Question 1

In recent years,the amount of international trade in which the United States engages has

Accepted Answer

A) increased, altering the demand for skilled and unskilled labor. 
B) decreased a little, altering the demand for skilled and unskilled labor. 
C) decreased substantially, altering the demand for skilled and unskilled labor. 
D) remained fairly constant; thus, the demand for skilled and unskilled labor is unchanged. 
A) increased, altering the demand for skilled and unskilled labor. 
B) decreased a little, altering the demand for skilled and unskilled labor. 
C) decreased substantially, altering the demand for skilled and unskilled labor. 
D) remained fairly constant; thus, the demand for skilled and unskilled labor is unchanged.

Question 2

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 3

Which of the following can be used to help explain wage differences among different groups of workers?

Accepted Answer

A) human capital acquired through education 
B) human capital acquired through job experience 
C) compensating differentials 
D) All of the above can explain wage differences. 
A) human capital acquired through education 
B) human capital acquired through job experience 
C) compensating differentials 
D) All of the above can explain wage differences.

Question 4

Regarding the possibility of labor-market discrimination,a consensus view among economists is that

Accepted Answer

A) all wage differences among groups are attributable to differences in human capital and compensating differentials. 
B) most wage differences among groups are attributable to discrimination. 
C) wage differences among groups are not sufficient by themselves to determine how much discrimination there is. 
D) many employers use compensating differentials to hide discriminatory practices. 
A) all wage differences among groups are attributable to differences in human capital and compensating differentials. 
B) most wage differences among groups are attributable to discrimination. 
C) wage differences among groups are not sufficient by themselves to determine how much discrimination there is. 
D) many employers use compensating differentials to hide discriminatory practices.

Question 5

All differences in wages that are not accounted for by differences in human-capital investment are likely to be a result of discrimination.

Accepted Answer

A) True 
 B)False

Question 6

According to the human-capital view,education

Accepted Answer

A) has no effect on lifetime earnings. 
B) alters work ethic. 
C) enhances productivity. 
D) is an indicator of natural ability. 
A) has no effect on lifetime earnings. 
B) alters work ethic. 
C) enhances productivity. 
D) is an indicator of natural ability.

Question 7

Which of the following affects a worker's wage? (i)	worker characteristics such as years of experience and education
(ii)	job attributes such as the unpleasantness of the work
(iii)	discrimination based on the age,race,or gender of the worker

Accepted Answer

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

Question 8

In the country of Amazonia,men and women have the same level of education and choose different forms of work in the same proportions.The only real difference is that men typically stay home to raise young children,returning to the work force after their children enter elementary school.If no discrimination exists,then we would expect that,on average,

Accepted Answer

A) men and women would earn the same wage. 
B) men would earn more than women. 
C) men would earn less than women. 
D) any wage difference between men and women would be due to compensating differentials. 
A) men and women would earn the same wage. 
B) men would earn more than women. 
C) men would earn less than women. 
D) any wage difference between men and women would be due to compensating differentials.

Question 9

A union's major source of power is its

Accepted Answer

A) high-profile leadership. 
B) ability to increase productivity. 
C) ability to threaten a strike. 
D) ability to deny employers the opportunity to bargain over wages. 
A) high-profile leadership. 
B) ability to increase productivity. 
C) ability to threaten a strike. 
D) ability to deny employers the opportunity to bargain over wages.

Question 10

The statement that "the rich get richer,and the poor get poorer" is supported by evidence of an expanding wage gap between high-skill and low-skill workers.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following explains the "beauty premium" differences in wages?

Accepted Answer

A) Better-looking people are preferred by customers; thus, employers will pay them higher wages than average-looking people. 
B) People who project an attractive personal appearance may be more intelligent than average-looking people; thus, employers will pay them higher wages than average-looking people. 
C) Average-looking people are preferred by customers; thus, employers will pay them higher wages than better-looking people. 
D) Both a and b are correct. 
A) Better-looking people are preferred by customers; thus, employers will pay them higher wages than average-looking people. 
B) People who project an attractive personal appearance may be more intelligent than average-looking people; thus, employers will pay them higher wages than average-looking people. 
C) Average-looking people are preferred by customers; thus, employers will pay them higher wages than better-looking people. 
D) Both a and b are correct.

Question 12

Bob and Rob are identical twins who attended grammar school through college together.Bob took a job as an engineer who must travel out of state once a week.Rob took a job as an engineer who does not have to travel out of the state.Bob earns $100,000 a year,and Rob earns $85,000 a year.Select the best explanation for this wage difference.

Accepted Answer

A) Rob has more human capital relative to Bob. 
B) Rob has less human capital relative to Bob. 
C) Bob receives a higher wage to compensate for the disagreeable nature of business travel. 
D) Bob's higher salary supports the signaling theory of education. 
A) Rob has more human capital relative to Bob. 
B) Rob has less human capital relative to Bob. 
C) Bob receives a higher wage to compensate for the disagreeable nature of business travel. 
D) Bob's higher salary supports the signaling theory of education.

Question 13

Store clerks are known to have low wages.This is likely to be reflect the fact that

Accepted Answer

A) store clerk jobs are perceived to be relatively easy, thus attracting low-skill workers. 
B) store clerk jobs are perceived to be relatively difficult, thus attracting high-skill workers.. 
C) many people perceive the job of store clerk as having an element danger. 
D) store clerks are required to have a college degree. 
A) store clerk jobs are perceived to be relatively easy, thus attracting low-skill workers. 
B) store clerk jobs are perceived to be relatively difficult, thus attracting high-skill workers.. 
C) many people perceive the job of store clerk as having an element danger. 
D) store clerks are required to have a college degree.

