Question 1

The statement that "coal miners are paid more than workers with similar levels of education" is likely to reflect the fact that

Accepted Answer

A) coal mining is a declining industry. 
B) coal mining jobs are potentially more dangerous than jobs with comparable education requirements. 
C) all coal mines use union labor. 
D) coal exports are rising. 
A) coal mining is a declining industry. 
B) coal mining jobs are potentially more dangerous than jobs with comparable education requirements. 
C) all coal mines use union labor. 
D) coal exports are rising.

Question 2

In the signaling theory of education, (i)	schooling itself does not lead to more productive workers.
(ii)	the worker signals to the employer that he is a valuable employee because he was willing to spend time to get an education.
(iii)	schooling enhances worker productivity.

Accepted Answer

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

Question 3

Which theory explains the fact that some firms may choose to pay their employees more then they would earn as determined by equilibrium in the labor market?

Accepted Answer

A) the theory of efficiency wages 
B) the marginal-productivity theory 
C) human-capital theory 
D) signaling theory 
A) the theory of efficiency wages 
B) the marginal-productivity theory 
C) human-capital theory 
D) signaling theory

Question 4

Which of the following scenarios would serve to decrease the demand for unskilled labor in our country?

Accepted Answer

A) increased productivity gains among the unskilled laborers 
B) increased demand for goods produced by unskilled labor 
C) increased international trade with countries where unskilled labor is more plentiful 
D) increased supply of migrant workers 
A) increased productivity gains among the unskilled laborers 
B) increased demand for goods produced by unskilled labor 
C) increased international trade with countries where unskilled labor is more plentiful 
D) increased supply of migrant workers

Question 5

Which of the following sets of circumstances is likely to provide the best evidence in support of the theory of efficiency wages?

Accepted Answer

A) Workers in the market are unskilled and not represented by a union, and their wage exceeds the equilibrium wage. 
B) Workers in the market are highly skilled and not represented by a union, and their wage exceeds the equilibrium wage. 
C) Workers in the market are highly skilled and represented by a union, and their wage exceeds the equilibrium wage. 
D) Employers in the market are known for reducing the workers' wage whenever they get an opportunity to do so. 
A) Workers in the market are unskilled and not represented by a union, and their wage exceeds the equilibrium wage. 
B) Workers in the market are highly skilled and not represented by a union, and their wage exceeds the equilibrium wage. 
C) Workers in the market are highly skilled and represented by a union, and their wage exceeds the equilibrium wage. 
D) Employers in the market are known for reducing the workers' wage whenever they get an opportunity to do so.

Question 6

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.

Question 7

Which of the following represents an example of labor-market discrimination?

Accepted Answer

A) An employer pays a higher wage to older workers. 
B) An employer pays a higher wage to men than to women. 
C) An employer bases the decision to grant a job interview on the perceived race of the applicant, as inferred by the person's name. 
D) Both b and c are examples of discrimination. 
A) An employer pays a higher wage to older workers. 
B) An employer pays a higher wage to men than to women. 
C) An employer bases the decision to grant a job interview on the perceived race of the applicant, as inferred by the person's name. 
D) Both b and c are examples of discrimination.

Question 8

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 workers 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 workers 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 9

Why do major-league baseball players get paid more than minor-league players?

Accepted Answer

A) Major-league players are better athletes. 
B) The higher wage reflects a compensating differential. 
C) Playing in the major leagues in more pleasant then playing in the minor leagues. 
D) The higher wage is often due to educational discrepancies. 
A) Major-league players are better athletes. 
B) The higher wage reflects a compensating differential. 
C) Playing in the major leagues in more pleasant then playing in the minor leagues. 
D) The higher wage is often due to educational discrepancies.

Question 10

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 11

Politicians often point to wage differentials as evidence of labor-market discrimination against ethnic minorities and women;however,economists argue against this approach because people differ in the kinds of work they are willing and able to do.

Accepted Answer

A) True 
 B)False

Question 12

Above-equilibrium wages caused by efficiency wages will most likely result in (i)	an increase in the quantity of labor supplied.
(ii)	a surplus of labor.
(iii)	increased unemployment.

Accepted Answer

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

Question 13

When discrimination occurs as a result of prejudice,firms do not maximize profits.

