Question 1

Given a community worker for the Red Cross gets paid less money than a professional soccer player, this means that:

Accepted Answer

A) a soccer player is valued more by society than a community worker 
B) labour markets are generally inefficient and inequitable 
C) a soccer player generates more revenue in the economy than a community worker 
D) none of the above are true 
A) a soccer player is valued more by society than a community worker 
B) labour markets are generally inefficient and inequitable 
C) a soccer player generates more revenue in the economy than a community worker 
D) none of the above are true C

Question 2

Labour unions will generally decrease the quantity of labour demanded.

Accepted Answer

A) True 
 B)False  True

Question 3

What is most likely to cause a decrease in demand for unskilled labour in Australia?

Accepted Answer

A) an increase in productivity gains among the unskilled labourers 
B) an increase in demand for goods produced by unskilled labour 
C) an increase in immigration 
D) an increase in international trade with countries where unskilled labour is more plentiful 
A) an increase in productivity gains among the unskilled labourers 
B) an increase in demand for goods produced by unskilled labour 
C) an increase in immigration 
D) an increase in international trade with countries where unskilled labour is more plentiful D

Question 4

When computers are used to replace workers on a factory production line, the wage gap:

Accepted Answer

A) between skilled and unskilled workers is likely to fall 
B) will rise only if the company can increase the price of its product 
C) between skilled workers and unskilled workers is likely to increase 
D) between skilled workers and unskilled workers will not change 
A) between skilled and unskilled workers is likely to fall 
B) will rise only if the company can increase the price of its product 
C) between skilled workers and unskilled workers is likely to increase 
D) between skilled workers and unskilled workers will not change

Question 5

A compensating differential means that:

Accepted Answer

A) a wage difference arises from different marginal productivities of labour 
B) workers that do similar work should be paid the same wage 
C) a wage difference arises from non-monetary characteristics of different jobs 
D) all of the above 
A) a wage difference arises from different marginal productivities of labour 
B) workers that do similar work should be paid the same wage 
C) a wage difference arises from non-monetary characteristics of different jobs 
D) all of the above

Question 6

In the signalling theory of education, which of the following are considered to be true?

Accepted Answer

A) schooling makes employees less productive 
B) schooling does not affect a worker's productivity 
C) workers signal to the employer that they are valuable employees because they were willing to spend time to get an education 
D) women are less likely to do male-dominated majors like engineering 
A) schooling makes employees less productive 
B) schooling does not affect a worker's productivity 
C) workers signal to the employer that they are valuable employees because they were willing to spend time to get an education 
D) women are less likely to do male-dominated majors like engineering

Question 7

A market where there is a single buyer for a product is called a:

Accepted Answer

A) monopoly 
B) buyer's monopoly 
C) monoposony 
D) bilateral monopoly 
A) monopoly 
B) buyer's monopoly 
C) monoposony 
D) bilateral monopoly

Question 8

Human capital is the accumulation of investments in people.The most important type of human capital is education.

Accepted Answer

A) True 
 B)False

Question 9

The wage differences we observe in the economy are, to a large extent, attributable to:

Accepted Answer

A) inefficient markets 
B) equivalent demand for labour across different jobs held by different groups of people 
C) the determinants of equilibrium wage 
D) constant productivities across different employment groups 
A) inefficient markets 
B) equivalent demand for labour across different jobs held by different groups of people 
C) the determinants of equilibrium wage 
D) constant productivities across different employment groups

Question 10

Which of the following might be added benefits of forcing students to stay in school longer?
(i) a lowering of the opportunity cost of dropping out of school
(ii) a better learning environment in the classroom for those who are compelled to stay in school
(iii) lower crime rates

Accepted Answer

A) (i) only 
B) (iii) only 
C) (ii) and (iii) 
D) (i) and (iii) 
A) (i) only 
B) (iii) only 
C) (ii) and (iii) 
D) (i) and (iii)

Question 11

Which of the following facts are likely to have influenced the declining gender wage gap?

Accepted Answer

A) fertility rates have risen and there is an increasing tendency for mothers with young children to work 
B) fertility rates have risen and there is a decreasing tendency for mothers with young children to work 
C) fertility rates have fallen and there is a decreasing tendency for mothers with young children to work 
D) fertility rates have fallen and there is an increasing tendency for mothers with young children to work 
A) fertility rates have risen and there is an increasing tendency for mothers with young children to work 
B) fertility rates have risen and there is a decreasing tendency for mothers with young children to work 
C) fertility rates have fallen and there is a decreasing tendency for mothers with young children to work 
D) fertility rates have fallen and there is an increasing tendency for mothers with young children to work

Question 12

Differences in wages between highly educated workers and less educated workers are most likely to be considered:

Accepted Answer

A) unfair by all economists 
B) completely fair by everyone 
C) a compensating differential for the cost of becoming educated 
D) a signal that the market is indifferent to a worker's level of human capital 
A) unfair by all economists 
B) completely fair by everyone 
C) a compensating differential for the cost of becoming educated 
D) a signal that the market is indifferent to a worker's level of human capital

Question 13

Human capital is:

Accepted Answer

A) the stock of machines, equipment, and land that is used in production of other goods 
B) the stock of capital in the economy in the possession of humans 
C) the ratio of labour to capital in the economy 
D) the accumulation of investments in people 
A) the stock of machines, equipment, and land that is used in production of other goods 
B) the stock of capital in the economy in the possession of humans 
C) the ratio of labour to capital in the economy 
D) the accumulation of investments in people

Question 14

A plumber who specialises in cleaning plugged sewer lines is typically paid a higher wage than a plumber who works on installing water systems in new residential housing.This is likely to be partly explained by the fact that:

Accepted Answer

A) plumbing jobs involving sewer lines are likely to have an element of personal satisfaction 
B) plumbers who work with sewer lines are more likely to work a standard shift 
C) a plumber who works with clogged sewer lines is likely to be perceived as doing a 'dirty' job 
D) plumbers who work with clogged sewer lines require years of specialised training 
A) plumbing jobs involving sewer lines are likely to have an element of personal satisfaction 
B) plumbers who work with sewer lines are more likely to work a standard shift 
C) a plumber who works with clogged sewer lines is likely to be perceived as doing a 'dirty' job 
D) plumbers who work with clogged sewer lines require years of specialised training

Question 15

People who leave school with no qualifications typically have less human capital than those workers with university qualifications.

