent years?

Accepted Answer

increased internatio

Question 3

On average professors of finance earn more than professors of economics. Other things the same, what does this imply about the supply of each type of professor?

Accepted Answer

This implies the supply of pro

Question 4

In the early twentieth century, racial segregation of streetcars in the southern cities was largely opposed by

Accepted Answer

A) streetcar firms. 
B) government officials. 
C) Federal lawyers applying the Sherman antitrust laws. 
D) consumers. 
A) streetcar firms. 
B) government officials. 
C) Federal lawyers applying the Sherman antitrust laws. 
D) consumers.

Question 5

Harry is 40 and black. Dan is 40 and white. Both work as plumbers, but Harry earns more.

Accepted Answer

A) Dan is being discriminated against. 
B) Harry might be discriminated against if he has more experience as a plumber. 
C) Harry might be discriminated against if he has less training as a plumber. 
D) Harry might be discriminated against if he works the day shift and Dan works the night shift. 
A) Dan is being discriminated against. 
B) Harry might be discriminated against if he has more experience as a plumber. 
C) Harry might be discriminated against if he has less training as a plumber. 
D) Harry might be discriminated against if he works the day shift and Dan works the night shift.

Question 6

Which of the following is an example of human capital for a college economics professor?

Accepted Answer

A) years of experience 
B) "clickers" which interface with an in-class computer system and display the results of student "votes" 
C) chalk 
D) internet access in the classroom 
A) years of experience 
B) "clickers" which interface with an in-class computer system and display the results of student "votes" 
C) chalk 
D) internet access in the classroom

Question 7

The fact that wage differentials continue to exist across different groups of workers leads economists to believe that

Accepted Answer

A) discrimination by customers is the most common type of economic discrimination. 
B) differences in human capital and job characteristics must be important in explaining the differences in wages. 
C) firms apparently are not profit maximizers. 
D) the market has failed to properly allocate wages to different workers. 
A) discrimination by customers is the most common type of economic discrimination. 
B) differences in human capital and job characteristics must be important in explaining the differences in wages. 
C) firms apparently are not profit maximizers. 
D) the market has failed to properly allocate wages to different workers.

Question 8

The case study of segregated street cars in southern cities illustrates which of the following?

Accepted Answer

A) Streetcar owners opposed segregation laws primarily because they were concerned with civil rights. 
B) Segregation laws were supported by both local business owners and patrons. 
C) Firms usually care more about maximizing profits than discriminating against certain customers. 
D) Laws passed by the government cannot reduce discrimination. 
A) Streetcar owners opposed segregation laws primarily because they were concerned with civil rights. 
B) Segregation laws were supported by both local business owners and patrons. 
C) Firms usually care more about maximizing profits than discriminating against certain customers. 
D) Laws passed by the government cannot reduce discrimination.

Question 9

Discrimination by a manager in the hiring process may be consistent with the decision to maximize profits if

Accepted Answer

A) customers are willing to pay higher prices in order to maintain the discrimination. 
B) the discrimination is based on race but not gender. 
C) the discrimination is based on gender but not race. 
D) Discrimination is never consistent with profit maximization. 
A) customers are willing to pay higher prices in order to maintain the discrimination. 
B) the discrimination is based on race but not gender. 
C) the discrimination is based on gender but not race. 
D) Discrimination is never consistent with profit maximization.

Question 10

If men, on average, earn 20 percent more than women in a particular occupation,

Accepted Answer

A) this is clear evidence of discrimination. 
B) some of this differential could be due to differences in educational levels. 
C) some of this differential could be due to differences in human capital. 
D) Both b and c are correct. 
A) this is clear evidence of discrimination. 
B) some of this differential could be due to differences in educational levels. 
C) some of this differential could be due to differences in human capital. 
D) Both b and c are correct.

Question 11

Explain the role of job experience in explaining the differences between the average wages of men and women.

Accepted Answer

Women, who have primary responsibility f

Question 12

If a worker is indifferent between a job with a wage of $10 per hour and a job with a wage of $12 per hour, then the

Accepted Answer

A) higher-paying job has a compensating wage differential of $2 per hour. 
B) higher-paying job has a compensating wage differential of $12 per hour. 
C) higher-paying job is intrinsically more attractive than the lower-paying job. 
D) wage in the higher-paying job must eventually fall due to competition. 
A) higher-paying job has a compensating wage differential of $2 per hour. 
B) higher-paying job has a compensating wage differential of $12 per hour. 
C) higher-paying job is intrinsically more attractive than the lower-paying job. 
D) wage in the higher-paying job must eventually fall due to competition.

