Question 1

Empirical evidence suggests that ability, effort, and chance are not likely to be significant contributors to wage differences.

Accepted Answer

A) True 
 B)False

Question 2

Figure 19-3
The manufacturing labor market.  
-Refer to Figure 19-3. Suppose the manufacturing labor market, which is non-unionized, is in equilibrium at a wage equal to $25. Suppose now that the AFL-CIO (a labor organization) organizes the workers in the manufacturing market and negotiates a wage of $30 per hour. Because of the union,

Accepted Answer

A) 80 people who were once employed are now unemployed. 
B) 40 people who were once employed are now unemployed. 
C) 80 people who were once unemployed are now employed. 
D) 40 people who were once unemployed are now employed. 
A) 80 people who were once employed are now unemployed. 
B) 40 people who were once employed are now unemployed. 
C) 80 people who were once unemployed are now employed. 
D) 40 people who were once unemployed are now employed.

Question 3

Which of the following statements is not correct?

Accepted Answer

A) Competitive markets tend to limit the impact of discrimination on wages. 
B) Differences in earnings of whites and blacks or men and women provide clear evidence of discrimination. 
C) Some differences in earnings are attributable to discrimination based on race, sex, or other factors. 
D) Profit-maximizing behavior can reduce discriminatory wage differentials. 
A) Competitive markets tend to limit the impact of discrimination on wages. 
B) Differences in earnings of whites and blacks or men and women provide clear evidence of discrimination. 
C) Some differences in earnings are attributable to discrimination based on race, sex, or other factors. 
D) Profit-maximizing behavior can reduce discriminatory wage differentials.

Question 4

Figure 19-5  
-Refer to Figure 19-5. Given demand for labor, D1, and supply of labor, S2, which of the following could be considered an efficiency wage?

Accepted Answer

A) $4 
B) $5 
C) $6 
D) $7 
A) $4 
B) $5 
C) $6 
D) $7

Question 5

The most important type of human capital is

Accepted Answer

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

Question 6

In the early twentieth century, streetcars in many southern cities were segregated by race. This racial segregation was the result of

Accepted Answer

A) laws that required such segregation. 
B) long-standing southern traditions about which the law was silent. 
C) streetcar firms trying to maximize profits. 
D) streetcar firms trying to minimize costs. 
A) laws that required such segregation. 
B) long-standing southern traditions about which the law was silent. 
C) streetcar firms trying to maximize profits. 
D) streetcar firms trying to minimize costs.

Question 7

Higher levels of human capital are correlated with higher earnings because firms are willing to pay more for better-educated workers who have higher marginal productivities.

Accepted Answer

A) True 
 B)False

Question 8

Labor-market discrimination is evident when

Accepted Answer

A) wages of individuals differ on the basis of some recognizable attribute that is unrelated to productivity. 
B) wage rates differ for similar jobs. 
C) consumers prefer to shop at some stores, and not at others. 
D) wages reflect workers' human capital. 
A) wages of individuals differ on the basis of some recognizable attribute that is unrelated to productivity. 
B) wage rates differ for similar jobs. 
C) consumers prefer to shop at some stores, and not at others. 
D) wages reflect workers' human capital.

Question 9

If employers are profit-maximizers, then

Accepted Answer

A) competition will always eventually eliminate employment discrimination. 
B) employment discrimination may persist if consumers discriminate. 
C) employment discrimination will persist because it is always profitable. 
D) compensating differentials cannot exist. 
A) competition will always eventually eliminate employment discrimination. 
B) employment discrimination may persist if consumers discriminate. 
C) employment discrimination will persist because it is always profitable. 
D) compensating differentials cannot exist.

Question 10

Which theory is supportive of the idea that increasing educational levels for all workers would raise all workers' productivity and therefore their wages?

Accepted Answer

A) the theory of compensating differentials 
B) the efficient-market hypothesis 
C) human-capital theory 
D) signaling theory 
A) the theory of compensating differentials 
B) the efficient-market hypothesis 
C) human-capital theory 
D) signaling theory

Question 11

A plumber who specializes in cleaning plugged sewer lines is typically paid a higher wage than a plumber who works on installing water systems in new residential housing. Which of the following would push the wages of plumbers who work on sewer lines higher?

Accepted Answer

A) Plumbers who work on new residential housing require more training than plumbers working on sewer lines. 
B) Plumbing jobs that involve sewer lines are likely to have a high element of personal satisfaction. 
C) Plumbers who work with sewer lines are more likely to work the day shift. 
D) plumbers who work with sewer lines are likely to be perceived as having a "dirty" job. 
A) Plumbers who work on new residential housing require more training than plumbers working on sewer lines. 
B) Plumbing jobs that involve sewer lines are likely to have a high element of personal satisfaction. 
C) Plumbers who work with sewer lines are more likely to work the day shift. 
D) plumbers who work with sewer lines are likely to be perceived as having a "dirty" job.

Question 12

A recent study of the determinants of wages for clerical staff at a state university found that years of schooling, years of experience, age and job characteristics only explained about one-half of the difference in wages. Describe other factors that may be important in explaining wages differences for clerical staff.

Accepted Answer

Other factors may include job

Question 13

The wage difference between jobs that require education and those that don't

Accepted Answer

A) is not likely to be related to productivity differences. 
B) is a barrier to obtaining an education. 
C) does not affect the supply of workers in the different labor markets. 
D) encourages workers to bear the cost of acquiring education. 
A) is not likely to be related to productivity differences. 
B) is a barrier to obtaining an education. 
C) does not affect the supply of workers in the different labor markets. 
D) encourages workers to bear the cost of acquiring education.

