Question 1

If people with blue eyes earn more than people with brown eyes, we have proof of discrimination against people with brown eyes.

Accepted Answer

A) True 
 B)False

Question 2

Expenditures on human capital

Accepted Answer

A) reflect an expectation of some future return on the investment. 
B) are generally embodied in a specific individual. 
C) reflect an investment of resources today to raise productivity in the future. 
D) All of the above are correct. 
A) reflect an expectation of some future return on the investment. 
B) are generally embodied in a specific individual. 
C) reflect an investment of resources today to raise productivity in the future. 
D) All of the above are correct.

Question 3

Two economists created fake resumes with either common African-American names such as Lakisha and Jamal or common white names such as Emily and Greg. After sending them to potential employers with "Help Wanted" ads in Boston and Chicago newspapers, they found that

Accepted Answer

A) black employees earned 50 percent less than white employees in Chicago but that blacks and whites had similar wages in Boston. 
B) black employees earned 50 percent less than white employees in Boston but that blacks and whites had similar wages in Chicago. 
C) job applicants with white names received 50 percent more phone calls from interested employers. 
D) job applicants with white names received 7 percent more phone calls from interested employers. 
A) black employees earned 50 percent less than white employees in Chicago but that blacks and whites had similar wages in Boston. 
B) black employees earned 50 percent less than white employees in Boston but that blacks and whites had similar wages in Chicago. 
C) job applicants with white names received 50 percent more phone calls from interested employers. 
D) job applicants with white names received 7 percent more phone calls from interested employers.

Question 4

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) all barbershops now earn a normal economic profit. 
B) competition will ensure the difference in wages will persist. 
C) barbershops that hire barbers with hair will be more profitable than those that don't. 
D) barbershops that hire bald barbers will be more profitable than those that don't. 
A) all barbershops now earn a normal economic profit. 
B) competition will ensure the difference in wages will persist. 
C) barbershops that hire barbers with hair will be more profitable than those that don't. 
D) barbershops that hire bald barbers will be more profitable than those that don't.

Question 5

Which of the following is not an example of a compensating differential? Job A pays more than Job B because Job A requires

Accepted Answer

A) more international travel to dangerous locations. 
B) two night shifts per month. 
C) careful handling of toxic chemicals. 
D) an advanced degree. 
A) more international travel to dangerous locations. 
B) two night shifts per month. 
C) careful handling of toxic chemicals. 
D) an advanced degree.

Question 6

The organized withdrawal of labor from a firm by a union is called

Accepted Answer

A) a strike. 
B) a bargain. 
C) a monopoly. 
D) a tournament. 
A) a strike. 
B) a bargain. 
C) a monopoly. 
D) a tournament.

Question 7

Why do major-league baseball players get paid more than minor-league players?

Accepted Answer

A) Major-league players are better athletes. 
B) The higher wage reflects a compensating differential. 
C) Playing in the major leagues in more pleasant then playing in the minor leagues. 
D) The higher wage is often due to educational discrepancies. 
A) Major-league players are better athletes. 
B) The higher wage reflects a compensating differential. 
C) Playing in the major leagues in more pleasant then playing in the minor leagues. 
D) The higher wage is often due to educational discrepancies.

Question 8

According to a study of the "beauty premium," how do the wages of people with average looks compare to those of people considered less attractive than average?

Accepted Answer

5 to 10 pe

Question 9

Public school teachers are known to have low wages. Which of the following would push the teachers' wages lower?

Accepted Answer

A) Public school teacher jobs are difficult. 
B) Public school teachers are required to be college graduates. 
C) Public school teachers belong to a union. 
D) Teaching in a public school has a high element of personal satisfaction. 
A) Public school teacher jobs are difficult. 
B) Public school teachers are required to be college graduates. 
C) Public school teachers belong to a union. 
D) Teaching in a public school has a high element of personal satisfaction.

Question 10

Daryn earns a higher salary than his friend Nick because Daryn is willing to work on the loading dock, whereas Nick prefers to work in an air-conditioned office. The difference in salary could illustrate a compensating differential.

Accepted Answer

A) True 
 B)False

Question 11

If the signaling theory of education is correct,

Accepted Answer

A) education increases productivity and educated workers are paid more. 
B) education increases productivity but educated workers are not paid more. 
C) education does not increase productivity but educated workers earn more. 
D) education does not increase productivity and educated workers do not earn more 
A) education increases productivity and educated workers are paid more. 
B) education increases productivity but educated workers are not paid more. 
C) education does not increase productivity but educated workers earn more. 
D) education does not increase productivity and educated workers do not earn more

Question 12

When comparing average wages for black and white men in the United States, wages paid to black men have been about 20 percent less than those paid to white men.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements is not correct?

Accepted Answer

A) If the signaling theory of education is correct, additional schooling does not affect worker productivity but rather signals a correlation between natural ability and education. 
B) The theory of efficiency wages suggests that firms pay higher wages to workers in order to induce workers to be more productive. 
C) Discrimination against workers of a certain race or ethnicity is often in conflict with a firm's desire to maximize profits. 
D) The theory of compensating wage differentials reflects the different skills, abilities, and productivity of workers. 
A) If the signaling theory of education is correct, additional schooling does not affect worker productivity but rather signals a correlation between natural ability and education. 
B) The theory of efficiency wages suggests that firms pay higher wages to workers in order to induce workers to be more productive. 
C) Discrimination against workers of a certain race or ethnicity is often in conflict with a firm's desire to maximize profits. 
D) The theory of compensating wage differentials reflects the different skills, abilities, and productivity of workers.

