Question 1

Which of the following is not considered human capital?

Accepted Answer

A) the golf clubs a professional golfer uses to play golf 
B) the skills a professional golfer has gained by practicing on the driving range 
C) the professional golfer's knowledge of how to play a better game learned from talking with other players 
D) none of the above would be considered human capital 
A) the golf clubs a professional golfer uses to play golf 
B) the skills a professional golfer has gained by practicing on the driving range 
C) the professional golfer's knowledge of how to play a better game learned from talking with other players 
D) none of the above would be considered human capital

Question 2

Which of the following statements does not accurately describe the market for labor?

Accepted Answer

A) The characteristics of workers, such as their education and experience, the characteristics of jobs, such as their pleasantness or unpleasantness, and the presence or absence of discrimination by employers all determine equilibrium wages. 
B) Labor unions, minimum wage laws, and efficiency wages all may increase wages above their equilibrium level. 
C) Firms are willing to pay more for better-educated workers as long as there is an excess supply of this type of worker. 
D) Discrimination by employers against a group of workers may artificially lower wages for that group. 
A) The characteristics of workers, such as their education and experience, the characteristics of jobs, such as their pleasantness or unpleasantness, and the presence or absence of discrimination by employers all determine equilibrium wages. 
B) Labor unions, minimum wage laws, and efficiency wages all may increase wages above their equilibrium level. 
C) Firms are willing to pay more for better-educated workers as long as there is an excess supply of this type of worker. 
D) Discrimination by employers against a group of workers may artificially lower wages for that group.

Question 3

Which of the following statements is not correct?

Accepted Answer

A) If a firm discriminates by paying short workers less than tall workers, the firm may be able to compete in the market if the firm's customers also prefer taller workers to shorter workers. 
B) If the government passes regulations that prevent shorter workers from working in higher paying jobs, taller workers may continue to earn higher wages than shorter workers. 
C) Government regulation that prohibits discrimination is economically necessary because market forces support discrimination. 
D) Competitive markets will eliminate discrimination in wages over time unless customer preferences also reflect discrimination and/or government intervention promotes discrimination. 
A) If a firm discriminates by paying short workers less than tall workers, the firm may be able to compete in the market if the firm's customers also prefer taller workers to shorter workers. 
B) If the government passes regulations that prevent shorter workers from working in higher paying jobs, taller workers may continue to earn higher wages than shorter workers. 
C) Government regulation that prohibits discrimination is economically necessary because market forces support discrimination. 
D) Competitive markets will eliminate discrimination in wages over time unless customer preferences also reflect discrimination and/or government intervention promotes discrimination.

Question 4

Tom and Eric went to trade school at the same time. Each graduated with an associate's degree. They have received similar performance evaluations. Eric's employer is not a good business manager, and the sales manager lost a major deal. Because of the decrease in profits, the employees did not receive raises last year. Tom's employer is a savvy business manager and the sales manager is experienced and works hard. If Tom has higher earnings than Eric, the difference is most likely a function of

Accepted Answer

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

Question 5

Which of the following does not explain the "beauty premium" differences in wages?

Accepted Answer

A) Better-looking people are preferred by customers; thus, employers will pay them higher wages than average-looking people. 
B) Beauty may be an indirect measure of other abilities that employers value. 
C) Average-looking people are preferred by customers; thus, employers will pay them higher wages than better-looking people. 
D) Employers discriminate in favor of better-looking people. 
A) Better-looking people are preferred by customers; thus, employers will pay them higher wages than average-looking people. 
B) Beauty may be an indirect measure of other abilities that employers value. 
C) Average-looking people are preferred by customers; thus, employers will pay them higher wages than better-looking people. 
D) Employers discriminate in favor of better-looking people.

Question 6

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

Accepted Answer

A) man earns more than the median black woman. 
B) woman earns less than the median white woman 
C) man earns less than the median white man. 
D) All of the above are correct. 
A) man earns more than the median black woman. 
B) woman earns less than the median white woman 
C) man earns less than the median white man. 
D) All of the above are correct.

Question 7

If a good is produced with technology that allows the best producer to supply every customer at a low cost and every customer in the market wants to enjoy the good supplied by the best producer, the best producer will be called a

Accepted Answer

The answer of If a good is produced with technology...

