Question 1

The major determinant of an individual's income is

Accepted Answer

A) whether or not her family is wealthy. 
B) how well she gets along with her co-workers and boss. 
C) how productive she is combined with demand for what she produces. 
D) how much she enjoys the work. 
A) whether or not her family is wealthy. 
B) how well she gets along with her co-workers and boss. 
C) how productive she is combined with demand for what she produces. 
D) how much she enjoys the work.

Question 2

Which of the following is most likely to decrease the market wage rate in a job category?

Accepted Answer

A) The employer provides a generous pension plan. 
B) The work is widely viewed as safe and not stressful. 
C) The job is widely viewed as interesting and prestigious. 
D) all of the above 
A) The employer provides a generous pension plan. 
B) The work is widely viewed as safe and not stressful. 
C) The job is widely viewed as interesting and prestigious. 
D) all of the above

Question 3

Which of the following is most likely to cause the productivity of labor to increase?

Accepted Answer

A) higher money wages 
B) a higher rate of investment in human and nonhuman capital 
C) more flexible working hours and improved retirement plans 
D) an increase in the proportion of the workforce that belongs to a labor union 
A) higher money wages 
B) a higher rate of investment in human and nonhuman capital 
C) more flexible working hours and improved retirement plans 
D) an increase in the proportion of the workforce that belongs to a labor union

Question 4

In the late 1800s,Bernard made buggy whips.Their quality was such that people came from hundreds of miles to buy the whips.As mechanized transportation developed,horse-drawn buggies largely disappeared and so did the demand for Bernard's whips.Would Bernard have been better off if these new modes of transportation had never been invented?

Accepted Answer

While Bernard's case is a bit difficult,

Question 5

A compensation structure that generates much higher pay rates for the top performers,while those whose productivity is only a little lower receive substantially less compensation,is called

Accepted Answer

A) tournament pay. 
B) competing differentials. 
C) dueling executives. 
D) winner take all. 
A) tournament pay. 
B) competing differentials. 
C) dueling executives. 
D) winner take all.

Question 6

Happyland is a country devoted to consumption.The inhabitants spend all of their income on pleasurable things and virtually none on capital investment,human or otherwise.Seriousland is frugal,spending very little on consumption and a great deal on human and physical capital.Ten years from now,which country would you prefer to inhabit?

Accepted Answer

Clearly,Happyland cannot continue in its

Question 7

Which of the following would cause the demand for plumbers to decrease?

Accepted Answer

A) an increase in the productivity of plumbers 
B) a decline in the construction of housing 
C) a law that mandated higher wages for plumbers 
D) an increase in the number of plumbers who belong to a union 
A) an increase in the productivity of plumbers 
B) a decline in the construction of housing 
C) a law that mandated higher wages for plumbers 
D) an increase in the number of plumbers who belong to a union

Question 8

Economic models suggest that movie stars have salaries that

Accepted Answer

A) greatly exceed their marginal contribution to the movie studio's revenue. 
B) understate their full contribution to the movie studio's revenue-as the celebrities are the main reason that people go to see movies. 
C) are about equal to their marginal revenue products. 
D) can only be explained by looking at specific movie stars and their individual salaries. 
A) greatly exceed their marginal contribution to the movie studio's revenue. 
B) understate their full contribution to the movie studio's revenue-as the celebrities are the main reason that people go to see movies. 
C) are about equal to their marginal revenue products. 
D) can only be explained by looking at specific movie stars and their individual salaries.

Question 9

Which of the following is true?

Accepted Answer

A) The majority of millionaires received most of their wealth through an inheritance. 
B) The percentage of the population that are millionaires in inflation-adjusted dollars has been stable since the 1970s. 
C) About one-third of millionaires have college degrees. 
D) More than 75 percent of American millionaires have college degrees. 
A) The majority of millionaires received most of their wealth through an inheritance. 
B) The percentage of the population that are millionaires in inflation-adjusted dollars has been stable since the 1970s. 
C) About one-third of millionaires have college degrees. 
D) More than 75 percent of American millionaires have college degrees.

