Question 1

A worker association that bargains with employers over wages and working conditions is called

Accepted Answer

A) a strike. 
B) an oligopoly. 
C) a firm. 
D) a union. 
A) a strike. 
B) an oligopoly. 
C) a firm. 
D) a union.

Question 2

Evidence of discrimination in labor markets

Accepted Answer

A) applies only to race and gender. 
B) is conclusively identified in large differences in average wages rates between men and women. 
C) is difficult to verify by reference to differences in average wage rates. 
D) is more easily identified on the basis of race than gender. 
A) applies only to race and gender. 
B) is conclusively identified in large differences in average wages rates between men and women. 
C) is difficult to verify by reference to differences in average wage rates. 
D) is more easily identified on the basis of race than gender.

Question 3

Which of the following statements accurately explains the superstar phenomenon in wages?

Accepted Answer

A) Better carpenters earn more than average carpenters because people are willing to pay higher prices for higher-quality work. 
B) Funnier comedians earn more than less funny comedians because they are more talented. 
C) Talented athletes earn more than equally talented plumbers because technology allows the delivery of the services provided by the athletes to all interested customers. 
D) Athletes get paid for performing services that everyday people perform as hobbies. 
A) Better carpenters earn more than average carpenters because people are willing to pay higher prices for higher-quality work. 
B) Funnier comedians earn more than less funny comedians because they are more talented. 
C) Talented athletes earn more than equally talented plumbers because technology allows the delivery of the services provided by the athletes to all interested customers. 
D) Athletes get paid for performing services that everyday people perform as hobbies.

Question 4

When differences in human capital among workers lead to discrimination,the differences are typically a result of social or political processes rather than economic processes.

Accepted Answer

A) True 
 B)False

Question 5

People who grew up in the western part of Aquilonia have an accent distinct from people who grew up in the eastern part of the country.People from the west also receive lower wages than people from the east.From this information alone,we can conclude that it is possible that

Accepted Answer

A) discrimination against people from the west exists. 
B) discrimination against people from the east exists. 
C) no discrimination exists. 
D) All of the above are correct. 
A) discrimination against people from the west exists. 
B) discrimination against people from the east exists. 
C) no discrimination exists. 
D) All of the above are correct.

Question 6

If firms are competitive,then labor-market discrimination

Accepted Answer

A) cannot exist in either the short run or the long run. 
B) will be more of a problem than if the market were monopolistic or imperfectly competitive. 
C) likely will not be a long-run problem unless customers exhibit discriminatory preferences or government maintains discriminatory policies. 
D) likely will be more of a problem in the long run than in the short run due to the zero-profit condition that characterizes long-run equilibrium for competitive firms. 
A) cannot exist in either the short run or the long run. 
B) will be more of a problem than if the market were monopolistic or imperfectly competitive. 
C) likely will not be a long-run problem unless customers exhibit discriminatory preferences or government maintains discriminatory policies. 
D) likely will be more of a problem in the long run than in the short run due to the zero-profit condition that characterizes long-run equilibrium for competitive firms.

Question 7

Which of the following is not an example of efficiency wages?

Accepted Answer

A) More productive workers are paid more to reflect their higher output. 
B) Higher wages induce higher output from workers. 
C) Better quality applicants apply for jobs that pay above-equilibrium wages. 
D) Workers are less likely to leave jobs that pay above-equilibrium wages. 
A) More productive workers are paid more to reflect their higher output. 
B) Higher wages induce higher output from workers. 
C) Better quality applicants apply for jobs that pay above-equilibrium wages. 
D) Workers are less likely to leave jobs that pay above-equilibrium wages.

Question 8

John is an Asian 23-year-old male,and Ken is an Asian 43-year-old male.Both John and Ken are economics majors,and they graduated from the same college with the same GPA - John in 2001 and Ken in 1981.John and Ken both are both financial advisers at the same brokerage firm.John earns $48,000 a year,and Ken earns $78,000 a year.Select the best explanation for this wage difference.

Accepted Answer

A) John has more human capital relative to Ken. 
B) John has less human capital relative to Ken. 
C) John has been discriminated against because he is young. 
D) Ken has been discriminated against because he is old. 
A) John has more human capital relative to Ken. 
B) John has less human capital relative to Ken. 
C) John has been discriminated against because he is young. 
D) Ken has been discriminated against because he is old.

