Question 1

The statement that "coal miners are paid more than workers with similar levels of education" is likely to reflect the fact that

Accepted Answer

A) coal mining is a declining industry. 
B) coal mining jobs are potentially more dangerous than jobs with comparable education requirements. 
C) all coal mines use nonunion labor. 
D) coal imports are rising. 
A) coal mining is a declining industry. 
B) coal mining jobs are potentially more dangerous than jobs with comparable education requirements. 
C) all coal mines use nonunion labor. 
D) coal imports are rising.

Question 2

One example of labor-market discrimination is that a firm may be less likely to interview a job candidate whose resume clearly indicates he is not a good fit for the job.

Accepted Answer

A) True 
 B)False

Question 3

Christy and Claudia are aspiring models. Talent scouts consider them to be similarly beautiful. Both enter a talent show. Claudia contracts food poisoning the night before the competition and withdraws. Christy wins the competition and signs a multi-million dollar contract. The differences in their earnings likely reflect

Accepted Answer

A) discrimination. 
B) differences in human capital. 
C) differences in signaling. 
D) chance. 
A) discrimination. 
B) differences in human capital. 
C) differences in signaling. 
D) chance.

Question 4

Which of the following can be used to help explain wage differences among different groups of workers?

Accepted Answer

A) human capital 
B) discrimination 
C) unions 
D) All of the above could explain wage differences among groups. 
A) human capital 
B) discrimination 
C) unions 
D) All of the above could explain wage differences among groups.

Question 5

If an employer's behavior is supportive of the theory of efficiency wages, the employer would

Accepted Answer

A) raise wages in an effort to increase worker effort. 
B) raise wages in an effort to increase worker turnover. 
C) decrease wages in an effort to increase worker effort. 
D) decrease wages in an effort to increase worker turnover. 
A) raise wages in an effort to increase worker effort. 
B) raise wages in an effort to increase worker turnover. 
C) decrease wages in an effort to increase worker effort. 
D) decrease wages in an effort to increase worker turnover.

Question 6

After graduating from college, you receive job offers from five different accounting firms. All job offers have a different compensation package. Is it irrational for you to accept an offer that doesn't provide the highest level of monetary compensation? Use the concept of compensating differentials to explain your answer.

Accepted Answer

Compensating differentials refer to diff

Question 7

In general, the higher a person's education level,

Accepted Answer

A) the higher the person's earnings. 
B) the more physically attractive the person is likely to be. 
C) the more socially outgoing the person is likely to be. 
D) All of the above are correct. 
A) the higher the person's earnings. 
B) the more physically attractive the person is likely to be. 
C) the more socially outgoing the person is likely to be. 
D) All of the above are correct.

Question 8

Which of the following is an economic explanation for the "beauty premium"?

Accepted Answer

A) Employers pay very attractive women less than average-looking women because they believe them to be less intelligent. 
B) Employers pay above-average-looking men more than above-average-looking women. 
C) Employers pay above-average-looking women more than average-looking women because customers prefer to deal with better-looking women. 
D) Employers pay above-average-looking men more because they signal to the market that they are willing to spend more money on personal grooming, a sign of wealth and stability. 
A) Employers pay very attractive women less than average-looking women because they believe them to be less intelligent. 
B) Employers pay above-average-looking men more than above-average-looking women. 
C) Employers pay above-average-looking women more than average-looking women because customers prefer to deal with better-looking women. 
D) Employers pay above-average-looking men more because they signal to the market that they are willing to spend more money on personal grooming, a sign of wealth and stability.

Question 9

Sometimes wages are set above the equilibrium level when

Accepted Answer

A) garbage collectors earn higher wages than secretaries due to compensating differentials. 
B) accountants earn more than dental technicians due to higher educational requirements. 
C) movie superstars earn more than talented plumbers. 
D) unions negotiate higher wages by threatening to strike. 
A) garbage collectors earn higher wages than secretaries due to compensating differentials. 
B) accountants earn more than dental technicians due to higher educational requirements. 
C) movie superstars earn more than talented plumbers. 
D) unions negotiate higher wages by threatening to strike.

Question 10

Certain factors that are probably important in determining wages are nevertheless difficult to measure. Consequently, labor economists find those factors difficult to incorporate into their studies of labor markets and wages. Those factors include

Accepted Answer

A) effort and natural ability. 
B) natural ability and years of experience. 
C) years of experience and job characteristics. 
D) race and job characteristics. 
A) effort and natural ability. 
B) natural ability and years of experience. 
C) years of experience and job characteristics. 
D) race and job characteristics.

Question 11

The time spent by students in college

Accepted Answer

A) leads to lower lifetime earnings because opportunity costs are high. 
B) is an investment in human capital. 
C) decreases human capital by lowering work experience. 
D) increases as the wages paid to low-skilled workers rise. 
A) leads to lower lifetime earnings because opportunity costs are high. 
B) is an investment in human capital. 
C) decreases human capital by lowering work experience. 
D) increases as the wages paid to low-skilled workers rise.

