Exam 19: Earnings and Discrimination

Scenario 19-6​ The after-school tutoring industry is competitive, and so is the labor market for after-school tutors. Suppose male and female tutors have equal experience and skill. Currently, some tutoring centers are biased and will only hire male tutors, while unbiased tutoring centers desire to hire the cheapest tutors and do not care about their genders. As a result, the equilibrium wage for male tutors is higher than that of female tutors. -Refer to Scenario 19-6. Long run competition in the after-school tutoring market is consistent with which of the following statements, assuming consumers do not discriminate between male and female tutors?

Figure 19-2 -Refer to Figure 19-2. This figure depicts labor demand and supply in a nonunionized labor market. The original equilibrium wage is $10. If a labor union subsequently establishes a union shop and negotiates an hourly wage of $12.50, then there will be an excess

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

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

Marcia is a white 23-year-old female, and Joan is a black 23-year-old female. Both Marcia and Joan were economics majors, and they graduated from the same college in the same year with the same GPA. Marcia and Joan both got identical jobs at a brokerage firm after graduating from college. They both work equally hard. Marcia earns $38,000 a year, and Joan earns $30,000 a year. Select the best explanation for this wage difference.

According to evidence provided by the U.S. government, the median black

A company has two locations where it employs workers doing the same job and working the same hours. Other things the same most workers would prefer to live in location A, but location A has a higher cost of living than location B.

In the United States, the earnings gap between workers with college degrees and workers with high school degrees

White women earn an average of 25% less than white men. A labor economist who wants to investigate whether the differences in earnings indicate labor-market discrimination against women should consider whether white men and women have similar (i)years of work experience. (ii)educational attainments. (iii)occupations. (iv)child care responsibilities.

If, as some economists believe, changes in technology over recent decades have brought about changes in labor markets, then those changes likely have resulted in

Differences in human capital are likely to

Scenario 19-6​ The after-school tutoring industry is competitive, and so is the labor market for after-school tutors. Suppose male and female tutors have equal experience and skill. Currently, some tutoring centers are biased and will only hire male tutors, while unbiased tutoring centers desire to hire the cheapest tutors and do not care about their genders. As a result, the equilibrium wage for male tutors is higher than that of female tutors. -Refer to Scenario 19-6. If consumers do not discriminate between biased and unbiased tutoring centers, then

About what proportion of the variation of wages across workers is explained by factors that can be measured? What are the other factors that explain wage differences but are difficult to measure?

In the signaling theory of education,

Consumers are often a primary source of discrimination in labor markets.

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

A cutting-edge biotech firm is hiring recent college graduates. To attract the very best applicants and to increase worker effort the firm is paying a wage 20% higher than the market wage for entry level employees in this industry. What is the term for the wage paid in this example?

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

Matthew just graduated from culinary school. He can earn $40,000 a year working for the same local bakery he has worked at since before starting culinary school, or accept a job offer he received after graduation from a high-end restaurant paying $70,000 a year. The higher salary is a result of

The wage gap between skilled and unskilled worker has