Question 9

First grade teachers who work in Lynn,Massachusetts (a large,low income city north of Boston)public schools earn more than first grade teachers who work in private schools in more affluent communities north of Boston.Lynn teachers belong to a teachers' union.Which statement best explains the scenario described above?

Accepted Answer

A) Lynn school teachers receive a compensating differential because they work in a more difficult environment, and they receive higher than market equilibrium wages because they are members of a teachers' union. 
B) Lynn school teachers receive a compensating differential because they work in a more difficult environment, but they do not receive higher than market equilibrium wages because they are members of a teachers' union. 
C) Lynn school teachers do not receive a compensating differential because they work in a more difficult environment, but they do receive higher than market equilibrium wages because they are members of a teachers' union. 
D) Lynn school teachers do not receive a compensating differential because they work in a more difficult environment, and they do not receive higher than market equilibrium wages because they are members of a teachers' union. 
A) Lynn school teachers receive a compensating differential because they work in a more difficult environment, and they receive higher than market equilibrium wages because they are members of a teachers' union. 
B) Lynn school teachers receive a compensating differential because they work in a more difficult environment, but they do not receive higher than market equilibrium wages because they are members of a teachers' union. 
C) Lynn school teachers do not receive a compensating differential because they work in a more difficult environment, but they do receive higher than market equilibrium wages because they are members of a teachers' union. 
D) Lynn school teachers do not receive a compensating differential because they work in a more difficult environment, and they do not receive higher than market equilibrium wages because they are members of a teachers' union.

Question 10

The belief that education makes a person more productive and thereby raises his or her wage is referred to as the

Accepted Answer

A) compensating-differential view of education. 
B) natural-ability view of education. 
C) unmeasured-variables view of education. 
D) human-capital view of education. 
A) compensating-differential view of education. 
B) natural-ability view of education. 
C) unmeasured-variables view of education. 
D) human-capital view of education.

Question 11

Which of the following statements is correct?

Accepted Answer

A) Differences in human capital may explain differences in wages between blacks and whites. 
B) Racial discrimination is the strongest explanation for differences in wages between blacks and whites. 
C) Gender discrimination is the strongest explanation for differences in wages between blacks and whites. 
D) None of the above statements is correct. 
A) Differences in human capital may explain differences in wages between blacks and whites. 
B) Racial discrimination is the strongest explanation for differences in wages between blacks and whites. 
C) Gender discrimination is the strongest explanation for differences in wages between blacks and whites. 
D) None of the above statements is correct.

Question 12

A compensating differential refers to a difference in wages that arises from nonmonetary characteristics.

Accepted Answer

A) True 
 B)False

Question 13

The human capital theory explanation for why people invest in education has been challenged by a theory that suggests

Accepted Answer

A) schooling acts as a signal of ability. 
B) humans cannot be considered "capital." 
C) productivity is not linked to wages. 
D) college is largely a social phenomenon. 
A) schooling acts as a signal of ability. 
B) humans cannot be considered "capital." 
C) productivity is not linked to wages. 
D) college is largely a social phenomenon.

Question 14

If a worker is indifferent between a job with a wage of $12 per hour and a job with a wage of $15 per hour,then the

Accepted Answer

A) higher-paying job enjoys a compensating wage differential of $3 per hour. 
B) higher-paying job enjoys a compensating wage differential of $15 per hour. 
C) higher-paying job is intrinsically more attractive than the lower-paying job. 
D) worker's preferences are not rational. 
A) higher-paying job enjoys a compensating wage differential of $3 per hour. 
B) higher-paying job enjoys a compensating wage differential of $15 per hour. 
C) higher-paying job is intrinsically more attractive than the lower-paying job. 
D) worker's preferences are not rational.

Question 15

A study conducted by economists Marianne Bertrand and Sendhil Mullainathan found evidence of labor-market discrimination based on which of the following findings?

Accepted Answer

A) Restaurant customers preferred to be waited on by white waitresses than by black waitresses. 
B) Black basketball players earned more than white basketball players. 
C) Employers were more likely to request interviews from job applicants with "white" names such as Greg than from applicants with "black" names such as Jamal. 
D) Employers were more likely to request interviews from job applicants with "masculine" names such as Mark than from applicants with "feminine" names such as Lisa. 
A) Restaurant customers preferred to be waited on by white waitresses than by black waitresses. 
B) Black basketball players earned more than white basketball players. 
C) Employers were more likely to request interviews from job applicants with "white" names such as Greg than from applicants with "black" names such as Jamal. 
D) Employers were more likely to request interviews from job applicants with "masculine" names such as Mark than from applicants with "feminine" names such as Lisa.

