Question 1

Compensating differentials are differences in wages related to the characteristics of a job.

Accepted Answer

A) True 
 B)False

Question 2

The human-capital theory explanation for why people invest in education has been challenged by a theory that suggests

Accepted Answer

A) schooling acts only as a signal of ability. 
B) humans cannot be considered "capital." 
C) productivity is not linked to wages. 
D) ability, effort, and chance matter more. 
A) schooling acts only as a signal of ability. 
B) humans cannot be considered "capital." 
C) productivity is not linked to wages. 
D) ability, effort, and chance matter more.

Question 3

Labor unions will raise the quantity of labor demanded.

Accepted Answer

A) True 
 B)False

Question 4

Figure 19-7
​   ​
-Refer to Figure 19-7. Given demand, D1, and supply, S2, how many fewer people are employed if a minimum wage of $8 per hour is imposed on this market as compared to allowing wages to adjust to balance labor demand and labor supply?

Accepted Answer

The answer of Figure 19-7
​   ​
-Refer to Figure...

Question 5

Which theory states that education is correlated with natural ability?

Accepted Answer

The answer of Which theory states that education is correlated...

Question 6

A computer is an example of human capital.

Accepted Answer

A) True 
 B)False

Question 7

According to the signaling view, education

Accepted Answer

A) has no effect on lifetime earnings. 
B) alters work ethic. 
C) enhances productivity. 
D) is an indicator of natural ability. 
A) has no effect on lifetime earnings. 
B) alters work ethic. 
C) enhances productivity. 
D) is an indicator of natural ability.

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

It is illegal in the United States for firms to pay different employees different wages for doing the same job.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Streetcar owners in the early 20th century were against segregation for profit maximizing reasons.

Accepted Answer

A) True 
 B)False

Question 12

Cheryl is a professor at a local university. She hired a student from the university to babysit for her children and paid the student a wage higher than the typical wage paid to babysitters in her area to ensure the babysitter's reliability and that attention is paid to her children. What is the name for this above-equilibrium wage?

Accepted Answer

The answer of Cheryl is a professor at a local...

Question 13

The statement that "the rich get richer, and the poor get poorer" is supported by evidence of an expanding wage gap between high-skill and low-skill workers.

Accepted Answer

A) True 
 B)False

Question 14

Suppose that an employer can hire workers with straight hair and workers with curly hair. Each type of worker has the same productivity. Which of the following is correct if the employer discriminates by hiring only workers with straight hair?

Accepted Answer

A) The employer will be just as efficient as a nondiscriminating employer. 
B) The employer will face higher costs than firms that focus only on maximizing profits. 
C) The employer will immediately go out of business because discrimination is illegal. 
D) The employer will face union strikes. 
A) The employer will be just as efficient as a nondiscriminating employer. 
B) The employer will face higher costs than firms that focus only on maximizing profits. 
C) The employer will immediately go out of business because discrimination is illegal. 
D) The employer will face union strikes.

Question 15

Noah and Alyssa have 130 hours of college credit each from Impressive University. Each has 30 hours of economics. Noah has a bachelor's degree, whereas Alyssa is three credits short of required history classes and therefore does not have a degree. Each of them has one year of experience as a market analyst for ABC Company. Assuming that the history class would not enhance Alyssa's job performance, if Noah earns a higher salary than Alyssa, the ABC Company may subscribe to the

Accepted Answer

A) human-capital theory. 
B) discrimination theory. 
C) compensating differential theory. 
D) signaling theory. 
A) human-capital theory. 
B) discrimination theory. 
C) compensating differential theory. 
D) signaling theory.

Question 16

A group of firms working together and acting as a supplier of a product is called a cartel. A group of employees working together and acting as a single supplier of labor is called a

Accepted Answer

The answer of A group of firms working together and...

Question 17

When the supply of workers is plentiful, one would predict that market wages would be

Accepted Answer

A) determined outside the domain of economic theory. 
B) determined solely by factors that affect demand. 
C) low, other things equal. 
D) high, other things equal. 
A) determined outside the domain of economic theory. 
B) determined solely by factors that affect demand. 
C) low, other things equal. 
D) high, other things equal.

Question 18

If the signaling theory of education is correct,

Accepted Answer

A) workers with more years of formal schooling will earn less than workers with fewer years of formal schooling. 
B) additional years of formal schooling do not increase a worker's productivity. 
C) workers with more years of formal schooling are less likely to be affected by ability, effort, and chance. 
D) men are more likely to earn more than women because men are more likely to have graduated from college. 
A) workers with more years of formal schooling will earn less than workers with fewer years of formal schooling. 
B) additional years of formal schooling do not increase a worker's productivity. 
C) workers with more years of formal schooling are less likely to be affected by ability, effort, and chance. 
D) men are more likely to earn more than women because men are more likely to have graduated from college.

Question 19

Explain the role of job experience in explaining the differences between the average wages of men and women.

Accepted Answer

Women, who have primary responsibility f

Question 20

All differences in wages that are not accounted for by differences in human-capital investment are likely to be a result of discrimination.

Accepted Answer

A) True 
 B)False

Exam 19: Earnings and Discrimination

Compensating differentials are differences in wages related to the characteristics of a job.

The human-capital theory explanation for why people invest in education has been challenged by a theory that suggests

Labor unions will raise the quantity of labor demanded.

Figure 19-7 ​ ​ -Refer to Figure 19-7. Given demand, D1, and supply, S2, how many fewer people are employed if a minimum wage of $8 per hour is imposed on this market as compared to allowing wages to adjust to balance labor demand and labor supply?

Which theory states that education is correlated with natural ability?

A computer is an example of human capital.

According to the signaling view, education

It is illegal in the United States for firms to pay different employees different wages for doing the same job.

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

Streetcar owners in the early 20th century were against segregation for profit maximizing reasons.

The statement that "the rich get richer, and the poor get poorer" is supported by evidence of an expanding wage gap between high-skill and low-skill workers.

Suppose that an employer can hire workers with straight hair and workers with curly hair. Each type of worker has the same productivity. Which of the following is correct if the employer discriminates by hiring only workers with straight hair?

A group of firms working together and acting as a supplier of a product is called a cartel. A group of employees working together and acting as a single supplier of labor is called a

When the supply of workers is plentiful, one would predict that market wages would be

If the signaling theory of education is correct,

Explain the role of job experience in explaining the differences between the average wages of men and women.

All differences in wages that are not accounted for by differences in human-capital investment are likely to be a result of discrimination.

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 Nations 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

Figure 19-7 -Refer to Figure 19-7. Given demand, D1, and supply, S2, how many fewer people are employed if a minimum wage of $8 per hour is imposed on this market as compared to allowing wages to adjust to balance labor demand and labor supply?