Question 1

The process through which unions and firms agree to the terms of employment is known as:

Accepted Answer

A) union market power 
B) imperfect negotiation 
C) collective bargaining 
D) union extortion 
A) union market power 
B) imperfect negotiation 
C) collective bargaining 
D) union extortion

Question 2

If education is a signalling device for high ability, employers will offer higher wages to educated workers.

Accepted Answer

A) True 
 B)False

Question 3

Advocates of comparable worth claim that:

Accepted Answer

A) men are typically paid less than women for identical work 
B) the existence of a gender gap in wage rates is evidence of discrimination 
C) occupations are not gender specific 
D) all of the above are true 
A) men are typically paid less than women for identical work 
B) the existence of a gender gap in wage rates is evidence of discrimination 
C) occupations are not gender specific 
D) all of the above are true

Question 4

One of the problems in calculating the true amount of discrimination that takes place in the market for labour is:

Accepted Answer

A) the difficulty in measuring productivity differences between workers 
B) the inability to calculate wage differentials 
C) the inability to see changes in the wage differentials over a period of time 
D) inadequate reporting of discrimination 
A) the difficulty in measuring productivity differences between workers 
B) the inability to calculate wage differentials 
C) the inability to see changes in the wage differentials over a period of time 
D) inadequate reporting of discrimination

Question 5

Under the 'signalling view' of education, obtaining a university degree communicates valuable information to employers because:

Accepted Answer

A) it is easier for high-ability people to get a degree than low ability people, so more high-ability people get degrees 
B) the high cost of education signals the employee's desire and commitment to an industry 
C) the high level of work needed to obtain a university education is a signal of effort 
D) the skills and knowledge leant at university increases an employee's marginal product 
A) it is easier for high-ability people to get a degree than low ability people, so more high-ability people get degrees 
B) the high cost of education signals the employee's desire and commitment to an industry 
C) the high level of work needed to obtain a university education is a signal of effort 
D) the skills and knowledge leant at university increases an employee's marginal product

Question 6

Superstars are able to earn very high incomes.Superstars arise in markets where customers want to enjoy the good supplied by the best producer, and the good can be supplied to many customers at a low cost.

Accepted Answer

A) True 
 B)False

Question 7

Which product market structure will unions most effectively be able to negotiate higher wages?

Accepted Answer

A) competitive 
B) monopolistically competitive 
C) oligopoly 
D) monopoly 
A) competitive 
B) monopolistically competitive 
C) oligopoly 
D) monopoly

Question 8

Identify the statement below that would be an investment in human capital?

Accepted Answer

A) a new fishing boat that can carry more crew 
B) a university degree 
C) the purchase of a larger trawling net to enhance labour productivity 
D) all of the above 
A) a new fishing boat that can carry more crew 
B) a university degree 
C) the purchase of a larger trawling net to enhance labour productivity 
D) all of the above

Question 9

On the basis of knowledge obtained in his economics class, Ferris is likely to conclude that:

Accepted Answer

A) the job in Africa is likely to have a large amount of job satisfaction, so the large pool of applicants will likely lead to a low wage 
B) the job cleaning motel rooms is likely to be disagreeable, so a small pool of applicants for the job will likely lead to a higher wage 
C) the job that requires the most experience will likely have a higher wage 
D) all of the above are true 
A) the job in Africa is likely to have a large amount of job satisfaction, so the large pool of applicants will likely lead to a low wage 
B) the job cleaning motel rooms is likely to be disagreeable, so a small pool of applicants for the job will likely lead to a higher wage 
C) the job that requires the most experience will likely have a higher wage 
D) all of the above are true

Question 10

Explain the role consumers play in perpetuating discrimination in labour markets.

Accepted Answer

Consumers are able to exercise their bia

Question 11

Which of the following theories would suggest that attending school does not improve productivity, but that high-ability people are more likely to stay in school?