Question 16

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers in the United States offer two main hypotheses.Both hypotheses

Accepted Answer

A) suggest that demand and supply conditions have played a less important role in determining workers' wages in recent years. 
B) suggest that, over time, the demand for skilled labor has risen relative to the demand for unskilled labor. 
C) emphasize the shrinking importance of international trade in recent years. 
D) emphasize the growing importance of women and teenagers in the workforce in recent years. 
A) suggest that demand and supply conditions have played a less important role in determining workers' wages in recent years. 
B) suggest that, over time, the demand for skilled labor has risen relative to the demand for unskilled labor. 
C) emphasize the shrinking importance of international trade in recent years. 
D) emphasize the growing importance of women and teenagers in the workforce in recent years.

Question 17

Politicians often point to average wage differentials as evidence of labor-market discrimination against ethnic minorities and women;however,economists argue against this approach because they don't trust any of the statistics quoted by the politicians.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements is not correct?

Accepted Answer

A) It is possible that additional education will increase a worker's wage without increasing the worker's productivity. 
B) If discriminating wage differentials persist in competitive markets, it is primarily because either consumers are willing to pay to maintain the discrimination or because government mandates it. 
C) An efficiency wage corresponds to a lower wage that a nondiscriminating employer pays to a worker because a discriminating employer won't hire her. 
D) In competitive markets, workers are paid a wage equal to the value of their marginal product. 
A) It is possible that additional education will increase a worker's wage without increasing the worker's productivity. 
B) If discriminating wage differentials persist in competitive markets, it is primarily because either consumers are willing to pay to maintain the discrimination or because government mandates it. 
C) An efficiency wage corresponds to a lower wage that a nondiscriminating employer pays to a worker because a discriminating employer won't hire her. 
D) In competitive markets, workers are paid a wage equal to the value of their marginal product.

Question 19

Which of the following is the most important source of human capital?

Accepted Answer

A) education 
B) effort 
C) chance 
D) physical strength 
A) education 
B) effort 
C) chance 
D) physical strength

Question 20

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

Accepted Answer

A) if the job in Africa has a lot of job satisfaction, the wage will be higher. 
B) if the job in Africa has a lot of job satisfaction, the wage will be lower. 
C) if the job cleaning motel rooms is disagreeable, the wage will be lower. 
D) Both a and c are correct. 
A) if the job in Africa has a lot of job satisfaction, the wage will be higher. 
B) if the job in Africa has a lot of job satisfaction, the wage will be lower. 
C) if the job cleaning motel rooms is disagreeable, the wage will be lower. 
D) Both a and c are correct.

Exam 19: Earnings and Discrimination

A worker association that bargains with employers over wages and working conditions is called

Evidence of discrimination in labor markets

Which of the following statements accurately explains the superstar phenomenon in wages?

When differences in human capital among workers lead to discrimination,the differences are typically a result of social or political processes rather than economic processes.

People who grew up in the western part of Aquilonia have an accent distinct from people who grew up in the eastern part of the country.People from the west also receive lower wages than people from the east.From this information alone,we can conclude that it is possible that

If firms are competitive,then labor-market discrimination

Which of the following is not an example of efficiency wages?

The belief that education makes a person more productive and thereby raises his or her wage is referred to as the

Which of the following statements is correct?

A compensating differential refers to a difference in wages that arises from nonmonetary characteristics.

The human capital theory explanation for why people invest in education has been challenged by a theory that suggests

If a worker is indifferent between a job with a wage of $12 per hour and a job with a wage of $15 per hour,then the

A study conducted by economists Marianne Bertrand and Sendhil Mullainathan found evidence of labor-market discrimination based on which of the following findings?

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers in the United States offer two main hypotheses.Both hypotheses

Politicians often point to average wage differentials as evidence of labor-market discrimination against ethnic minorities and women;however,economists argue against this approach because they don't trust any of the statistics quoted by the politicians.

Which of the following statements is not correct?

Which of the following is the most important source of human capital?

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