Question 14

A union's major source of power is its

Accepted Answer

A) high-profile leadership. 
B) ability to increase productivity. 
C) ability to threaten a strike. 
D) ability to deny employers the opportunity to bargain over wages. 
A) high-profile leadership. 
B) ability to increase productivity. 
C) ability to threaten a strike. 
D) ability to deny employers the opportunity to bargain over wages.

Question 15

Why do economists study sports teams when looking for evidence of labor-market discrimination?

Accepted Answer

A) because the salaries paid to professional athletes exhibit the superstar phenomenon, which is highly correlated with discrimination 
B) because all four United States professional sports leagues (football, basketball, hockey, and baseball) require discrimination studies every five years 
C) because nonwhites comprise a majority of starters for many professional sports teams 
D) because the wide availability of performance statistics allows economists to control for individual player productivity in ways that are difficult to do for other types of firms 
A) because the salaries paid to professional athletes exhibit the superstar phenomenon, which is highly correlated with discrimination 
B) because all four United States professional sports leagues (football, basketball, hockey, and baseball) require discrimination studies every five years 
C) because nonwhites comprise a majority of starters for many professional sports teams 
D) because the wide availability of performance statistics allows economists to control for individual player productivity in ways that are difficult to do for other types of firms

Question 16

Many kindergarten teachers have advanced education degrees, yet they have lower average earnings than other individuals with similar education levels. A potential explanation for the differences in earnings is that kindergarten teachers

Accepted Answer

A) have more pleasant working conditions. 
B) have less pleasant working conditions. 
C) work longer hours. 
D) must pass certification tests. 
A) have more pleasant working conditions. 
B) have less pleasant working conditions. 
C) work longer hours. 
D) must pass certification tests.

Question 17

Studies of professional sports teams suggest that, in sports, racial discrimination in previous decades was

Accepted Answer

A) rare. 
B) common and that owners of teams are largely to blame. 
C) common and that customers (fans) are largely to blame. 
D) None of the above is correct; there are no reliable studies of discrimination in sports due to the difficulties inherent in measuring athletes' productivity. 
A) rare. 
B) common and that owners of teams are largely to blame. 
C) common and that customers (fans) are largely to blame. 
D) None of the above is correct; there are no reliable studies of discrimination in sports due to the difficulties inherent in measuring athletes' productivity.

Question 18

Economists are skeptical that discrimination is employer driven because

Accepted Answer

A) discrimination cannot exist in markets. 
B) employers are not really interested in maximizing profit. 
C) employers typically base wages paid on the prevailing market wage. 
D) holding productivity constant, a profit-maximizing employer will hire the cheapest labor available. 
A) discrimination cannot exist in markets. 
B) employers are not really interested in maximizing profit. 
C) employers typically base wages paid on the prevailing market wage. 
D) holding productivity constant, a profit-maximizing employer will hire the cheapest labor available.

Question 19

Which of the following examples best describes the signaling theory of education?

Accepted Answer

A) The hiring manager offers a job to a recent college graduate because she is more beautiful than the rest of the applicants. 
B) The hiring manager offers a job to a recent college graduate because she is expected to be more productive than other applicants due to her educational attainment. 
C) The hiring manager offers a job to a recent college graduate because the hiring manager has a bias toward people with college degrees. 
D) The hiring manager offers a job to a recent college graduate because education is correlated with natural ability. 
A) The hiring manager offers a job to a recent college graduate because she is more beautiful than the rest of the applicants. 
B) The hiring manager offers a job to a recent college graduate because she is expected to be more productive than other applicants due to her educational attainment. 
C) The hiring manager offers a job to a recent college graduate because the hiring manager has a bias toward people with college degrees. 
D) The hiring manager offers a job to a recent college graduate because education is correlated with natural ability.

Question 20

Is measuring the effect of discrimination on wages relatively easy or relatively difficult? Explain?

Accepted Answer

It can be relatively difficult

Exam 19: Earnings and Discrimination

Empirical evidence suggests that ability, effort, and chance are not likely to be significant contributors to wage differences.

Which of the following statements is not correct?

Figure 19-5 -Refer to Figure 19-5. Given demand for labor, D1, and supply of labor, S2, which of the following could be considered an efficiency wage?

The most important type of human capital is

In the early twentieth century, streetcars in many southern cities were segregated by race. This racial segregation was the result of

Higher levels of human capital are correlated with higher earnings because firms are willing to pay more for better-educated workers who have higher marginal productivities.

Labor-market discrimination is evident when

If employers are profit-maximizers, then

Which theory is supportive of the idea that increasing educational levels for all workers would raise all workers' productivity and therefore their wages?

A plumber who specializes in cleaning plugged sewer lines is typically paid a higher wage than a plumber who works on installing water systems in new residential housing. Which of the following would push the wages of plumbers who work on sewer lines higher?

The wage difference between jobs that require education and those that don't

A union's major source of power is its

Why do economists study sports teams when looking for evidence of labor-market discrimination?

Many kindergarten teachers have advanced education degrees, yet they have lower average earnings than other individuals with similar education levels. A potential explanation for the differences in earnings is that kindergarten teachers

Studies of professional sports teams suggest that, in sports, racial discrimination in previous decades was

Economists are skeptical that discrimination is employer driven because

Which of the following examples best describes the signaling theory of education?

Is measuring the effect of discrimination on wages relatively easy or relatively difficult? Explain?

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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