Question 1

An effective minimum wage law will increase the quantity of labor demanded.

Accepted Answer

A) True 
 B)False

Question 2

It is likely that,if we could measure the quality as well as the quantity of education,

Accepted Answer

A)  the human-capital argument would become less compelling as a means of explaining wage differentials between white workers and black workers. 
B)  the human-capital argument would become less compelling as a means of explaining wage differentials between male workers and female workers. 
C)  wage differentials between white workers and black workers would be more puzzling than they are now. 
D)  wage differentials between white workers and black workers would be more fully explained. 
A)  the human-capital argument would become less compelling as a means of explaining wage differentials between white workers and black workers. 
B)  the human-capital argument would become less compelling as a means of explaining wage differentials between male workers and female workers. 
C)  wage differentials between white workers and black workers would be more puzzling than they are now. 
D)  wage differentials between white workers and black workers would be more fully explained.

Question 3

Which term do economists use to refer to a difference in wages that arises from nonmonetary characteristics of different jobs?

Accepted Answer

A)  non-pecuniary differentials 
B)  compensating differentials 
C)  fundamental differences 
D)  idiosyncratic differences 
A)  non-pecuniary differentials 
B)  compensating differentials 
C)  fundamental differences 
D)  idiosyncratic differences

Question 4

Which of the following statements is not correct?

Accepted Answer

A)  It is possible that additional education will increase a worker's wage without increasing the worker's productivity. 
B)  If discriminating wage differentials persist in competitive markets, it is primarily because either consumers are willing to pay to maintain the discrimination or because government mandates it. 
C)  An efficiency wage corresponds to a lower wage that a nondiscriminating employer pays to a worker because a discriminating employer won't hire her. 
D)  In competitive markets, workers are paid a wage equal to the value of their marginal product. 
A)  It is possible that additional education will increase a worker's wage without increasing the worker's productivity. 
B)  If discriminating wage differentials persist in competitive markets, it is primarily because either consumers are willing to pay to maintain the discrimination or because government mandates it. 
C)  An efficiency wage corresponds to a lower wage that a nondiscriminating employer pays to a worker because a discriminating employer won't hire her. 
D)  In competitive markets, workers are paid a wage equal to the value of their marginal product.

Question 5

Which of the following is not an example of a compensating differential?

Accepted Answer

A)  paying workers who do dull, boring work higher wages than workers who do fun, interesting work, all else equal 
B)  paying workers who work on the night shift higher wages than workers who work the day shift, all else equal 
C)  paying workers who do more dangerous work higher wages than workers who do less dangerous work, all else equal 
D)  paying workers with PhDs higher wages than workers with BAs, all else equal 
A)  paying workers who do dull, boring work higher wages than workers who do fun, interesting work, all else equal 
B)  paying workers who work on the night shift higher wages than workers who work the day shift, all else equal 
C)  paying workers who do more dangerous work higher wages than workers who do less dangerous work, all else equal 
D)  paying workers with PhDs higher wages than workers with BAs, all else equal

Question 6

Which of the following is an example of customer discrimination?

Accepted Answer

A)  European soccer players earn more than U.S. soccer players since soccer is more popular in Europe. 
B)  Male basketball players in the NBA earn higher salaries than female basketball players in the WNBA since viewers prefer watching NBA games. 
C)  Golfers on the men's PGA tour earn more than golfers on the women's LPGA tour since people prefer watching the men play golf. 
D)  All of the above are examples of customer discrimination. 
A)  European soccer players earn more than U.S. soccer players since soccer is more popular in Europe. 
B)  Male basketball players in the NBA earn higher salaries than female basketball players in the WNBA since viewers prefer watching NBA games. 
C)  Golfers on the men's PGA tour earn more than golfers on the women's LPGA tour since people prefer watching the men play golf. 
D)  All of the above are examples of customer discrimination.

Question 7

Labor unions will raise the quantity of labor demanded.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

The statement "the rich get richer and the poor get poorer" is evident in the fact that

Accepted Answer

A)  the earnings gap between high-skill jobs and low-skill jobs has increased over the last several years. 
B)  developing countries do not pay workers the value of their marginal product. 
C)  developed economies export high-skill jobs to developing countries. 
D)  All of the above are correct. 
A)  the earnings gap between high-skill jobs and low-skill jobs has increased over the last several years. 
B)  developing countries do not pay workers the value of their marginal product. 
C)  developed economies export high-skill jobs to developing countries. 
D)  All of the above are correct.

