Question 1

Evidence of differences in average wages of black workers compared to white workers

Accepted Answer

A) does not alone provide conclusive evidence of discrimination. 
B) clearly indicates differences in productivity between races. 
C) is seldom used to provide evidence of discriminatory bias. 
D) clearly indicates discrimination on the basis of race. 
A) does not alone provide conclusive evidence of discrimination. 
B) clearly indicates differences in productivity between races. 
C) is seldom used to provide evidence of discriminatory bias. 
D) clearly indicates discrimination on the basis of race.

Question 2

Studies of professional sports teams suggest that,in sports,racial discrimination is

Accepted Answer

A) rare. 
B) common and that owners of teams are largely to blame. 
C) common and that customers (fans) are largely to blame. 
D) None of the above is correct; there are no reliable studies of discrimination in sports due to the difficulties inherent in measuring athletes' productivity. 
A) rare. 
B) common and that owners of teams are largely to blame. 
C) common and that customers (fans) are largely to blame. 
D) None of the above is correct; there are no reliable studies of discrimination in sports due to the difficulties inherent in measuring athletes' productivity.

Question 3

In discussing discrimination and the wage differences that exist between men and women and between blacks and whites,it has been said that "the disease is political even if the symptom is economic." What does this mean?

Accepted Answer

A) Wage differences persist because the political system has failed to enact laws to equalize wages among all groups. 
B) Wage differences exist because of past discrimination on the part of political bodies such as city councils and school boards. 
C) Wage differences exist because of the differences in the political views of the different groups. 
D) Wage differences exist because the political system is biased against paying compensating differentials. 
A) Wage differences persist because the political system has failed to enact laws to equalize wages among all groups. 
B) Wage differences exist because of past discrimination on the part of political bodies such as city councils and school boards. 
C) Wage differences exist because of the differences in the political views of the different groups. 
D) Wage differences exist because the political system is biased against paying compensating differentials.

Question 4

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 5

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 6

In 1913,the Ford Motor Company decided to pay its employees $5 a day.This wage was significantly higher than what any other organization offered.Henry Ford believed that this wage would make his employees happier,increase their productivity,and lower employee turnover.Economists would say that Mr.Ford offered his employees

Accepted Answer

A) a union. 
B) an efficiency wage. 
C) a diminishing rate of marginal return. 
D) a leisure wage. 
A) a union. 
B) an efficiency wage. 
C) a diminishing rate of marginal return. 
D) a leisure wage.

Question 7

Which of the following describes the labor market for personal-service workers? (i)	The supply of workers is increasing as workers displaced by technological innovations seek jobs in the personal-services sector.
(ii)	The pay of these workers is increasing.
(iii)	Legal and undocumented immigrants often work in this sector.
(iv)	Most personal-service jobs require post-high school education or training.

Accepted Answer

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

Question 8

Jane and John are twins who attended grammar school through college together.Jane and John both got jobs at a brokerage firm after graduating from college.They both work equally hard.Jane earns $43,000 a year,and John earns $69,000 a year.Select the best explanation for this wage difference.

Accepted Answer

A) Jane has more human capital relative to John. 
B) Jane has less human capital relative to John. 
C) Jane has been discriminated against because she is female. 
D) John has been discriminated against because he is male. 
A) Jane has more human capital relative to John. 
B) Jane has less human capital relative to John. 
C) Jane has been discriminated against because she is female. 
D) John has been discriminated against because he is male.

Question 9

Given that the median male is better paid than the median female,which of the following is not a valid explanation for wage differences?

Accepted Answer

A) compensating differentials 
B) differences in human capital 
C) discrimination 
D) None of the above can be ruled out as a possible partial explanation. 
A) compensating differentials 
B) differences in human capital 
C) discrimination 
D) None of the above can be ruled out as a possible partial explanation.

Question 10

Nemedia and Aquilonia have just started to trade with each other.Nemedia exports goods produced with skilled labor and imports goods made with unskilled labor from Aquilonia.Over time,we would expect that the wages of skilled labor in Nemedia will

Accepted Answer

A) rise, and the wages of unskilled labor in Nemedia will fall. 
B) fall, and the wages of unskilled labor in Nemedia will rise. 
C) rise, and the wages of unskilled labor in Nemedia will rise. 
D) fall, and the wages of unskilled labor in Nemedia will fall. 
A) rise, and the wages of unskilled labor in Nemedia will fall. 
B) fall, and the wages of unskilled labor in Nemedia will rise. 
C) rise, and the wages of unskilled labor in Nemedia will rise. 
D) fall, and the wages of unskilled labor in Nemedia will fall.

Question 11

In what way do competitive markets have a "natural remedy" for discriminatory hiring practices?

