Question 1

The ownership of human capital

Accepted Answer

A)  is typically embodied in related physical capital. 
B)  may be subject to government restrictions on transferability. 
C)  is not easily transferable. 
D)  All of the above are correct. 
A)  is typically embodied in related physical capital. 
B)  may be subject to government restrictions on transferability. 
C)  is not easily transferable. 
D)  All of the above are correct.

Question 2

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.In a competitive market for piano movers,why might Billy's wage differential persist?

Accepted Answer

A)  Billy works harder than the other employees. 
B)  Billy joins a labor union. 
C)  Billy's amiable personality allows him to work well with his co-workers. 
D)  Customers do not like Billy because he has a bad attitude. 
A)  Billy works harder than the other employees. 
B)  Billy joins a labor union. 
C)  Billy's amiable personality allows him to work well with his co-workers. 
D)  Customers do not like Billy because he has a bad attitude.

Question 3

Figure 19-3
The manufacturing labor market.
  
-Refer to Figure 19-3.Suppose the manufacturing labor market,which is non-unionized,is in equilibrium at a wage equal to $30.Suppose now that the AFL-CIO (a labor organization)organizes the workers in the manufacturing market and negotiates a wage of $38 per hour.After the workers become unionized,how many workers do manufacturing firms collectively hire?

Accepted Answer

A)  130 workers 
B)  150 workers 
C)  170 workers 
D)  There is not enough information to determine the number of workers. 
A)  130 workers 
B)  150 workers 
C)  170 workers 
D)  There is not enough information to determine the number of workers.

Question 4

Which of the following professionals is most likely to generate the income of a superstar?

Accepted Answer

A)  the best teacher 
B)  the best dentist 
C)  the best author 
D)  the best airplane pilot 
A)  the best teacher 
B)  the best dentist 
C)  the best author 
D)  the best airplane pilot

Question 5

The job of night watchman at the Punxsutawny Phil Groundhog museum is known to have a high wage.Which of the following would push the night watchman's wage higher?

Accepted Answer

A)  The job does not require specialized skills. 
B)  The job is easy. 
C)  The job is incredibly dull. 
D)  The job has minimal risk of injury. 
A)  The job does not require specialized skills. 
B)  The job is easy. 
C)  The job is incredibly dull. 
D)  The job has minimal risk of injury.

Question 6

Workers with more human capital on average earn substantially higher pay than workers with less human capital in

Accepted Answer

A)  most countries but not in the United States. 
B)  the United States but not in most other countries. 
C)  the United States and in most other countries. 
D)  None of the above is correct; the evidence fails to indicate that human capital is a significant factor in determining earnings anywhere in the world. 
A)  most countries but not in the United States. 
B)  the United States but not in most other countries. 
C)  the United States and in most other countries. 
D)  None of the above is correct; the evidence fails to indicate that human capital is a significant factor in determining earnings anywhere in the world.

Question 7

Firms that operate in competitive product markets and choose to practice discrimination in hiring workers

Accepted Answer

A)  will survive if they increase production and garner a larger market share. 
B)  will eventually earn zero economic profits. 
C)  will survive as long as they are willing to have a smaller market share. 
D)  are likely to eventually go out of business. 
A)  will survive if they increase production and garner a larger market share. 
B)  will eventually earn zero economic profits. 
C)  will survive as long as they are willing to have a smaller market share. 
D)  are likely to eventually go out of business.

Question 8

Which of the following is least likely to be the reason women are underrepresented in the economics profession?

Accepted Answer

A)  labor market discrimination 
B)  the choice of women to select other occupations 
C)  cultural bias in primary and secondary education 
D)  the inability of women to solve problems in economics 
A)  labor market discrimination 
B)  the choice of women to select other occupations 
C)  cultural bias in primary and secondary education 
D)  the inability of women to solve problems in economics

Question 9

Technology is an important factor in explaining the high incomes of superstars because

Accepted Answer

A)  technology accounts for differences in incomes within all occupations. 
B)  technology makes it possible for the best producer to supply every customer at low cost. 
C)  technology that can limit access to the superstars is available. 
D)  only technologically-literate superstars can earn super incomes. 
A)  technology accounts for differences in incomes within all occupations. 
B)  technology makes it possible for the best producer to supply every customer at low cost. 
C)  technology that can limit access to the superstars is available. 
D)  only technologically-literate superstars can earn super incomes.