Accepted Answer

A) human capital theory 
B) signalling theory 
C) the theory of compensating differential 
D) the efficient market hypothesis 
A) human capital theory 
B) signalling theory 
C) the theory of compensating differential 
D) the efficient market hypothesis

Question 12

Suppose the apple pickers of Australia successfully form a union with 100% membership and negotiate a wage rise of 20%.If the market demand for apple pickers is downward sloping this will result in:

Accepted Answer

A) greater employment in the apple picking industry 
B) no change in employment in the apple picking industry 
C) a shift in the supply curve of apple pickers 
D) the price of apples to fall 
A) greater employment in the apple picking industry 
B) no change in employment in the apple picking industry 
C) a shift in the supply curve of apple pickers 
D) the price of apples to fall

Question 13

Human capital raises the wages of individuals because:

Accepted Answer

A) it raises the value of the marginal product of labour 
B) highly educated workers need to be compensated for the costs of their education 
C) highly educated workers are more deserving than those with low education 
D) it raises the marginal revenue of production, leading to higher prices and wages 
A) it raises the value of the marginal product of labour 
B) highly educated workers need to be compensated for the costs of their education 
C) highly educated workers are more deserving than those with low education 
D) it raises the marginal revenue of production, leading to higher prices and wages

Question 14

Refer to the information provided.If consumers do not discriminate between bald barbers and barbers with hair, then:

Accepted Answer

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

Question 15

Economists generally agree that:

Accepted Answer

A) differences in average wages do not by themselves provide conclusive evidence about the magnitude of discrimination effects in labour markets 
B) discrimination is exclusively an economic, rather than political, phenomenon 
C) human capital theory provides the best explanation of discriminatory practices 
D) much of the wage differential observed in the economy is due to discrimination 
A) differences in average wages do not by themselves provide conclusive evidence about the magnitude of discrimination effects in labour markets 
B) discrimination is exclusively an economic, rather than political, phenomenon 
C) human capital theory provides the best explanation of discriminatory practices 
D) much of the wage differential observed in the economy is due to discrimination

Question 16

Consumers are often a primary source of discrimination in labour markets.

Accepted Answer

A) True 
 B)False

Question 17

A recent study of the determinants of wages for clerical staff at a university found that years of schooling, years of experience, age and job characteristics only explained about one half of the difference in wages.Describe other factors that may be important in explaining wage differences for clerical staff.In your answer, explain how you would measure these factors for use in empirical analysis.

Accepted Answer

Others may include gender, job tenure, j

Question 18

Wage differentials are often caused by differences in education, experience and the willingness to take on dangerous or unpleasant tasks by workers.

Accepted Answer

A) True 
 B)False

Question 19

If empirical tests of the human capital theory find conclusive evidence that education enhances productivity, then optimal public policy would suggest that:

Accepted Answer

A) everyone should be required to finish high school 
B) compulsory schooling laws always increase social wellbeing 
C) the benefits of increased productivity need to be weighted against the opportunity cost of education 
D) a university education should be required of all members of society 
A) everyone should be required to finish high school 
B) compulsory schooling laws always increase social wellbeing 
C) the benefits of increased productivity need to be weighted against the opportunity cost of education 
D) a university education should be required of all members of society

Question 20

The wage differential between educated workers and uneducated workers in developing economies is typically:

Accepted Answer

A) unrelated to marginal productivity 
B) larger than that which exists in developed economies 
C) smaller than that which exists in developed economies 
D) difficult to measure 
A) unrelated to marginal productivity 
B) larger than that which exists in developed economies 
C) smaller than that which exists in developed economies 
D) difficult to measure

Exam 20: Earnings, Unions and Discrimination

The process through which unions and firms agree to the terms of employment is known as:

If education is a signalling device for high ability, employers will offer higher wages to educated workers.

Advocates of comparable worth claim that:

One of the problems in calculating the true amount of discrimination that takes place in the market for labour is:

Under the 'signalling view' of education, obtaining a university degree communicates valuable information to employers because:

Superstars are able to earn very high incomes.Superstars arise in markets where customers want to enjoy the good supplied by the best producer, and the good can be supplied to many customers at a low cost.

Which product market structure will unions most effectively be able to negotiate higher wages?

Identify the statement below that would be an investment in human capital?

On the basis of knowledge obtained in his economics class, Ferris is likely to conclude that:

Explain the role consumers play in perpetuating discrimination in labour markets.

Which of the following theories would suggest that attending school does not improve productivity, but that high-ability people are more likely to stay in school?

Suppose the apple pickers of Australia successfully form a union with 100% membership and negotiate a wage rise of 20%.If the market demand for apple pickers is downward sloping this will result in:

Human capital raises the wages of individuals because:

Refer to the information provided.If consumers do not discriminate between bald barbers and barbers with hair, then:

Economists generally agree that:

Consumers are often a primary source of discrimination in labour markets.

Wage differentials are often caused by differences in education, experience and the willingness to take on dangerous or unpleasant tasks by workers.

If empirical tests of the human capital theory find conclusive evidence that education enhances productivity, then optimal public policy would suggest that:

The wage differential between educated workers and uneducated workers in developing economies is typically:

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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