Question 1

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 2

Which of the following is the most important contributor to human capital?

Accepted Answer

A) education 
B) effort 
C) chance 
D) physical strength 
A) education 
B) effort 
C) chance 
D) physical strength

Question 3

Economists argue competitive markets provide a "natural remedy" to discriminatory wage practices. Which of the following is widely recognized as a potential limit to the effectiveness of that natural remedy?

Accepted Answer

A) Some workers are members in unions. 
B) Some firms pay efficiency wages; others do not. 
C) Some customers are discriminatory in their buying habits. 
D) Some employees have accumulated more human capital than other employees. 
A) Some workers are members in unions. 
B) Some firms pay efficiency wages; others do not. 
C) Some customers are discriminatory in their buying habits. 
D) Some employees have accumulated more human capital than other employees.

Question 4

In 1913, the Ford Motor Company decided to pay its employees $5 a day. This wage was significantly higher than what any other organization offered. Henry Ford believed that this wage would make his employees happier, increase their productivity, and lower employee turnover. Economists would say that Mr. Ford offered his employees

Accepted Answer

A) a union. 
B) an efficiency wage. 
C) a diminishing rate of marginal return. 
D) a leisure wage. 
A) a union. 
B) an efficiency wage. 
C) a diminishing rate of marginal return. 
D) a leisure wage.

Question 5

Many studies of wage discrimination have been conducted on professional sports teams. This industry is easier to study than others because the professional teams have many objective measures of

Accepted Answer

The answer of Many studies of wage discrimination have been...

Question 6

Scenario 19-5
Jason works part-time at a grocery store after school. Jason has worked at the store for two years but still hasn't received a wage increase, even though newer employees have received raises. Jason has threatened his employer with a lawsuit if he doesn't get a raise in the next few weeks. Jason believes he is a victim of labor-market discrimination.
-Refer to Scenario 19-5. Why might an economist be skeptical of Jason's discrimination complaint?

Accepted Answer

A) Through antitrust laws, discriminating firms can be penalized with large fees. 
B) Differences in wages alone do not by themself prove discrimination. 
C) Discrimination leads to profit maximization. 
D) Even if customers dislike Jason because he's not helpful, if the store operates in a competitive market the store will pay Jason the same as other workers. 
A) Through antitrust laws, discriminating firms can be penalized with large fees. 
B) Differences in wages alone do not by themself prove discrimination. 
C) Discrimination leads to profit maximization. 
D) Even if customers dislike Jason because he's not helpful, if the store operates in a competitive market the store will pay Jason the same as other workers.

Question 7

Economists generally agree that

Accepted Answer

A) human capital theory provides the best explanation of discriminatory practices. 
B) differences in average wages do not by themselves provide conclusive evidence about the magnitude of discrimination in labor markets. 
C) discrimination is exclusively an economic, rather than political, phenomenon. 
D) most of the wage differentials observed in the U.S. economy are due to discrimination. 
A) human capital theory provides the best explanation of discriminatory practices. 
B) differences in average wages do not by themselves provide conclusive evidence about the magnitude of discrimination in labor markets. 
C) discrimination is exclusively an economic, rather than political, phenomenon. 
D) most of the wage differentials observed in the U.S. economy are due to discrimination.

Question 8

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 9

A natural correction to employer discrimination in market economies is the

Accepted Answer

A) threat of judicial review. 
B) profit motive. 
C) political process. 
D) union movement. 
A) threat of judicial review. 
B) profit motive. 
C) political process. 
D) union movement.

Question 10

Efficiency wages will raise the quantity of labor supplied to the market.

Accepted Answer

A) True 
 B)False

Question 11

Scenario 19-6
Suppose that in the competitive market for auto repair, firms prefer to hire men rather than women. Assume that the women applying for positions have the same skills, experience, and work ethic as the men. As a result of this discrimination, the demand for women is lower than it otherwise would be.
-Refer to Scenario 19-6. What conclusion can you draw about women's wages compared to men's wages in this industry?

Accepted Answer

Women will

Question 12

People are willing to invest in human capital because

Accepted Answer

A) the demand for skilled labor is higher than for unskilled labor. 
B) it increases the marginal product of their labor. 
C) firms are willing to pay more for more productive workers. 
D) All of the above are correct. 
A) the demand for skilled labor is higher than for unskilled labor. 
B) it increases the marginal product of their labor. 
C) firms are willing to pay more for more productive workers. 
D) All of the above are correct.

Question 13

Which of the following is an example of labor-market discrimination? You may assume that worker A and worker B have identical characteristics except for the ones listed. A firm offers a higher salary to worker A than worker B because worker A

Accepted Answer

A) has more education. 
B) is willing to work the night shift. 
C) is a man, whereas worker B is a woman. 
D) has better performance reviews, indicating higher productivity. 
A) has more education. 
B) is willing to work the night shift. 
C) is a man, whereas worker B is a woman. 
D) has better performance reviews, indicating higher productivity.