Question 10

Which of the following factors affects the marginal productivity of a worker?

Accepted Answer

A)  human capital 
B)  the worker's disposable income 
C)  compensating wage differentials 
D)  discrimination based on age, race, or gender 
A)  human capital 
B)  the worker's disposable income 
C)  compensating wage differentials 
D)  discrimination based on age, race, or gender

Question 11

If a worker is indifferent between a job with a wage of $12 per hour and a job with a wage of $15 per hour,then the

Accepted Answer

A)  higher-paying job has a compensating wage differential of $3 per hour. 
B)  higher-paying job has a compensating wage differential of $15 per hour. 
C)  higher-paying job is intrinsically more attractive than the lower-paying job. 
D)  worker's preferences are not rational. 
A)  higher-paying job has a compensating wage differential of $3 per hour. 
B)  higher-paying job has a compensating wage differential of $15 per hour. 
C)  higher-paying job is intrinsically more attractive than the lower-paying job. 
D)  worker's preferences are not rational.

Question 12

Why would a wage differential due to discrimination be unlikely to persist in a competitive labor market?

Accepted Answer

A)  There is a cost advantage for firms that do not discriminate. 
B)  Workers who are victims of discrimination will eventually drop out of the labor market. 
C)  Competing firms will hire fewer of the workers who are temporarily victimized by discrimination. 
D)  Discrimination cannot exist in markets. 
A)  There is a cost advantage for firms that do not discriminate. 
B)  Workers who are victims of discrimination will eventually drop out of the labor market. 
C)  Competing firms will hire fewer of the workers who are temporarily victimized by discrimination. 
D)  Discrimination cannot exist in markets.

Question 13

Scenario 19-5
Billy works for the local piano moving company part-time after school. Billy has worked for the company for two years but still hasn't received a wage increase, even though newer employees have received raises. Billy has threatened his employer with a lawsuit if he doesn't get a raise in the next few weeks. Billy believes he is a victim of labor-market discrimination.
-Refer to Scenario 19-5.Which of the following statements would weaken Billy's case against his employer?

Accepted Answer

A)  Billy only works part-time; as a result, he has fewer hours of experience even though he has been with the company for more years. 
B)  Billy complains of lower back problems; as a result, he frequently gets the easy job of holding the doors open while the movers carry the piano into the customer's house. 
C)  The other employees have high school diplomas, but Billy did not graduate from high school. 
D)  All of the above statements would weaken Billy's case. 
A)  Billy only works part-time; as a result, he has fewer hours of experience even though he has been with the company for more years. 
B)  Billy complains of lower back problems; as a result, he frequently gets the easy job of holding the doors open while the movers carry the piano into the customer's house. 
C)  The other employees have high school diplomas, but Billy did not graduate from high school. 
D)  All of the above statements would weaken Billy's case.

Question 14

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 15

Scenario 19-2
Travis, a student at a community college, is considering what he should do for summer employment. Two recruiters show up at his school in search of summer workers. Recruiter A is looking for workers to help a disaster relief agency distribute food aid in Africa. Recruiter B is looking for custodial help to clean motel rooms in a motel located near the entrance to a famous national park.
-Refer to Scenario 19-2.Travis is carefully considering the options that each recruiter presents.On the basis of knowledge obtained in his economics class,Travis concludes that

Accepted Answer

A)  if the motel job requires some night shift work, wages will be lower than otherwise. 
B)  the job that is more fun will have a higher wage. 
C)  if the motel job doesn't require any special skills, the wage offer will be lower than otherwise. 
D)  All of the above are correct. 
A)  if the motel job requires some night shift work, wages will be lower than otherwise. 
B)  the job that is more fun will have a higher wage. 
C)  if the motel job doesn't require any special skills, the wage offer will be lower than otherwise. 
D)  All of the above are correct.

Question 16

Why do economists study sports teams when looking for evidence of labor-market discrimination?