Question 14

By definition,there is discrimination when the marketplace offers different opportunities to similar individuals who differ only by

Accepted Answer

A) race, ethnic group, sex, age, or other personal characteristics. 
B) qualifications, experience, or job preferences. 
C) the levels of human capital. 
D) All of the above are correct. 
A) race, ethnic group, sex, age, or other personal characteristics. 
B) qualifications, experience, or job preferences. 
C) the levels of human capital. 
D) All of the above are correct.

Question 15

How does the theory of efficiency wages explain above-equilibrium wages?

Accepted Answer

A) Employers are forced to pay higher wages in efficient markets. 
B) Employers give their workers a higher wage in the hope that it will lead to increased productivity. 
C) Workers get higher wages when they prove they are increasing their productivity. 
D) Workers demand higher wages to compensate for poor fringe benefits. 
A) Employers are forced to pay higher wages in efficient markets. 
B) Employers give their workers a higher wage in the hope that it will lead to increased productivity. 
C) Workers get higher wages when they prove they are increasing their productivity. 
D) Workers demand higher wages to compensate for poor fringe benefits.

Question 16

Which of the following statements is not correct?

Accepted Answer

A) Some firms pay wages that are above the equilibrium wage. 
B) Workers sometimes form labor unions to push their wages up. 
C) Wages never deviate from the balance of supply and demand in the market for labor. 
D) The federal government mandates that employers pay their workers at least as much as the minimum wage. 
A) Some firms pay wages that are above the equilibrium wage. 
B) Workers sometimes form labor unions to push their wages up. 
C) Wages never deviate from the balance of supply and demand in the market for labor. 
D) The federal government mandates that employers pay their workers at least as much as the minimum wage.

Question 17

Economists who study labor markets have documented

Accepted Answer

A) a general decline in the wages of college graduates over the last decade. 
B) an increasing trend in U.S.labor markets for employers to pay all costs of education and training. 
C) a decrease in the earnings gap between low-skill and high-skill workers over the past two decades. 
D) an increase in the earnings gap between low-skill and high-skill workers over the past two decades. 
A) a general decline in the wages of college graduates over the last decade. 
B) an increasing trend in U.S.labor markets for employers to pay all costs of education and training. 
C) a decrease in the earnings gap between low-skill and high-skill workers over the past two decades. 
D) an increase in the earnings gap between low-skill and high-skill workers over the past two decades.

Question 18

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.If some consumers in the market for haircuts have a strong preference for having their hair cut by a barber who is not going bald,then

Accepted Answer

A) the difference in wages will eventually disappear since a haircut is a homogeneous good. 
B) barbershops that hire barbers with hair will be able to charge a higher price for a haircut to those consumers who have a strong preference for barbers with hair. 
C) barbershops that hire barbers with hair will always be much more profitable. 
D) barbershops that hire bald barbers will always be much more profitable. 
A) the difference in wages will eventually disappear since a haircut is a homogeneous good. 
B) barbershops that hire barbers with hair will be able to charge a higher price for a haircut to those consumers who have a strong preference for barbers with hair. 
C) barbershops that hire barbers with hair will always be much more profitable. 
D) barbershops that hire bald barbers will always be much more profitable.

Question 19

When economists study wages,they relate a worker's wage to those variables that are most subject to measurement.Which of the following are most likely to be unmeasurable?

Accepted Answer

A) years of schooling, age, and years of experience 
B) job characteristics, gender, and race 
C) ability, effort, and chance 
D) gender, race, and geographic location 
A) years of schooling, age, and years of experience 
B) job characteristics, gender, and race 
C) ability, effort, and chance 
D) gender, race, and geographic location

Question 20

Suppose that the country of Libraria made a concerted effort to increase the educational level of its people.If this effort had no effect on the wages of its workers,one might consider this as evidence in support of

Accepted Answer

A) the human-capital view of education. 
B) the signaling view of education. 
C) both the human-capital and the signaling view of education. 
D) neither the human-capital nor the signaling view of education. 
A) the human-capital view of education. 
B) the signaling view of education. 
C) both the human-capital and the signaling view of education. 
D) neither the human-capital nor the signaling view of education.

Exam 19: Earnings and Discrimination

In recent years,the amount of international trade in which the United States engages has

Which of the following can be used to help explain wage differences among different groups of workers?

Regarding the possibility of labor-market discrimination,a consensus view among economists is that

All differences in wages that are not accounted for by differences in human-capital investment are likely to be a result of discrimination.

According to the human-capital view,education

Which of the following affects a worker's wage? (i) worker characteristics such as years of experience and education (ii) job attributes such as the unpleasantness of the work (iii) discrimination based on the age,race,or gender of the worker

A union's major source of power is its

The statement that "the rich get richer,and the poor get poorer" is supported by evidence of an expanding wage gap between high-skill and low-skill workers.

Which of the following explains the "beauty premium" differences in wages?

Store clerks are known to have low wages.This is likely to be reflect the fact that

By definition,there is discrimination when the marketplace offers different opportunities to similar individuals who differ only by

How does the theory of efficiency wages explain above-equilibrium wages?

Which of the following statements is not correct?

Economists who study labor markets have documented

When economists study wages,they relate a worker's wage to those variables that are most subject to measurement.Which of the following are most likely to be unmeasurable?

Suppose that the country of Libraria made a concerted effort to increase the educational level of its people.If this effort had no effect on the wages of its workers,one might consider this as evidence in support 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 Applications

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

Oligopoly

Monopolistic Competition

The Markets for the Factors of Production

Income Inequality 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 Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

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

Five Debates Over Macroeconomic Policy

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