Question 10

Economic theory suggests that the standard of living of American workers would rise if

Accepted Answer

A) the minimum wage were doubled. 
B) automation were outlawed. 
C) workers were forced to retire earlier. 
D) technological improvements increased output per worker-hour. 
A) the minimum wage were doubled. 
B) automation were outlawed. 
C) workers were forced to retire earlier. 
D) technological improvements increased output per worker-hour.

Question 11

Economic studies have generally found that professional sports players have salaries that

Accepted Answer

A) greatly exceed their marginal contribution to a team's revenue stream. 
B) are approximately equal to their marginal revenue products. 
C) are about one-half of what they contribute to a team's profitability. 
D) are less than one-tenth of their marginal revenue products. 
A) greatly exceed their marginal contribution to a team's revenue stream. 
B) are approximately equal to their marginal revenue products. 
C) are about one-half of what they contribute to a team's profitability. 
D) are less than one-tenth of their marginal revenue products.

Question 12

Wages in the United States are higher than those in India primarily because

Accepted Answer

A) the weather is better in the United States. 
B) a larger proportion of the labor force is unionized in the United States. 
C) less capital per employee is required in the United States. 
D) the human and physical capital of American workers exceeds that of their Indian counterparts. 
A) the weather is better in the United States. 
B) a larger proportion of the labor force is unionized in the United States. 
C) less capital per employee is required in the United States. 
D) the human and physical capital of American workers exceeds that of their Indian counterparts.

Question 13

Automated production methods are only attractive when they

Accepted Answer

A) are undertaken in heavily unionized sectors of the economy. 
B) reduce per-unit costs. 
C) replace workers. 
D) decrease labor productivity. 
A) are undertaken in heavily unionized sectors of the economy. 
B) reduce per-unit costs. 
C) replace workers. 
D) decrease labor productivity.

Question 14

Joanne states: "The best way to increase the wages of workers is to increase worker productivity." Is Joanne correct? Why or why not?

Accepted Answer

Joanne is correct.High product

Question 15

What is the most probable reason why garbage collectors have higher wages than bookkeepers?

Accepted Answer

A) Employment discrimination 
B) A high unionization rate for bookkeepers 
C) A higher educational requirement for garbage collectors than bookkeepers 
D) The nonmonetary attractiveness of garbage collection causes fewer people to want to be garbage collectors. 
A) Employment discrimination 
B) A high unionization rate for bookkeepers 
C) A higher educational requirement for garbage collectors than bookkeepers 
D) The nonmonetary attractiveness of garbage collection causes fewer people to want to be garbage collectors.

Question 16

Suppose the mean earnings of two groups differ.Which of the following would be the logical conclusion?

Accepted Answer

A) The group with the lowest earnings must be the victim of employment discrimination. 
B) The group with the lowest earnings must be less productive. 
C) The group with the highest earnings is more highly motivated and materialistic. 
D) Without consideration of preferences and productivity factors,differences in unadjusted mean earnings do not necessarily reflect employment discrimination. 
A) The group with the lowest earnings must be the victim of employment discrimination. 
B) The group with the lowest earnings must be less productive. 
C) The group with the highest earnings is more highly motivated and materialistic. 
D) Without consideration of preferences and productivity factors,differences in unadjusted mean earnings do not necessarily reflect employment discrimination.

Question 17

Which of the following could be an institutional barrier to employment?

Accepted Answer

A) licensing requirements 
B) labor unions 
C) minimum wages 
D) all of the above 
A) licensing requirements 
B) labor unions 
C) minimum wages 
D) all of the above

Question 18

If carpentry positions A and B required identical skill levels,other things constant,which one of the following would most likely elevate the wage rate of position A relative to position B?