Question 10

Evidence from a study of the market for baseball players using 1960s data

Accepted Answer

A)  indicated that sports with strong player associations are unlikely to experience wage discrimination. 
B)  suggested that government regulation had eliminated most evidence of wage discrimination. 
C)  found some evidence of consumer-driven wage discrimination. 
D)  found that measurement of marginal productivity was very difficult for baseball players. 
A)  indicated that sports with strong player associations are unlikely to experience wage discrimination. 
B)  suggested that government regulation had eliminated most evidence of wage discrimination. 
C)  found some evidence of consumer-driven wage discrimination. 
D)  found that measurement of marginal productivity was very difficult for baseball players.

Question 11

The Asian Development Bank has been investing in education and training programs in the developing economies of Asia over the last five years.As a result of this investment,economists who adhere to the human capital view of education would predict

Accepted Answer

A)  rising wages as labor productivity is enhanced. 
B)  falling wages as the labor market is saturated with too many educated workers. 
C)  the marginal productivity of capital would not be affected. 
D)  the marginal productivity of labor would not be affected. 
A)  rising wages as labor productivity is enhanced. 
B)  falling wages as the labor market is saturated with too many educated workers. 
C)  the marginal productivity of capital would not be affected. 
D)  the marginal productivity of labor would not be affected.

Question 12

Karen is a black 21-year-old female,and Jessica is a black 41-year-old female.Both Karen and Jessica are accounting majors,and they graduated from the same college with the same GPA - Karen in 2008 and Jessica in 1988.Karen and Jessica are both financial advisers at the same mutual fund firm.Karen earns $45,000 a year,and Jessica earns $90,000 a year.Select the best explanation for this wage difference.

Accepted Answer

A)  Karen has more human capital than Jessica. 
B)  Karen has less human capital than Jessica. 
C)  Karen has been discriminated against because she is young. 
D)  Jessica has been discriminated against because she is old. 
A)  Karen has more human capital than Jessica. 
B)  Karen has less human capital than Jessica. 
C)  Karen has been discriminated against because she is young. 
D)  Jessica has been discriminated against because she is old.

Question 13

Workers who work the night shift are often paid more than those who do identical work on the day shift.This is referred to as a

Accepted Answer

A)  discriminatory wage practice. 
B)  compensating differential. 
C)  wage inequity. 
D)  a market inefficiency. 
A)  discriminatory wage practice. 
B)  compensating differential. 
C)  wage inequity. 
D)  a market inefficiency.

Question 14

Which of the following could explain the growing gap in income between unskilled and skilled workers in the United States?

Accepted Answer

A)  International trade has increased the domestic demand for skilled labor and decreased the domestic demand for unskilled labor. 
B)  Certain technological changes such as the introduction of computers have increased the domestic demand for skilled labor and decreased the domestic demand for unskilled labor. 
C)  Both a and b are correct. 
D)  Neither a nor b is correct. 
A)  International trade has increased the domestic demand for skilled labor and decreased the domestic demand for unskilled labor. 
B)  Certain technological changes such as the introduction of computers have increased the domestic demand for skilled labor and decreased the domestic demand for unskilled labor. 
C)  Both a and b are correct. 
D)  Neither a nor b is correct.

Question 15

The very high pay earned by the best actors and actresses is partially explained by the fact that

Accepted Answer

A)  they benefit from a compensating differential. 
B)  moviegoers all want to see the very best actors, not second-rate actors. 
C)  they have acting degrees from accredited acting schools. 
D)  the supply of good actors is very large. 
A)  they benefit from a compensating differential. 
B)  moviegoers all want to see the very best actors, not second-rate actors. 
C)  they have acting degrees from accredited acting schools. 
D)  the supply of good actors is very large.

Question 16

Explain why the following situation is likely to persist: soccer players in Europe are the highest paid athletes and in the US they are among the lowest paid athletes.

Accepted Answer

Consumers use personal preferences when

Question 17

When robots are used to replace workers on a factory production line,the wage gap between skilled and unskilled workers

Accepted Answer

A)  will increase only if the company can increase the price of its product. 
B)  is likely to increase. 
C)  is likely to decrease. 
D)  will not change. 
A)  will increase only if the company can increase the price of its product. 
B)  is likely to increase. 
C)  is likely to decrease. 
D)  will not change.

Question 18

A study of segregated streetcars in the southern United States in the early twentieth century found which of the following?

