Question 1

Workers who work the night shift are often paid more than those who do identical work on the day shift. This is referred to as a

Accepted Answer

A) discriminatory wage practice. 
B) compensating differential. 
C) wage inequity. 
D) a market inefficiency. 
A) discriminatory wage practice. 
B) compensating differential. 
C) wage inequity. 
D) a market inefficiency.

Question 2

Job A is hard, dull, and dangerous. Job B is easy, fun, and safe. All else equal, we would expect Job A to pay

Accepted Answer

A) higher wages than Job B because the labor supplied for Job B will be greater. 
B) lower wages than Job B because the labor supplied for Job B will be greater. 
C) higher wages than Job B because the labor supplied for Job A will be greater. 
D) lower wages than Job B because the labor supplied for Job A will be greater. 
A) higher wages than Job B because the labor supplied for Job B will be greater. 
B) lower wages than Job B because the labor supplied for Job B will be greater. 
C) higher wages than Job B because the labor supplied for Job A will be greater. 
D) lower wages than Job B because the labor supplied for Job A will be greater.

Question 3

A worker association that bargains with employers over wages and working conditions is called

Accepted Answer

A) a strike. 
B) an oligopoly. 
C) a firm. 
D) a union. 
A) a strike. 
B) an oligopoly. 
C) a firm. 
D) a union.

Question 4

Which of the following might explain the beauty premium found by labor economists Hamermesh and Biddle?

Accepted Answer

A) Good looks are an innate ability for some jobs, which results in higher productivity and higher wages. 
B) Good looks may be an indirect measure of other types of ability such as attention to detail. 
C) If better-looking people earn more than average-looking people, employers may be discriminating based on personal appearance. 
D) All of the above could explain the beauty premium. 
A) Good looks are an innate ability for some jobs, which results in higher productivity and higher wages. 
B) Good looks may be an indirect measure of other types of ability such as attention to detail. 
C) If better-looking people earn more than average-looking people, employers may be discriminating based on personal appearance. 
D) All of the above could explain the beauty premium.

Question 5

When employers pay an efficiency wage above the market equilibrium wage, this will likely result in

Accepted Answer

A) a surplus of labor. 
B) no unemployment. 
C) an increase in the number of people employed. 
D) an decrease in the quantity of labor supplied. 
A) a surplus of labor. 
B) no unemployment. 
C) an increase in the number of people employed. 
D) an decrease in the quantity of labor supplied.

Question 6

The profit motive counteracts

Accepted Answer

A) consumer discrimination. 
B) discrimination in sports. 
C) the beauty premium. 
D) None of the above is correct. 
A) consumer discrimination. 
B) discrimination in sports. 
C) the beauty premium. 
D) None of the above is correct.

Question 7

The Asian Development Bank has been investing in education and training programs in the developing economies of Asia over the last five years. As a result of this investment, economists who adhere to the human capital view of education would predict

Accepted Answer

A) rising wages as labor productivity is enhanced. 
B) falling wages as the labor market is saturated with too many educated workers. 
C) the marginal productivity of capital would not be affected. 
D) the marginal productivity of labor would not be affected. 
A) rising wages as labor productivity is enhanced. 
B) falling wages as the labor market is saturated with too many educated workers. 
C) the marginal productivity of capital would not be affected. 
D) the marginal productivity of labor would not be affected.

Question 8

A study using data from the late 1960s showed that black baseball players earned less than comparable white players. Studies of more recent salaries in baseball, however, have found no evidence of discriminatory wage differentials.

Accepted Answer

A) True 
 B)False

Question 9

Table 19-1   Source: US Census Bureau and Mankiw's calculations
-Refer to Table 19-1. Economists suspect that the increase in the earnings gap between skilled and unskilled workers is likely due to

Accepted Answer

A) an increase in the demand for skilled labor relative to the demand for unskilled labor. 
B) an increase in international trade. 
C) improvements in technology. 
D) All of the above are correct. 
A) an increase in the demand for skilled labor relative to the demand for unskilled labor. 
B) an increase in international trade. 
C) improvements in technology. 
D) All of the above are correct.

Question 10

Philip is an average contractor in town, and he earns $40,000 a year. Billy is the best contractor in town, and he earns $480,000 a year. Philip's contracting services

Accepted Answer

A) are valued more by the market relative to Billy's and that explains why his income is higher than Billy's. 
B) are valued less by the market relative to Billy's and that explains why his income is higher than Billy's. 
C) are valued less by the market relative to Billy's and that explains why his income is lower than Billy's. 
D) are more expensive because he receives a compensating differential. 
A) are valued more by the market relative to Billy's and that explains why his income is higher than Billy's. 
B) are valued less by the market relative to Billy's and that explains why his income is higher than Billy's. 
C) are valued less by the market relative to Billy's and that explains why his income is lower than Billy's. 
D) are more expensive because he receives a compensating differential.