Accepted Answer

A) The work place of position A is in the intense heat of the sun,whereas the work place of B is air-conditioned. 
B) Position A is a safe office job;position B requires the employee to operate a dangerous saw. 
C) Position A offers steady employment,whereas employees holding position B are often laid off. 
D) Position A offers more sick leave and more paid holidays. 
A) The work place of position A is in the intense heat of the sun,whereas the work place of B is air-conditioned. 
B) Position A is a safe office job;position B requires the employee to operate a dangerous saw. 
C) Position A offers steady employment,whereas employees holding position B are often laid off. 
D) Position A offers more sick leave and more paid holidays.

Question 19

Wages in the United States are higher than those in Mexico primarily because

Accepted Answer

A) output per worker is higher in Mexico than in the United States. 
B) output per worker is higher in the United States. 
C) the human and physical capital of American workers is lower than that of their Mexican counterparts. 
D) all of the above are correct. 
A) output per worker is higher in Mexico than in the United States. 
B) output per worker is higher in the United States. 
C) the human and physical capital of American workers is lower than that of their Mexican counterparts. 
D) all of the above are correct.

Question 20

The earnings of all employees in a competitive economy would be equal if

Accepted Answer

A) all individuals were homogeneous. 
B) all jobs were equally attractive. 
C) workers were perfectly mobile among jobs. 
D) all of the above are true. 
A) all individuals were homogeneous. 
B) all jobs were equally attractive. 
C) workers were perfectly mobile among jobs. 
D) all of the above are true.

Exam 26: Earnings, productivity, and the Job Market

The major determinant of an individual's income is

Which of the following is most likely to decrease the market wage rate in a job category?

Which of the following is most likely to cause the productivity of labor to increase?

A compensation structure that generates much higher pay rates for the top performers,while those whose productivity is only a little lower receive substantially less compensation,is called

Which of the following would cause the demand for plumbers to decrease?

Economic models suggest that movie stars have salaries that

Which of the following is true?

Economic theory suggests that the standard of living of American workers would rise if

Economic studies have generally found that professional sports players have salaries that

Wages in the United States are higher than those in India primarily because

Automated production methods are only attractive when they

Joanne states: "The best way to increase the wages of workers is to increase worker productivity." Is Joanne correct? Why or why not?

What is the most probable reason why garbage collectors have higher wages than bookkeepers?

Suppose the mean earnings of two groups differ.Which of the following would be the logical conclusion?

Which of the following could be an institutional barrier to employment?

If carpentry positions A and B required identical skill levels,other things constant,which one of the following would most likely elevate the wage rate of position A relative to position B?

Wages in the United States are higher than those in Mexico primarily because

The earnings of all employees in a competitive economy would be equal if

The Economic Approach

Asome Tools of the Economist

Asupply,demand,and the Market Process

Asupply and Demand: Applications and Extensions

Difficult Cases for the Market and the Role of Government

The Economics of Collective Decision-Making

Ataking the Nations Economic Pulse

Economic Fluctuations, unemployment, and Inflation

Aan Introduction to Basic Macroeconomic Markets

Dynamic Change, economic Fluctuations, and the Ad-As Model

Fiscal Policy: the Keynesian View and Historical Perspective

Fiscal Policy, incentives, and Secondary Effects

Amoney and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, output, and Employment

Creating an Environment for Growth and Prosperity

Institutions,policies,and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Consumer Choice and Elasticity

Acosts and the Supply of Goods

Aprice Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Aprice-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Government Spending and Taxation

The Economics of Social Security

The Stock Market: Its Function, Performance, and Potential As an Investment Opportunity

Great Debates in Economics: Keynes Versus Hayek

The Crisis of 2008: Causes and Lessons for the Future

Lessons From the Great Depression

Lessons From Japan and Canada

The Federal Budget and the National Debt

The Economics of Healthcare

Education: Problems and Performance

Earnings Differences Between Men and Women

Do Labor Unions Increase the Wages of Workers

The Question of Resource Exhaustion

Difficult Environmental Cases and the Role of Government

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