Accepted Answer

A)  because the salaries paid to professional athletes exhibit the superstar phenomenon, which is highly correlated with discrimination 
B)  because all four United States professional sports leagues (football, basketball, hockey, and baseball) require discrimination studies every five years 
C)  because nonwhites comprise a majority of starters for many professional sports teams 
D)  because the wide availability of performance statistics allows economists to control for individual player productivity in ways that are difficult to do for other types of firms 
A)  because the salaries paid to professional athletes exhibit the superstar phenomenon, which is highly correlated with discrimination 
B)  because all four United States professional sports leagues (football, basketball, hockey, and baseball) require discrimination studies every five years 
C)  because nonwhites comprise a majority of starters for many professional sports teams 
D)  because the wide availability of performance statistics allows economists to control for individual player productivity in ways that are difficult to do for other types of firms

Question 17

Park rangers at Yellowstone National Park are known to have low wages.This is probably because

Accepted Answer

A)  park rangers are required to be college graduates. 
B)  park rangers don't need much money to live. 
C)  park ranger jobs are perceived to be dangerous. 
D)  park ranger jobs are perceived to be "fun." 
A)  park rangers are required to be college graduates. 
B)  park rangers don't need much money to live. 
C)  park ranger jobs are perceived to be dangerous. 
D)  park ranger jobs are perceived to be "fun."

Question 18

The rising gap in wages between unskilled and skilled workers is most likely related to a larger increase in demand for unskilled occupations relative to skilled occupations.

Accepted Answer

A) True 
 B)False

Question 19

A natural correction to employer discrimination in market economies is the

Accepted Answer

A)  threat of judicial review. 
B)  profit motive. 
C)  political process. 
D)  union movement. 
A)  threat of judicial review. 
B)  profit motive. 
C)  political process. 
D)  union movement.

Question 20

Workers whose skills become obsolete as a result of technological change are often paid a lower wage as a result of

Accepted Answer

A)  natural ability. 
B)  geographic location of employment. 
C)  chance. 
D)  work effort. 
A)  natural ability. 
B)  geographic location of employment. 
C)  chance. 
D)  work effort.

An effective minimum wage law will increase the quantity of labor demanded.

It is likely that,if we could measure the quality as well as the quantity of education,

Which term do economists use to refer to a difference in wages that arises from nonmonetary characteristics of different jobs?

Which of the following statements is not correct?

Which of the following is not an example of a compensating differential?

Which of the following is an example of customer discrimination?

Labor unions will raise the quantity of labor demanded.

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

The statement "the rich get richer and the poor get poorer" is evident in the fact that

Which of the following factors affects the marginal productivity of a worker?

If a worker is indifferent between a job with a wage of $12 per hour and a job with a wage of $15 per hour,then the

Why would a wage differential due to discrimination be unlikely to persist in a competitive labor market?

If the signaling theory of education is correct,

Why do economists study sports teams when looking for evidence of labor-market discrimination?

Park rangers at Yellowstone National Park are known to have low wages.This is probably because

The rising gap in wages between unskilled and skilled workers is most likely related to a larger increase in demand for unskilled occupations relative to skilled occupations.

A natural correction to employer discrimination in market economies is the

Workers whose skills become obsolete as a result of technological change are often paid a lower wage as a result of

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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Exam 19: Earnings and Discrimination.

An effective minimum wage law will increase the quantity of labor demanded.

It is likely that,if we could measure the quality as well as the quantity of education,

Which term do economists use to refer to a difference in wages that arises from nonmonetary characteristics of different jobs?

Which of the following statements is not correct?

Which of the following is not an example of a compensating differential?

Which of the following is an example of customer discrimination?

Labor unions will raise the quantity of labor demanded.

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

The statement "the rich get richer and the poor get poorer" is evident in the fact that

Which of the following factors affects the marginal productivity of a worker?

If a worker is indifferent between a job with a wage of $12 per hour and a job with a wage of $15 per hour,then the

Why would a wage differential due to discrimination be unlikely to persist in a competitive labor market?

If the signaling theory of education is correct,

Why do economists study sports teams when looking for evidence of labor-market discrimination?

Park rangers at Yellowstone National Park are known to have low wages.This is probably because

The rising gap in wages between unskilled and skilled workers is most likely related to a larger increase in demand for unskilled occupations relative to skilled occupations.

A natural correction to employer discrimination in market economies is the

Workers whose skills become obsolete as a result of technological change are often paid a lower wage as a result of

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.

Filters