Question 8

Scenario 19-4
Assume that the labor market for barbers is competitive and that it is differentiated into two groups: barbers who are bald (or going bald) and those who have a full head of hair. Assume that the barbers in this market have identical hair-cutting ability, regardless of whether they are bald or not. Currently the equilibrium wage in the bald barber market is lower than that in the nonbald market. Further assume that the market for haircuts is competitive.
-Refer to Scenario 19-4. If consumers do not discriminate between bald barbers and barbers with hair, then

Accepted Answer

A) competitive pressure in the market for haircuts will eventually cause the equilibrium wage in both markets to be identical. 
B) the equilibrium wage in the "bald" market will eventually fall. 
C) the equilibrium wage in the "hairy" market will eventually rise. 
D) wages in the market for barbers can never be in equilibrium. 
A) competitive pressure in the market for haircuts will eventually cause the equilibrium wage in both markets to be identical. 
B) the equilibrium wage in the "bald" market will eventually fall. 
C) the equilibrium wage in the "hairy" market will eventually rise. 
D) wages in the market for barbers can never be in equilibrium.

Question 9

The example of segregated streetcars in the southern United States in the early twentieth century is one example of

Accepted Answer

A) racial discrimination by firms, despite government efforts to halt it. 
B) racial discrimination by firms with no government action either to halt it or to support it. 
C) government-mandated racial discrimination. 
D) a failure to find any discrimination where most would expect to find it. 
A) racial discrimination by firms, despite government efforts to halt it. 
B) racial discrimination by firms with no government action either to halt it or to support it. 
C) government-mandated racial discrimination. 
D) a failure to find any discrimination where most would expect to find it.

Question 10

Factory workers who work the day shift earn less per hour than similarly-skilled factory workers who work the night shift. The difference in pay is attributed to

Accepted Answer

A) the marginal product of labor. 
B) the marginal product of capital. 
C) diminishing marginal returns. 
D) a compensating differential. 
A) the marginal product of labor. 
B) the marginal product of capital. 
C) diminishing marginal returns. 
D) a compensating differential.

Question 11

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 male and female tutors, then

Accepted Answer

A) the equilibrium wage for male and female tutors will eventually be identical. 
B) the equilibrium wage for female tutors will eventually fall. 
C) the equilibrium wage for male tutors will eventually rise. 
D) the equilibrium wage for male and female tutors will remain different, even in the long run equilibrium. 
A) the equilibrium wage for male and female tutors will eventually be identical. 
B) the equilibrium wage for female tutors will eventually fall. 
C) the equilibrium wage for male tutors will eventually rise. 
D) the equilibrium wage for male and female tutors will remain different, even in the long run equilibrium.

Question 12

Figure 19-5  
-Refer to Figure 19-5. Given demand for labor, D1, and supply of labor, S1, what are the equilibrium wage and quantity of labor?

Accepted Answer

A) $5 and 250 
B) $6 and 200 
C) $8 and 100 
D) $8 and 400 
A) $5 and 250 
B) $6 and 200 
C) $8 and 100 
D) $8 and 400

Question 13

Most wage differences can be understood while maintaining the assumption of equilibrium in the labor market. We deviate from that assumption, however, when we consider

Accepted Answer

A) the superstar phenomenon. 
B) the theory of efficiency wages. 
C) compensating differentials. 
D) differences in educational attainment. 
A) the superstar phenomenon. 
B) the theory of efficiency wages. 
C) compensating differentials. 
D) differences in educational attainment.

Question 14

Maria has just graduated from Princeton University and has applied for a job at a major bank. The bank decides to offer Maria a job because they perceive her degree from Princeton to be an indication of her high-ability. To which of the following views of education does the bank subscribe?

Accepted Answer

A) signaling 
B) human-capital view 
C) superstar phenomenon 
D) benefits of beauty 
A) signaling 
B) human-capital view 
C) superstar phenomenon 
D) benefits of beauty

Question 15

The changing gap in wages between unskilled and skilled workers is most likely related to a larger increase in demand for unskilled occupations relative to skilled occupations.