Accepted Answer

A) True 
 B)False

Question 16

Business owners who care only about making money are:

Accepted Answer

A) likely to discriminate against certain groups of workers 
B) likely to not discriminate against certain groups of workers 
C) likely to be replaced by discriminating businesses 
D) very interested in the colour of their employees' skin 
A) likely to discriminate against certain groups of workers 
B) likely to not discriminate against certain groups of workers 
C) likely to be replaced by discriminating businesses 
D) very interested in the colour of their employees' skin

Question 17

When workers who work the night shift are paid more than those who do identical work on the day shift, this is referred to as:

Accepted Answer

A) wage inequity 
B) inefficient markets 
C) a compensating differential 
D) discriminatory wage practice 
A) wage inequity 
B) inefficient markets 
C) a compensating differential 
D) discriminatory wage practice

Question 18

Up until the late 1980's, the ratio of earnings of university graduates to the earnings of those who left after secondary school declined.However, during this period equilibrium quantity of employed university graduates also increased.What could explain this outcome?

Accepted Answer

A) demand for university graduates fell while the number of people graduating was stable 
B) demand for university graduates rose while the number of people graduating was stable 
C) supply of university graduates fell while the number of people graduating was stable 
D) both the supply and demand for university graduates rose 
A) demand for university graduates fell while the number of people graduating was stable 
B) demand for university graduates rose while the number of people graduating was stable 
C) supply of university graduates fell while the number of people graduating was stable 
D) both the supply and demand for university graduates rose

Question 19

Suppose John was very skilled at developing film into photos.John however, lacks the skills to process digital photos because he knows little about computers.Most amateur photographers now use digital cameras.This means it is very likely that John's wage will fall because of:

Accepted Answer

A) his natural ability 
B) the poor geographic location of his employment 
C) his poor work effort 
D) a chance event that is making his skills obsolete 
A) his natural ability 
B) the poor geographic location of his employment 
C) his poor work effort 
D) a chance event that is making his skills obsolete

Question 20

Refer to the information provided.Competition in the market for haircuts is consistent with which of the following statements?

Accepted Answer

A) firms hiring non-bald barbers will have a cost advantage, leading to an increase in the demand for non-bald barbers 
B) firms that hire only bald barbers will eventually all go out of business 
C) all firms must eventually end up with some bald and some non-bald barbers 
D) firms hiring bald barbers will enter the market, increasing the demand for bald barbers 
A) firms hiring non-bald barbers will have a cost advantage, leading to an increase in the demand for non-bald barbers 
B) firms that hire only bald barbers will eventually all go out of business 
C) all firms must eventually end up with some bald and some non-bald barbers 
D) firms hiring bald barbers will enter the market, increasing the demand for bald barbers

Exam 20: Earnings, Unions and Discrimination

Given a community worker for the Red Cross gets paid less money than a professional soccer player, this means that:

Labour unions will generally decrease the quantity of labour demanded.

What is most likely to cause a decrease in demand for unskilled labour in Australia?

When computers are used to replace workers on a factory production line, the wage gap:

A compensating differential means that:

In the signalling theory of education, which of the following are considered to be true?

A market where there is a single buyer for a product is called a:

Human capital is the accumulation of investments in people.The most important type of human capital is education.

The wage differences we observe in the economy are, to a large extent, attributable to:

Which of the following might be added benefits of forcing students to stay in school longer? (i) a lowering of the opportunity cost of dropping out of school (ii) a better learning environment in the classroom for those who are compelled to stay in school (iii) lower crime rates

Which of the following facts are likely to have influenced the declining gender wage gap?

Differences in wages between highly educated workers and less educated workers are most likely to be considered:

Human capital is:

A plumber who specialises in cleaning plugged sewer lines is typically paid a higher wage than a plumber who works on installing water systems in new residential housing.This is likely to be partly explained by the fact that:

People who leave school with no qualifications typically have less human capital than those workers with university qualifications.

Business owners who care only about making money are:

When workers who work the night shift are paid more than those who do identical work on the day shift, this is referred to as:

Up until the late 1980's, the ratio of earnings of university graduates to the earnings of those who left after secondary school declined.However, during this period equilibrium quantity of employed university graduates also increased.What could explain this outcome?

Suppose John was very skilled at developing film into photos.John however, lacks the skills to process digital photos because he knows little about computers.Most amateur photographers now use digital cameras.This means it is very likely that John's wage will fall because of:

Refer to the information provided.Competition in the market for haircuts is consistent with which of the following statements?

Ten Lessons From 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

Application: 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

Business Strategy and Oligopoly

Competition Policy

The Markets for the Factors of Production

Income Inequity and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment and the Financial System

The Natural Rate of Unemployment

The Monetary System

Inflation: Its Causes and Costs

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 Trade-Off Between Inflation and Unemployment

Global Financial Crisis of 2008 and Beyond

Five Debates Over Macroeconomic Policy

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