Question 1

According to evidence provided by the U.S.government,the median black

Accepted Answer

A)  man earns more than the median black woman. 
B)  woman earns less than the median white woman 
C)  man earns less than the median white man. 
D)  All of the above are correct. 
A)  man earns more than the median black woman. 
B)  woman earns less than the median white woman 
C)  man earns less than the median white man. 
D)  All of the above are correct.

Question 2

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 3

In the United States,the earnings gap between workers with college degrees and workers with high school degrees

Accepted Answer

A)  has never been documented by reliable evidence. 
B)  is evident, but it has remained roughly constant over the past several years. 
C)  is evident, but it has diminished over the last several years. 
D)  is evident, and it has widened over the last several years. 
A)  has never been documented by reliable evidence. 
B)  is evident, but it has remained roughly constant over the past several years. 
C)  is evident, but it has diminished over the last several years. 
D)  is evident, and it has widened over the last several years.

Question 4

Evidence of discrimination is most apparent when one compares wages among broad groups.

Accepted Answer

A) True 
 B)False

Question 5

A compensating differential refers to differences in

Accepted Answer

A)  human capital levels of workers. 
B)  signaling differences of workers. 
C)  nonmonetary characteristics of jobs. 
D)  All of the above are correct. 
A)  human capital levels of workers. 
B)  signaling differences of workers. 
C)  nonmonetary characteristics of jobs. 
D)  All of the above are correct.

Question 6

Differences in human capital among groups of workers is possibly a reflection of past discrimination.

Accepted Answer

A) True 
 B)False

Question 7

The signaling theory of education is most similar to the

Accepted Answer

A)  human capital theory of education. 
B)  discrimination theory of advertising. 
C)  signaling theory of advertising. 
D)  efficiency wage theory of labor economics. 
A)  human capital theory of education. 
B)  discrimination theory of advertising. 
C)  signaling theory of advertising. 
D)  efficiency wage theory of labor economics.

Question 8

Which of the following is the most likely outcome of minimum wage laws?

Accepted Answer

A)  an increase in both the quantity of labor supplied by workers and the quantity of labor demanded by firms 
B)  an increase in the quantity of labor supplied by workers and a decrease in the quantity of labor demanded by firms 
C)  a decrease in the quantity of labor supplied by workers and an increase in the quantity of labor demanded by firms 
D)  a decrease in both the quantity of labor supplied by workers and the quantity of labor demanded by firms 
A)  an increase in both the quantity of labor supplied by workers and the quantity of labor demanded by firms 
B)  an increase in the quantity of labor supplied by workers and a decrease in the quantity of labor demanded by firms 
C)  a decrease in the quantity of labor supplied by workers and an increase in the quantity of labor demanded by firms 
D)  a decrease in both the quantity of labor supplied by workers and the quantity of labor demanded by firms

Question 9

Studies have shown that union workers earn about

Accepted Answer

A)  10 to 20 percent more than nonunion workers in similar jobs. 
B)  10 to 20 percent less than nonunion workers in similar jobs. 
C)  40 to 50 percent more than nonunion workers in similar jobs. 
D)  40 to 50 percent less than nonunion workers in similar jobs. 
A)  10 to 20 percent more than nonunion workers in similar jobs. 
B)  10 to 20 percent less than nonunion workers in similar jobs. 
C)  40 to 50 percent more than nonunion workers in similar jobs. 
D)  40 to 50 percent less than nonunion workers in similar jobs.

Question 10

Other things equal,one would predict that market wages would be relatively high when

Accepted Answer

A)  the supply of labor is high. 
B)  the demand for labor is low. 
C)  the supply of labor is low. 
D)  Both (a.) and (b.) are correct 
A)  the supply of labor is high. 
B)  the demand for labor is low. 
C)  the supply of labor is low. 
D)  Both (a.) and (b.) are correct

Question 11

Jobs that involve pleasant work,as opposed to jobs that involve unpleasant work,usually pay

Accepted Answer

A)  higher wages, because jobs that involve pleasant work typically require more education than do jobs that involve unpleasant work. 
B)  higher wages, because jobs that involve pleasant work typically require more well-developed personality skills than do jobs that involve unpleasant work. 
C)  lower wages, because workers typically are not attracted to jobs that involve unpleasant work unless there is a monetary inducement. 
D)  lower wages, because workers who take jobs that involve unpleasant work typically stay in those jobs for relatively long periods of time and accumulate significant experience. 
A)  higher wages, because jobs that involve pleasant work typically require more education than do jobs that involve unpleasant work. 
B)  higher wages, because jobs that involve pleasant work typically require more well-developed personality skills than do jobs that involve unpleasant work. 
C)  lower wages, because workers typically are not attracted to jobs that involve unpleasant work unless there is a monetary inducement. 
D)  lower wages, because workers who take jobs that involve unpleasant work typically stay in those jobs for relatively long periods of time and accumulate significant experience.

Question 12

The human-capital theory of education maintains that workers who complete specific levels of education enhance their productivity through education.

Accepted Answer

A) True 
 B)False

Question 13

The "beauty premium" can be explained by the fact that

Accepted Answer

A)  marginal productivity in all occupations has a physical dimension. 
B)  in some occupations, physical attractiveness of workers may enhance the value of their marginal product. 
C)  beauty acts as an implicit signal of innate intelligence. 
D)  beautiful people are likely to reflect "good breeding." 
A)  marginal productivity in all occupations has a physical dimension. 
B)  in some occupations, physical attractiveness of workers may enhance the value of their marginal product. 
C)  beauty acts as an implicit signal of innate intelligence. 
D)  beautiful people are likely to reflect "good breeding."