Accepted Answer

A) True 
 B)False

Question 16

Scenario 19-3
In the small town of Hamilton, Montana, there is a local hardware store called Eddy's Hardware. There are only two types of workers who apply for jobs at Eddy's Hardware: cowboys and farm boys. Local politicians have received numerous complaints that Eddy's Hardware is practicing wage discrimination against farm boys. Eddy's Hardware denies the complaint and says the store is only trying to maximize profit.
-Refer to Scenario 19-3. Which of the following statements would weaken the discrimination complaint against Eddy's Hardware?

Accepted Answer

A) Farm boys are more productive than cowboys. 
B) Farm boys work longer hours than cowboys and their effort is greater. 
C) Farm boys are generally less educated than cowboys in the field of hardware. 
D) All of the above would weaken the discrimination complaint. 
A) Farm boys are more productive than cowboys. 
B) Farm boys work longer hours than cowboys and their effort is greater. 
C) Farm boys are generally less educated than cowboys in the field of hardware. 
D) All of the above would weaken the discrimination complaint.

Question 17

Which of the following is not an explanation for why better educated workers earn more, on average, than less educated workers?

Accepted Answer

A) The higher wages may be a compensating differential for the cost of acquiring the education. 
B) Workers with a college degree signal their higher abilities to potential employers. 
C) Skilled labor is increasingly becoming a substitute for unskilled labor, which raises the earnings of workers with more education. 
D) Better educated workers are more productive, on average. 
A) The higher wages may be a compensating differential for the cost of acquiring the education. 
B) Workers with a college degree signal their higher abilities to potential employers. 
C) Skilled labor is increasingly becoming a substitute for unskilled labor, which raises the earnings of workers with more education. 
D) Better educated workers are more productive, on average.

Question 18

Figure 19-6  
-Refer to Figure 19-6. Given demand, D1, and supply, S1, how many workers are unemployed if a minimum wage of $8 per hour is imposed on this market?

Accepted Answer

The answer of Figure 19-6  
-Refer to Figure 19-6....

Question 19

Which of the following variables related to a worker's wage are the most difficult to measure?

Accepted Answer

A) ability, effort, and chance 
B) job characteristics, gender, and race 
C) gender, race, and geographic location 
D) years of schooling, age, and years of experience 
A) ability, effort, and chance 
B) job characteristics, gender, and race 
C) gender, race, and geographic location 
D) years of schooling, age, and years of experience

Question 20

Table 19-2   Source: US Census Bureau and Mankiw's calculations
-Refer to Table 19-2. What conclusion can you draw about the changes in the gaps in earnings between skilled and unskilled workers between 1975 and 2011?

Accepted Answer

The gap ha

Exam 19: Earnings and Discrimination

Which of the following is not considered human capital?

Which of the following statements does not accurately describe the market for labor?

Which of the following statements is not correct?

Which of the following does not explain the "beauty premium" differences in wages?

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

If a good is produced with technology that allows the best producer to supply every customer at a low cost and every customer in the market wants to enjoy the good supplied by the best producer, the best producer will be called a

The example of segregated streetcars in the southern United States in the early twentieth century is one example of

Factory workers who work the day shift earn less per hour than similarly-skilled factory workers who work the night shift. The difference in pay is attributed to

Figure 19-5 -Refer to Figure 19-5. Given demand for labor, D1, and supply of labor, S1, what are the equilibrium wage and quantity of labor?

Most wage differences can be understood while maintaining the assumption of equilibrium in the labor market. We deviate from that assumption, however, when we consider

Maria has just graduated from Princeton University and has applied for a job at a major bank. The bank decides to offer Maria a job because they perceive her degree from Princeton to be an indication of her high-ability. To which of the following views of education does the bank subscribe?

The changing gap in wages between unskilled and skilled workers is most likely related to a larger increase in demand for unskilled occupations relative to skilled occupations.

Which of the following is not an explanation for why better educated workers earn more, on average, than less educated workers?

Figure 19-6 -Refer to Figure 19-6. Given demand, D1, and supply, S1, how many workers are unemployed if a minimum wage of $8 per hour is imposed on this market?

Which of the following variables related to a worker's wage are the most difficult to measure?

Table 19-2 Source: US Census Bureau and Mankiw's calculations -Refer to Table 19-2. What conclusion can you draw about the changes in the gaps in earnings between skilled and unskilled workers between 1975 and 2011?

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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