Accepted Answer

A) Federal and state governments naturally step in to resolve problems of discrimination. 
B) Profit-maximizing firms that do not discriminate tend to replace firms that discriminate. 
C) Wages paid to groups that are victimized by discrimination are eventually bid up to above-equilibrium levels. 
D) Discrimination is usually the outcome of rational decision-making processes, and competitive markets produce rational outcomes. 
A) Federal and state governments naturally step in to resolve problems of discrimination. 
B) Profit-maximizing firms that do not discriminate tend to replace firms that discriminate. 
C) Wages paid to groups that are victimized by discrimination are eventually bid up to above-equilibrium levels. 
D) Discrimination is usually the outcome of rational decision-making processes, and competitive markets produce rational outcomes.

Question 12

One hypothesis to explain the rising gap in wages between unskilled and skilled workers in the United States is that international trade has altered the relative demands for skilled and unskilled workers.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Economic theory of labor markets suggests that wages are governed by labor supply and labor demand.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements is not correct?

Accepted Answer

A) Unions may raise wages above equilibrium because they can threaten to strike. 
B) Minimum wage laws are most likely to raise the wages of unskilled workers. 
C) Employers may voluntarily pay more than the equilibrium wage to increase worker effort. 
D) Efficiency wages explain why more efficient workers earn more than less efficient workers. 
A) Unions may raise wages above equilibrium because they can threaten to strike. 
B) Minimum wage laws are most likely to raise the wages of unskilled workers. 
C) Employers may voluntarily pay more than the equilibrium wage to increase worker effort. 
D) Efficiency wages explain why more efficient workers earn more than less efficient workers.

Question 16

Which of the following factors does not affect the value of a worker's marginal product?

Accepted Answer

A) discrimination against a particular group of workers by a firm's customers 
B) a worker's level of human capital 
C) a worker's level of disposable income 
D) All of the above factors affect the value of a worker's marginal product. 
A) discrimination against a particular group of workers by a firm's customers 
B) a worker's level of human capital 
C) a worker's level of disposable income 
D) All of the above factors affect the value of a worker's marginal product.

Question 17

Discrimination is a reflection of some people's prejudice against certain groups in society.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements is true of wages,educational attainment,and gender?

Accepted Answer

A) Male workers are compensated for attending college, while female workers generally are not. 
B) Female workers are compensated for attending college, while male workers generally are not. 
C) Both genders receive a higher wage for attending college. 
D) Neither gender receives a higher wage for attending college. 
A) Male workers are compensated for attending college, while female workers generally are not. 
B) Female workers are compensated for attending college, while male workers generally are not. 
C) Both genders receive a higher wage for attending college. 
D) Neither gender receives a higher wage for attending college.

Question 19

The accumulation of investments in people,such as education and on the job training,is known as

Accepted Answer

A) physical capital. 
B) human capital. 
C) efficiency wage. 
D) a union. 
A) physical capital. 
B) human capital. 
C) efficiency wage. 
D) a union.

Question 20

The theory of efficiency wages suggests that firms may pay above-equilibrium wages

Accepted Answer

A) to reduce employee turnover. 
B) to prevent unions from recruiting members. 
C) to reduce the need for minimum wage laws. 
D) to increase the demand for better-skilled workers. 
A) to reduce employee turnover. 
B) to prevent unions from recruiting members. 
C) to reduce the need for minimum wage laws. 
D) to increase the demand for better-skilled workers.

Exam 19: Earnings and Discrimination

Evidence of differences in average wages of black workers compared to white workers

Studies of professional sports teams suggest that,in sports,racial discrimination is

In discussing discrimination and the wage differences that exist between men and women and between blacks and whites,it has been said that "the disease is political even if the symptom is economic." What does this mean?

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

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

Jane and John are twins who attended grammar school through college together.Jane and John both got jobs at a brokerage firm after graduating from college.They both work equally hard.Jane earns $43,000 a year,and John earns $69,000 a year.Select the best explanation for this wage difference.

Given that the median male is better paid than the median female,which of the following is not a valid explanation for wage differences?

Nemedia and Aquilonia have just started to trade with each other.Nemedia exports goods produced with skilled labor and imports goods made with unskilled labor from Aquilonia.Over time,we would expect that the wages of skilled labor in Nemedia will

In what way do competitive markets have a "natural remedy" for discriminatory hiring practices?

One hypothesis to explain the rising gap in wages between unskilled and skilled workers in the United States is that international trade has altered the relative demands for skilled and unskilled workers.

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

Economic theory of labor markets suggests that wages are governed by labor supply and labor demand.

Which of the following statements is not correct?

Which of the following factors does not affect the value of a worker's marginal product?

Discrimination is a reflection of some people's prejudice against certain groups in society.

Which of the following statements is true of wages,educational attainment,and gender?

The accumulation of investments in people,such as education and on the job training,is known as

The theory of efficiency wages suggests that firms may pay above-equilibrium wages

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

Filters