Accepted Answer

A) True 
 B)False

Question 14

Empirical evidence suggests that ability,effort,and chance are not likely to be significant contributors to wage differences.

Accepted Answer

A) True 
 B)False

Question 15

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers offer two main hypotheses:

Accepted Answer

A) One hypothesis emphasizes education, and the other emphasizes random influences. 
B) One hypothesis emphasizes education, and the other emphasizes supply and demand. 
C) One hypothesis emphasizes international trade, and the other emphasizes technology. 
D) One hypothesis emphasizes signaling, and the other emphasizes education. 
A) One hypothesis emphasizes education, and the other emphasizes random influences. 
B) One hypothesis emphasizes education, and the other emphasizes supply and demand. 
C) One hypothesis emphasizes international trade, and the other emphasizes technology. 
D) One hypothesis emphasizes signaling, and the other emphasizes education.

Question 16

Figure 19-2
  
-Refer to Figure 19-2.This figure depicts labor demand and supply in a nonunionized labor market.The original equilibrium is at point A.If a labor union subsequently establishes a union shop and negotiates an hourly wage of $20,then the employment level

Accepted Answer

A) increases from 6,000 to 10,000. 
B) increases from 3,000 to 10,000. 
C) decreases from 10,000 to 3,000. 
D) decreases from 6,000 to 3,000. 
A) increases from 6,000 to 10,000. 
B) increases from 3,000 to 10,000. 
C) decreases from 10,000 to 3,000. 
D) decreases from 6,000 to 3,000.

Question 17

Women are clearly underrepresented in the economics profession.This is possibly evidence of (i)	self-selection of females into other occupations.
(ii)	cultural bias in primary and secondary education.
(iii)	labor market discrimination.

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 18

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

Accepted Answer

A) True 
 B)False

Question 19

Evaluate the following statement: "The gender pay gap provides evidence of widespread,severe,ongoing discrimination by employers and fellow workers."

Accepted Answer

There are many explanations of the gende

Question 20

In the signaling theory of education, (i)	schooling makes workers more productive in the short-run.
(ii)	schooling makes workers more productive in the long-run.
(iii)	the worker signals to the employer that he is a valuable employee because he was willing to spend time to get an education.

Accepted Answer

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

Exam 19: Earnings and Discrimination

The statement that "coal miners are paid more than workers with similar levels of education" is likely to reflect the fact that

In the signaling theory of education, (i) schooling itself does not lead to more productive workers. (ii) the worker signals to the employer that he is a valuable employee because he was willing to spend time to get an education. (iii) schooling enhances worker productivity.

Which theory explains the fact that some firms may choose to pay their employees more then they would earn as determined by equilibrium in the labor market?

Which of the following scenarios would serve to decrease the demand for unskilled labor in our country?

Which of the following sets of circumstances is likely to provide the best evidence in support of the theory of efficiency wages?

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

Which of the following represents an example of labor-market discrimination?

Why do major-league baseball players get paid more than minor-league players?

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

Politicians often point to wage differentials as evidence of labor-market discrimination against ethnic minorities and women;however,economists argue against this approach because people differ in the kinds of work they are willing and able to do.

Above-equilibrium wages caused by efficiency wages will most likely result in (i) an increase in the quantity of labor supplied. (ii) a surplus of labor. (iii) increased unemployment.

When discrimination occurs as a result of prejudice,firms do not maximize profits.

Empirical evidence suggests that ability,effort,and chance are not likely to be significant contributors to wage differences.

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers offer two main hypotheses:

Figure 19-2 -Refer to Figure 19-2.This figure depicts labor demand and supply in a nonunionized labor market.The original equilibrium is at point A.If a labor union subsequently establishes a union shop and negotiates an hourly wage of $20,then the employment level

Women are clearly underrepresented in the economics profession.This is possibly evidence of (i) self-selection of females into other occupations. (ii) cultural bias in primary and secondary education. (iii) labor market discrimination.

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

Evaluate the following statement: "The gender pay gap provides evidence of widespread,severe,ongoing discrimination by employers and fellow workers."

In the signaling theory of education, (i) schooling makes workers more productive in the short-run. (ii) schooling makes workers more productive in the long-run. (iii) the worker signals to the employer that he is a valuable employee because he was willing to spend time to get an education.

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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