Question 13

The fact that movie star Angelina Jolie's salary is much higher than the salary earned by the world's best nurse can best be explained by the

Accepted Answer

A) failure of the market to reward talent fairly. 
B) large number of nurses. 
C) willingness of some people to accept a lower wage rate in order to do work they find personally rewarding. 
D) superstar phenomenon. 
A) failure of the market to reward talent fairly. 
B) large number of nurses. 
C) willingness of some people to accept a lower wage rate in order to do work they find personally rewarding. 
D) superstar phenomenon.

Question 14

Of the theories listed below, which do the best job of explaining why educated people are paid more than uneducated people?

Accepted Answer

A) human-capital and price-fixing 
B) human-capital and signaling 
C) wage-differential and signaling 
D) wage-differential and compensating-differentials 
A) human-capital and price-fixing 
B) human-capital and signaling 
C) wage-differential and signaling 
D) wage-differential and compensating-differentials

Question 15

The accumulation of investments in people is called

Accepted Answer

The answer of The accumulation of investments in people is...

Question 16

A competitive market may be consistent with a discriminatory wage differential if

Accepted Answer

A) firms' customers have discriminatory preferences. 
B) the wage differential is explained by a compensating differential. 
C) the wage differential is explained by differences in human capital. 
D) All of the above are correct. 
A) firms' customers have discriminatory preferences. 
B) the wage differential is explained by a compensating differential. 
C) the wage differential is explained by differences in human capital. 
D) All of the above are correct.

Question 17

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 18

If firms are competitive, then labor-market discrimination

Accepted Answer

A) cannot exist in either the short run or the long run. 
B) will be more of a problem than if the market were monopolistic or imperfectly competitive. 
C) likely will not be a long-run problem unless customers exhibit discriminatory preferences or government maintains discriminatory policies. 
D) likely will be more of a problem in the long run than in the short run due to the zero-profit condition that characterizes long-run equilibrium for competitive firms. 
A) cannot exist in either the short run or the long run. 
B) will be more of a problem than if the market were monopolistic or imperfectly competitive. 
C) likely will not be a long-run problem unless customers exhibit discriminatory preferences or government maintains discriminatory policies. 
D) likely will be more of a problem in the long run than in the short run due to the zero-profit condition that characterizes long-run equilibrium for competitive firms.

Question 19

Above-equilibrium wages caused by efficiency wages will most likely result in

Accepted Answer

A) a shortage of labor. 
B) increased unemployment. 
C) compensating wage differentials. 
D) an decrease in the quantity of labor supplied. 
A) a shortage of labor. 
B) increased unemployment. 
C) compensating wage differentials. 
D) an decrease in the quantity of labor supplied.

Question 20

In the early 20th century, segregation of street cars made streetcar companies

Accepted Answer

A) more profitable and was supported by private streetcar companies. 
B) more profitable but was opposed by private streetcar companies. 
C) less profitable but was supported by private streetcar companies. 
D) less profitable and was opposed by private streetcar companies. 
A) more profitable and was supported by private streetcar companies. 
B) more profitable but was opposed by private streetcar companies. 
C) less profitable but was supported by private streetcar companies. 
D) less profitable and was opposed by private streetcar companies.

Exam 19: Earnings and Discrimination

George and Susan work at the same brewery. George works in advertising. Susan works as a forewoman in the bottling plant. George is paid more than Susan.

Table 19-2 Source: US Census Bureau and Mankiw's calculations -Refer to Table 19-2. What are two possible hypotheses to explain the changes in relative demand for high-skilled workers and low-skilled workers in recent years?

On average professors of finance earn more than professors of economics. Other things the same, what does this imply about the supply of each type of professor?

In the early twentieth century, racial segregation of streetcars in the southern cities was largely opposed by

Harry is 40 and black. Dan is 40 and white. Both work as plumbers, but Harry earns more.

Which of the following is an example of human capital for a college economics professor?

The fact that wage differentials continue to exist across different groups of workers leads economists to believe that

The case study of segregated street cars in southern cities illustrates which of the following?

Discrimination by a manager in the hiring process may be consistent with the decision to maximize profits if

If men, on average, earn 20 percent more than women in a particular occupation,

Explain the role of job experience in explaining the differences between the average wages of men and women.

If a worker is indifferent between a job with a wage of $10 per hour and a job with a wage of $12 per hour, then the

The fact that movie star Angelina Jolie's salary is much higher than the salary earned by the world's best nurse can best be explained by the

Of the theories listed below, which do the best job of explaining why educated people are paid more than uneducated people?

The accumulation of investments in people is called

A competitive market may be consistent with a discriminatory wage differential if

If firms are competitive, then labor-market discrimination

Above-equilibrium wages caused by efficiency wages will most likely result in

In the early 20th century, segregation of street cars made streetcar companies

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

Applications: 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

Measuring a Nation S Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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