Question 14

Jay was just drafted by a professional baseball team, and was offered a record-breaking contract because of his potential. This is an example of

Accepted Answer

A) a human capital differential. 
B) a compensating differential. 
C) signaling theory. 
D) the superstar phenomenon. 
A) a human capital differential. 
B) a compensating differential. 
C) signaling theory. 
D) the superstar phenomenon.

Question 15

A compensating differential refers to a difference in wages that arises from nonmonetary characteristics.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) 500 
B) 600 
C) 700 
D) 800 
A) 500 
B) 600 
C) 700 
D) 800

Question 17

Callie has just graduated from Hairs-R-Us Beauty School with a license to cut hair. She can earn $15 an hour styling hair at the local hair salon or $20 an hour styling hair at the local funeral home. The higher wage offered by the funeral home is an example of

Accepted Answer

A) a human capital differential. 
B) a compensating differential. 
C) signaling theory. 
D) the superstar phenomenon. 
A) a human capital differential. 
B) a compensating differential. 
C) signaling theory. 
D) the superstar phenomenon.

Question 18

It is argued that competitive markets provide a "natural remedy" to discriminatory wage practices. Which of the following is widely recognized as a potential limit to the potency of that natural remedy?

Accepted Answer

A) Governments sometimes mandate discriminatory practices. 
B) Some employees have a lot of job experience; others have little job experience. 
C) In a discriminatory environment, a competitive firm that takes prices and wages as given has nothing to gain from any particular choice it makes regarding who to hire or which customers to serve. 
D) Not all firms exhibit social responsibility in sufficient measure to counter discriminatory wage practices. 
A) Governments sometimes mandate discriminatory practices. 
B) Some employees have a lot of job experience; others have little job experience. 
C) In a discriminatory environment, a competitive firm that takes prices and wages as given has nothing to gain from any particular choice it makes regarding who to hire or which customers to serve. 
D) Not all firms exhibit social responsibility in sufficient measure to counter discriminatory wage practices.

Question 19

Scenario 19-1
Ferris B., 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 lifeguards to patrol the beach at an exclusive island resort in the Caribbean. Recruiter B is looking for workers to staff positions at a summer youth camp.
-Refer to Scenario 19-1. Ferris is carefully considering the options that each recruiter presents. On the basis of knowledge obtained in his economics class, Ferris concludes that

Accepted Answer

A) the lifeguard job will be more fun than the summer camp job, so the wage for that job will be higher than otherwise. 
B) if the summer camp job doesn't require any special skills, the wage for that job will be lower than otherwise. 
C) since the summer camp job requires some night shift work, the wage for that job will be lower than otherwise. 
D) All of the above are correct. 
A) the lifeguard job will be more fun than the summer camp job, so the wage for that job will be higher than otherwise. 
B) if the summer camp job doesn't require any special skills, the wage for that job will be lower than otherwise. 
C) since the summer camp job requires some night shift work, the wage for that job will be lower than otherwise. 
D) All of the above are correct.

Question 20

The theory of education that states firms use educational attainment as a way of sorting between high-ability and low-ability workers is called

Accepted Answer

The answer of The theory of education that states firms...

Exam 19: Earnings and Discrimination

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?

Which of the following is the most important contributor to human capital?

Economists argue competitive markets provide a "natural remedy" to discriminatory wage practices. Which of the following is widely recognized as a potential limit to the effectiveness of that natural remedy?

Many studies of wage discrimination have been conducted on professional sports teams. This industry is easier to study than others because the professional teams have many objective measures of

Economists generally agree that

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.

A natural correction to employer discrimination in market economies is the

Efficiency wages will raise the quantity of labor supplied to the market.

People are willing to invest in human capital because

Which of the following is an example of labor-market discrimination? You may assume that worker A and worker B have identical characteristics except for the ones listed. A firm offers a higher salary to worker A than worker B because worker A

Jay was just drafted by a professional baseball team, and was offered a record-breaking contract because of his potential. This is an example of

A compensating differential refers to a difference in wages that arises from nonmonetary characteristics.

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

Callie has just graduated from Hairs-R-Us Beauty School with a license to cut hair. She can earn $15 an hour styling hair at the local hair salon or $20 an hour styling hair at the local funeral home. The higher wage offered by the funeral home is an example of

It is argued that competitive markets provide a "natural remedy" to discriminatory wage practices. Which of the following is widely recognized as a potential limit to the potency of that natural remedy?

The theory of education that states firms use educational attainment as a way of sorting between high-ability and low-ability workers is called

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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