Question 11

Other things the same, we'd expect that a job with less pleasant working conditions pays

Accepted Answer

A) more; this is known as an efficiency wage. 
B) more; this is known as a compensating differential. 
C) less; this is known as an efficiency wage. 
D) less; this is known as a compensating differential. 
A) more; this is known as an efficiency wage. 
B) more; this is known as a compensating differential. 
C) less; this is known as an efficiency wage. 
D) less; this is known as a compensating differential.

Question 12

Discrimination is usually not a profit-maximizing strategy.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is an example of human capital?

Accepted Answer

A) Machines built by people. 
B) Formal education acquired in schools. 
C) On-the-job training. 
D) Both b and c are correct. 
A) Machines built by people. 
B) Formal education acquired in schools. 
C) On-the-job training. 
D) Both b and c are correct.

Question 14

Table 19-1   Source: US Census Bureau and Mankiw's calculations
-Refer to Table 19-1. From 1975 to 2011, the salary gap among women who graduate from college compared to those who complete only high school

Accepted Answer

A) increased by 35% while the salary gap among men increased by 42%. 
B) more than doubled while the salary gap among men rose significantly but less than doubled. 
C) increased, but the salary gap among men decreased. 
D) decreased, but the salary gap among men increased. 
A) increased by 35% while the salary gap among men increased by 42%. 
B) more than doubled while the salary gap among men rose significantly but less than doubled. 
C) increased, but the salary gap among men decreased. 
D) decreased, but the salary gap among men increased.

Question 15

Over the past 30 years, the number of jobs in the United States requiring skilled labor has been declining as foreign countries steal these jobs away from the U.S. As a result, the domestic demand for skilled labor has been falling and the wage gap between skilled and unskilled labor has been narrowing.

Accepted Answer

A) True 
 B)False

Question 16

Jake and Zach are identical twins who attended grammar school through college together. Jake took a job as an engineer who does not have to travel out of the state. Zach took a job as an engineer who must travel out of state once a week. Jake earns $125,000 a year, and Zach earns $155,000 a year. Select the best explanation for this wage difference.

Accepted Answer

A) Zach puts in less effort than Jake. 
B) Zach has less human capital than Jake. 
C) Zach receives a higher wage to compensate for the disagreeable nature of business travel. 
D) Jake's lower salary supports the signaling theory of education. 
A) Zach puts in less effort than Jake. 
B) Zach has less human capital than Jake. 
C) Zach receives a higher wage to compensate for the disagreeable nature of business travel. 
D) Jake's lower salary supports the signaling theory of education.

Question 17

On average, electricians who work on dangerous high-voltage power lines earn more per hour than similarly skilled electricians who don't work on dangerous high-voltage power lines. 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 18

Profit-maximizing, competitive firms will not discriminate in the hiring of workers unless consumers exercise a preference for discrimination in product markets or governments mandate discrimination.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following statements represents the idea behind signaling in education?

Accepted Answer

A) Education can turn an unproductive person into a productive person. 
B) Education increases the marginal productivity of naturally productive workers. 
C) More productive people are more inclined to educate themselves. 
D) All of the above are correct. 
A) Education can turn an unproductive person into a productive person. 
B) Education increases the marginal productivity of naturally productive workers. 
C) More productive people are more inclined to educate themselves. 
D) All of the above are correct.

Question 20

Efficiency wages may decrease employee turnover.

Accepted Answer

A) True 
 B)False

Exam 19: Earnings and Discrimination

Workers who work the night shift are often paid more than those who do identical work on the day shift. This is referred to as a

Job A is hard, dull, and dangerous. Job B is easy, fun, and safe. All else equal, we would expect Job A to pay

A worker association that bargains with employers over wages and working conditions is called

Which of the following might explain the beauty premium found by labor economists Hamermesh and Biddle?

When employers pay an efficiency wage above the market equilibrium wage, this will likely result in

The profit motive counteracts

The Asian Development Bank has been investing in education and training programs in the developing economies of Asia over the last five years. As a result of this investment, economists who adhere to the human capital view of education would predict

A study using data from the late 1960s showed that black baseball players earned less than comparable white players. Studies of more recent salaries in baseball, however, have found no evidence of discriminatory wage differentials.

Table 19-1 Source: US Census Bureau and Mankiw's calculations -Refer to Table 19-1. Economists suspect that the increase in the earnings gap between skilled and unskilled workers is likely due to

Philip is an average contractor in town, and he earns $40,000 a year. Billy is the best contractor in town, and he earns $480,000 a year. Philip's contracting services

Other things the same, we'd expect that a job with less pleasant working conditions pays

Discrimination is usually not a profit-maximizing strategy.

Which of the following is an example of human capital?

Table 19-1 Source: US Census Bureau and Mankiw's calculations -Refer to Table 19-1. From 1975 to 2011, the salary gap among women who graduate from college compared to those who complete only high school

On average, electricians who work on dangerous high-voltage power lines earn more per hour than similarly skilled electricians who don't work on dangerous high-voltage power lines. The difference in pay is attributed to

Profit-maximizing, competitive firms will not discriminate in the hiring of workers unless consumers exercise a preference for discrimination in product markets or governments mandate discrimination.

Which of the following statements represents the idea behind signaling in education?

Efficiency wages may decrease employee turnover.

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

Filters