Question 12

Consider two groups of workers of equal skill level and experience: those who collect garbage and those who stuff envelopes with campaign fliers. Which group is likely to be paid more and why?

Accepted Answer

garbage co

Question 13

Other things equal, a particular job will likely pay a higher wage if it involves

Accepted Answer

A) danger to the worker. 
B) personal enjoyment for the worker. 
C) intellectual stimulation for the worker. 
D) All of the above are correct. 
A) danger to the worker. 
B) personal enjoyment for the worker. 
C) intellectual stimulation for the worker. 
D) All of the above are correct.

Question 14

Discrimination may persist even in competitive markets when the source of the discrimination is

Accepted Answer

A) employer prejudice. 
B) customer prejudice. 
C) wage prejudice. 
D) employee prejudice. 
A) employer prejudice. 
B) customer prejudice. 
C) wage prejudice. 
D) employee prejudice.

Question 15

One reason why better-looking workers may have higher earnings is that physical attractiveness is correlated with intelligence.

Accepted Answer

A) True 
 B)False

Question 16

In the presence of discrimination by customers,

Accepted Answer

A) market forces nevertheless always work to prevent discriminatory wage differentials. 
B) discriminatory wage differentials can exist, but only if firms refrain from maximizing their profits. 
C) discriminatory wage differentials can exist, but only if government reinforces customers' practices by passing laws that mandate discrimination. 
D) discriminatory wage differentials can exist, even in the absence of discriminatory practices by firms or by government. 
A) market forces nevertheless always work to prevent discriminatory wage differentials. 
B) discriminatory wage differentials can exist, but only if firms refrain from maximizing their profits. 
C) discriminatory wage differentials can exist, but only if government reinforces customers' practices by passing laws that mandate discrimination. 
D) discriminatory wage differentials can exist, even in the absence of discriminatory practices by firms or by government.

Question 17

The primary economic explanation as to why a world-renowned architect cannot attain the "superstar" status that an athlete or actor can attain is that

Accepted Answer

A) architects' services are not as highly valued by society as are the services of athletes and actors. 
B) only physically attractive people can become superstars, and it would be a coincidence if a highly talented architect were also physically attractive. 
C) government regulations place restrictions on the incomes of architects, but there are no such restrictions on the incomes of athletes or actors. 
D) it is impossible, currently, for an architect to supply his or her services at low cost to every customer. 
A) architects' services are not as highly valued by society as are the services of athletes and actors. 
B) only physically attractive people can become superstars, and it would be a coincidence if a highly talented architect were also physically attractive. 
C) government regulations place restrictions on the incomes of architects, but there are no such restrictions on the incomes of athletes or actors. 
D) it is impossible, currently, for an architect to supply his or her services at low cost to every customer.

Question 18

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 19

According to proponents of the signaling theory of education, an increase in the education levels of all workers would

Accepted Answer

A) increase workers' productivity and increase their wages. 
B) increase workers' productivity but leave their wages unaffected. 
C) leave workers' productivity unaffected but increase their wages. 
D) leave workers' productivity and wages unaffected. 
A) increase workers' productivity and increase their wages. 
B) increase workers' productivity but leave their wages unaffected. 
C) leave workers' productivity unaffected but increase their wages. 
D) leave workers' productivity and wages unaffected.

Question 20

A compensating differential is a difference in wages due to higher levels of education or other forms of human capital.

Accepted Answer

A) True 
 B)False

Exam 19: Earnings and Discrimination

The statement that "coal miners are paid more than workers with similar levels of education" is likely to reflect the fact that

One example of labor-market discrimination is that a firm may be less likely to interview a job candidate whose resume clearly indicates he is not a good fit for the job.

Which of the following can be used to help explain wage differences among different groups of workers?

If an employer's behavior is supportive of the theory of efficiency wages, the employer would

In general, the higher a person's education level,

Which of the following is an economic explanation for the "beauty premium"?

Sometimes wages are set above the equilibrium level when

Certain factors that are probably important in determining wages are nevertheless difficult to measure. Consequently, labor economists find those factors difficult to incorporate into their studies of labor markets and wages. Those factors include

The time spent by students in college

Consider two groups of workers of equal skill level and experience: those who collect garbage and those who stuff envelopes with campaign fliers. Which group is likely to be paid more and why?

Other things equal, a particular job will likely pay a higher wage if it involves

Discrimination may persist even in competitive markets when the source of the discrimination is

One reason why better-looking workers may have higher earnings is that physical attractiveness is correlated with intelligence.

In the presence of discrimination by customers,

The primary economic explanation as to why a world-renowned architect cannot attain the "superstar" status that an athlete or actor can attain is that

According to proponents of the signaling theory of education, an increase in the education levels of all workers would

A compensating differential is a difference in wages due to higher levels of education or other forms of human capital.

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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