Accepted Answer

A)  Firms that ran the streetcars were more interested in segregating customers by race than profits. 
B)  The firms that ran the streetcars were unanimous in their support of laws that required segregation of races. 
C)  Before the passage of laws that mandated segregation of races on streetcars, segregation of smokers and nonsmokers was more common than segregation of races. 
D)  Segregation based on gender was more common than race at first. 
A)  Firms that ran the streetcars were more interested in segregating customers by race than profits. 
B)  The firms that ran the streetcars were unanimous in their support of laws that required segregation of races. 
C)  Before the passage of laws that mandated segregation of races on streetcars, segregation of smokers and nonsmokers was more common than segregation of races. 
D)  Segregation based on gender was more common than race at first.

Question 19

Human capital is

Accepted Answer

A)  a stock of equipment and structures. 
B)  the result of investments workers make in themselves such as on-the-job training. 
C)  a difference in wages that arises to offset the nonmonetary characteristics of different jobs. 
D)  inversely related to the supply of workers. 
A)  a stock of equipment and structures. 
B)  the result of investments workers make in themselves such as on-the-job training. 
C)  a difference in wages that arises to offset the nonmonetary characteristics of different jobs. 
D)  inversely related to the supply of workers.

Question 20

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.Competition in the market for haircuts is consistent with which of the following statements?

Accepted Answer

A)  Firms hiring nonbald barbers will have a cost advantage, leading to an increase in the demand for nonbald barbers. 
B)  All firms that hire only bald barbers will go out of business. 
C)  Firms hiring bald barbers will enter the market, increasing the demand for bald barbers. 
D)  Firms hiring nonbald barbers will enter the market, increasing the demand for nonbald barbers. 
A)  Firms hiring nonbald barbers will have a cost advantage, leading to an increase in the demand for nonbald barbers. 
B)  All firms that hire only bald barbers will go out of business. 
C)  Firms hiring bald barbers will enter the market, increasing the demand for bald barbers. 
D)  Firms hiring nonbald barbers will enter the market, increasing the demand for nonbald barbers.

The ownership of human capital

Which of the following professionals is most likely to generate the income of a superstar?

The job of night watchman at the Punxsutawny Phil Groundhog museum is known to have a high wage.Which of the following would push the night watchman's wage higher?

Workers with more human capital on average earn substantially higher pay than workers with less human capital in

Firms that operate in competitive product markets and choose to practice discrimination in hiring workers

Which of the following is least likely to be the reason women are underrepresented in the economics profession?

Technology is an important factor in explaining the high incomes of superstars because

Evidence from a study of the market for baseball players using 1960s data

The Asian Development Bank has been investing in education and training programs in the developing economies of Asia over the last five years.As a result of this investment,economists who adhere to the human capital view of education would predict

Workers who work the night shift are often paid more than those who do identical work on the day shift.This is referred to as a

Which of the following could explain the growing gap in income between unskilled and skilled workers in the United States?

The very high pay earned by the best actors and actresses is partially explained by the fact that

Explain why the following situation is likely to persist: soccer players in Europe are the highest paid athletes and in the US they are among the lowest paid athletes.

When robots are used to replace workers on a factory production line,the wage gap between skilled and unskilled workers

A study of segregated streetcars in the southern United States in the early twentieth century found which of the following?

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.

Filters

Exam 19: Earnings and Discrimination.

The ownership of human capital

Which of the following professionals is most likely to generate the income of a superstar?

The job of night watchman at the Punxsutawny Phil Groundhog museum is known to have a high wage.Which of the following would push the night watchman's wage higher?

Workers with more human capital on average earn substantially higher pay than workers with less human capital in

Firms that operate in competitive product markets and choose to practice discrimination in hiring workers

Which of the following is least likely to be the reason women are underrepresented in the economics profession?

Technology is an important factor in explaining the high incomes of superstars because

Evidence from a study of the market for baseball players using 1960s data

The Asian Development Bank has been investing in education and training programs in the developing economies of Asia over the last five years.As a result of this investment,economists who adhere to the human capital view of education would predict

Workers who work the night shift are often paid more than those who do identical work on the day shift.This is referred to as a

Which of the following could explain the growing gap in income between unskilled and skilled workers in the United States?

The very high pay earned by the best actors and actresses is partially explained by the fact that

Explain why the following situation is likely to persist: soccer players in Europe are the highest paid athletes and in the US they are among the lowest paid athletes.

When robots are used to replace workers on a factory production line,the wage gap between skilled and unskilled workers

A study of segregated streetcars in the southern United States in the early twentieth century found which of the following?

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.

Filters