Question 14

A consensus view among economists regarding the possibility of labor-market discrimination is that

Accepted Answer

A) most wage differences among groups are attributable to discrimination. 
B) many employers use compensating differentials to hide discriminatory practices. 
C) wage differences among groups are not sufficient by themselves to determine how much discrimination there is. 
D) all wage differences among groups are attributable to differences in human capital and compensating differentials. 
A) most wage differences among groups are attributable to discrimination. 
B) many employers use compensating differentials to hide discriminatory practices. 
C) wage differences among groups are not sufficient by themselves to determine how much discrimination there is. 
D) all wage differences among groups are attributable to differences in human capital and compensating differentials.

Question 15

In the country of Freedonia, men and women have the same level of education and choose different forms of work in the same proportions. The only real difference is that men typically stay home to raise young children, returning to the work force after their children enter elementary school. If no discrimination exists, then we would expect that, on average,

Accepted Answer

A) women would earn less than men. 
B) women would earn more than men. 
C) men and women would earn the same wage. 
D) wage differences between men and women would be due to differences in beauty. 
A) women would earn less than men. 
B) women would earn more than men. 
C) men and women would earn the same wage. 
D) wage differences between men and women would be due to differences in beauty.

Question 16

Which of the following represents an example of labor-market discrimination?

Accepted Answer

A) An employer is more likely to grant an interview to a person graduating from Yale than from the local community college. 
B) An employer is more likely to grant an interview to a person graduating from the local community college than from Yale. 
C) An employer is more likely to grant an interview to a woman with a traditionally "white" name such as Emily than to a woman with a traditionally "black" name such as Lakisha. 
D) An employer is as likely to grant an interview to person with a traditionally "masculine" name such as "Alex" as a person with a traditionally "feminine" name such as "Emily." 
A) An employer is more likely to grant an interview to a person graduating from Yale than from the local community college. 
B) An employer is more likely to grant an interview to a person graduating from the local community college than from Yale. 
C) An employer is more likely to grant an interview to a woman with a traditionally "white" name such as Emily than to a woman with a traditionally "black" name such as Lakisha. 
D) An employer is as likely to grant an interview to person with a traditionally "masculine" name such as "Alex" as a person with a traditionally "feminine" name such as "Emily."

Question 17

Figure 19-2  
-Refer to Figure 19-2. This figure depicts labor demand and supply in a nonunionized labor market. If the minimum wage were $7.50, employment in this market would be

Accepted Answer

A) 400 
B) 500 
C) 600 
D) 700 
A) 400 
B) 500 
C) 600 
D) 700

Question 18

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

Accepted Answer

A) human capital and compensating differentials 
B) human capital but not compensating differentials 
C) compensating differentials but not human capital 
D) neither human capital nor compensating differentials 
A) human capital and compensating differentials 
B) human capital but not compensating differentials 
C) compensating differentials but not human capital 
D) neither human capital nor compensating differentials

Question 19

Chris just completed his college degree from a prestigious university. He did not go to school to become more productive. Rather, he went to school and completed his degree to convey his innate productivity to employers. To which theory of education does he subscribe?

Accepted Answer

The answer of Chris just completed his college degree from...

Question 20

As a result of an increase in the earnings gap between skilled and unskilled jobs, the incentive to get a college education has been declining.

Accepted Answer

A) True 
 B)False

Exam 19: Earnings and Discrimination

If people with blue eyes earn more than people with brown eyes, we have proof of discrimination against people with brown eyes.

Expenditures on human capital

Two economists created fake resumes with either common African-American names such as Lakisha and Jamal or common white names such as Emily and Greg. After sending them to potential employers with "Help Wanted" ads in Boston and Chicago newspapers, they found that

Which of the following is not an example of a compensating differential? Job A pays more than Job B because Job A requires

The organized withdrawal of labor from a firm by a union is called

Why do major-league baseball players get paid more than minor-league players?

According to a study of the "beauty premium," how do the wages of people with average looks compare to those of people considered less attractive than average?

Public school teachers are known to have low wages. Which of the following would push the teachers' wages lower?

Daryn earns a higher salary than his friend Nick because Daryn is willing to work on the loading dock, whereas Nick prefers to work in an air-conditioned office. The difference in salary could illustrate a compensating differential.

If the signaling theory of education is correct,

When comparing average wages for black and white men in the United States, wages paid to black men have been about 20 percent less than those paid to white men.

Which of the following statements is not correct?

A consensus view among economists regarding the possibility of labor-market discrimination is that

Which of the following represents an example of labor-market discrimination?

Figure 19-2 -Refer to Figure 19-2. This figure depicts labor demand and supply in a nonunionized labor market. If the minimum wage were $7.50, employment in this market would be

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

Chris just completed his college degree from a prestigious university. He did not go to school to become more productive. Rather, he went to school and completed his degree to convey his innate productivity to employers. To which theory of education does he subscribe?

As a result of an increase in the earnings gap between skilled and unskilled jobs, the incentive to get a college education has been declining.

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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