Exam 19: Earnings and Discrimination

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 consumers do not discriminate between bald barbers and barbers with hair,then

In the early twentieth century,racial segregation of streetcars in the southern cities was largely opposed by

Which of the following examples best illustrates a compensating wage differential?

Minimum-wage laws (i) have little or no effect on many workers' wages. (ii) create above-equilibrium wages for some unskilled workers. (iii) create a shortage of unskilled labor.

The human-capital theory of education maintains that workers who complete specific levels of education enhance their productivity through education.

Some discriminatory hiring practices can be expected,even if markets are competitive,as a result of

If an employer's behavior is supportive of the theory of efficiency wages,the employer would raise wages in an effort to (i) increase worker effort. (ii) decrease worker turnover. (iii) raise the quality of workers that apply for jobs at the firm.

The fact that movie star Julia Roberts' salary is much higher than the salary earned by a Nobel prize winning economics professor can best be explained by the

Wage differences that can't be explained by the number of years of training are likely to result from factors associated with

Which of the following represents an example of labor-market discrimination? (i) An employer is more likely to grant an interview to a woman with a traditionally "white" name such as Emily than to a woman with a traditionally "black" name such as Lakisha. (ii) An employer is more likely to grant an interview to person with a traditionally "masculine" name such as "Alex" than to a person with a traditionally "feminine" name such as "Emily." (iii) An employer is more likely to grant an interview to a person graduating from Yale than from the local community college. (iv) An employer is more likely to grant an interview to a person graduating with a physics major than with a physical education major.

One reason why better-looking workers may have higher earnings is that physical attractiveness is correlated with intelligence.

Which of the following comparisons best illustrates a compensating differential?

People are willing to invest in human capital because

The number of American workers employed in the manufacturing sector has

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

Evidence suggests that business owners are generally

A recent study of the determinants of wages for clerical staff at a state university found that years of schooling,years of experience,age and job characteristics only explained about one-half of the difference in wages.Describe other factors that may be important in explaining wages differences for clerical staff.

Scenario 19-1 Ferris B., 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 lifeguards to patrol the beach at an exclusive island resort in the Caribbean. Recruiter B is looking for workers to staff positions at a summer youth camp. -Refer to Scenario 19-1.Ferris is carefully considering the options that each recruiter presents.On the basis of knowledge obtained in his economics class,Ferris concludes that

The United States is losing manufacturing jobs to countries like China and India,where manufacturing jobs have increased 30 percent since 1995.

In a labor market free from discrimination,wages for workers that are employed by the same company will still differ.