Question 14

Which of the following statements is not correct?

Accepted Answer

A)  If a firm discriminates by paying short workers less than tall workers, the firm may be able to compete in the market if the firm's customers also prefer taller workers to shorter workers. 
B)  If the government passes regulations that prevent shorter workers from working in higher paying jobs, taller workers may continue to earn higher wages than shorter workers. 
C)  Government regulation that prohibits discrimination is economically necessary because market forces support discrimination. 
D)  Competitive markets will eliminate discrimination in wages over time unless customer preferences also reflect discrimination and/or government intervention promotes discrimination. 
A)  If a firm discriminates by paying short workers less than tall workers, the firm may be able to compete in the market if the firm's customers also prefer taller workers to shorter workers. 
B)  If the government passes regulations that prevent shorter workers from working in higher paying jobs, taller workers may continue to earn higher wages than shorter workers. 
C)  Government regulation that prohibits discrimination is economically necessary because market forces support discrimination. 
D)  Competitive markets will eliminate discrimination in wages over time unless customer preferences also reflect discrimination and/or government intervention promotes discrimination.

Question 15

Some discriminatory hiring practices can be expected,even if markets are competitive,as a result of

Accepted Answer

A)  unrestricted entry and exit in markets. 
B)  lower costs of hiring. 
C)  a perfectly elastic market demand. 
D)  customer preferences. 
A)  unrestricted entry and exit in markets. 
B)  lower costs of hiring. 
C)  a perfectly elastic market demand. 
D)  customer preferences.

Question 16

Which theory would support the idea that education does not enhance productivity and therefore raising all workers' educational levels would not affect wages?

Accepted Answer

A)  signaling theory 
B)  human-capital theory 
C)  physical-capital theory 
D)  the efficient-market hypothesis 
A)  signaling theory 
B)  human-capital theory 
C)  physical-capital theory 
D)  the efficient-market hypothesis

Question 17

The case study of segregated street cars in southern cities illustrates which of the following?

Accepted Answer

A)  Racial discrimination in the seating areas was an important catalyst in the Civil Rights movement. 
B)  Segregation laws were supported by local business owners as well as patrons. 
C)  Firms usually care more about maximizing profits than discriminating against certain customers. 
D)  Racial discrimination was a precursor to gender discrimination. 
A)  Racial discrimination in the seating areas was an important catalyst in the Civil Rights movement. 
B)  Segregation laws were supported by local business owners as well as patrons. 
C)  Firms usually care more about maximizing profits than discriminating against certain customers. 
D)  Racial discrimination was a precursor to gender discrimination.

Question 18

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 19

The theory of efficiency wages asserts that

Accepted Answer

A)  unions are often successful in forcing employers to pay higher wages. 
B)  employers strive to hold wages below equilibrium levels. 
C)  employers may find it profitable to pay above-equilibrium wages. 
D)  efficient workers actually earn lower wages than those earned by inefficient workers. 
A)  unions are often successful in forcing employers to pay higher wages. 
B)  employers strive to hold wages below equilibrium levels. 
C)  employers may find it profitable to pay above-equilibrium wages. 
D)  efficient workers actually earn lower wages than those earned by inefficient workers.

Question 20

Human capital is

Accepted Answer

A)  an important determinant of wages, but it does not affect the production of goods and services. 
B)  an important determinant of wages, and it affects the production of goods and services. 
C)  a specific type of physical capital made by humans rather than machines. 
D)  very different from physical capital in that physical capital represents an investment, while human capital does not represent an investment. 
A)  an important determinant of wages, but it does not affect the production of goods and services. 
B)  an important determinant of wages, and it affects the production of goods and services. 
C)  a specific type of physical capital made by humans rather than machines. 
D)  very different from physical capital in that physical capital represents an investment, while human capital does not represent an investment.

Exam 19: Earnings and Discrimination.

According to evidence provided by the U.S.government,the median black

Which of the following statements is not correct?

In the United States,the earnings gap between workers with college degrees and workers with high school degrees

Evidence of discrimination is most apparent when one compares wages among broad groups.

A compensating differential refers to differences in

Differences in human capital among groups of workers is possibly a reflection of past discrimination.

The signaling theory of education is most similar to the

Which of the following is the most likely outcome of minimum wage laws?

Studies have shown that union workers earn about

Other things equal,one would predict that market wages would be relatively high when

Jobs that involve pleasant work,as opposed to jobs that involve unpleasant work,usually pay

The human-capital theory of education maintains that workers who complete specific levels of education enhance their productivity through education.

The "beauty premium" can be explained by the fact that

Which of the following statements is not correct?

Some discriminatory hiring practices can be expected,even if markets are competitive,as a result of

Which theory would support the idea that education does not enhance productivity and therefore raising all workers' educational levels would not affect wages?

The case study of segregated street cars in southern cities illustrates which of the following?

Expenditures on human capital

The theory of efficiency wages asserts that

Human capital is

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.

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.

Oligopoly.

The Market For the Factors of Production.

Income Inequality and Poverty.

The Theory of Consumer Choice.

Frontiers in Microeconomics.

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