Question 1

The real wages of workers will tend to be high when

Accepted Answer

A) output per worker is high. 
B) capital is scarce. 
C) industries are automating at a slow rate. 
D) profits are low. 
A) output per worker is high. 
B) capital is scarce. 
C) industries are automating at a slow rate. 
D) profits are low.

Question 2

Which of the following is true?

Accepted Answer

A) Employers who discriminate against blacks and other minorities will have lower costs than rival firms that hire employees strictly on the basis of merit (productivity). 
B) After adjusting for factors such as education, experience, and location, the earnings of black men are almost identical to the earnings of similar white men. 
C) If employers can hire equally productive minority employees at a lower wage than non-minorities, the profit motive provides a strong incentive to do so. 
D) The empirical evidence indicates that the earnings gap between whites and blacks is entirely the result of employment discrimination. 
A) Employers who discriminate against blacks and other minorities will have lower costs than rival firms that hire employees strictly on the basis of merit (productivity). 
B) After adjusting for factors such as education, experience, and location, the earnings of black men are almost identical to the earnings of similar white men. 
C) If employers can hire equally productive minority employees at a lower wage than non-minorities, the profit motive provides a strong incentive to do so. 
D) The empirical evidence indicates that the earnings gap between whites and blacks is entirely the result of employment discrimination.

Question 3

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 4

Evidence suggests that education raises the earnings of the workforce mainly by

Accepted Answer

A) increasing the marginal productivity of labor. 
B) keeping young people out of the labor force, thereby reducing the supply of labor. 
C) teaching workers how to demand more pay. 
D) teaching people to read and write, although education beyond this point does not seem to increase worker productivity. 
A) increasing the marginal productivity of labor. 
B) keeping young people out of the labor force, thereby reducing the supply of labor. 
C) teaching workers how to demand more pay. 
D) teaching people to read and write, although education beyond this point does not seem to increase worker productivity.

Question 5

The difference between the earnings of construction workers who work on bridges and skyscrapers and those who work on highways is most likely due to

Accepted Answer

A) differences in education requirements. 
B) differences in unionization rates. 
C) a compensating differential. 
D) apprenticeship requirements. 
A) differences in education requirements. 
B) differences in unionization rates. 
C) a compensating differential. 
D) apprenticeship requirements.

Question 6

Which of the following is the clearest evidence of employment discrimination against minority employees?

Accepted Answer

A) the average wage of minority workers is lower than the average wage of whites. 
B) the average hours worked by minority employees exceeds the hours worked by whites. 
C) the mean number of years of schooling of minority workers is lower than that of whites. 
D) the average wages of minority employees are lower than the average wages of whites with similar productivity characteristics. 
A) the average wage of minority workers is lower than the average wage of whites. 
B) the average hours worked by minority employees exceeds the hours worked by whites. 
C) the mean number of years of schooling of minority workers is lower than that of whites. 
D) the average wages of minority employees are lower than the average wages of whites with similar productivity characteristics.

Question 7

The fact that wage differentials continue to exist across different groups of workers leads economists to believe that

Accepted Answer

A) discrimination by customers is the most common type of economic discrimination. 
B) differences in human capital and job characteristics must be important in explaining the differences in wages. 
C) firms apparently are not profit maximizers. 
D) the market has failed to properly allocate wages to different workers. 
A) discrimination by customers is the most common type of economic discrimination. 
B) differences in human capital and job characteristics must be important in explaining the differences in wages. 
C) firms apparently are not profit maximizers. 
D) the market has failed to properly allocate wages to different workers.

Question 8

Which one of the following is most likely to reduce the mobility of labor between jobs?

Accepted Answer

A) an increase in the minimum wage 
B) legislation relaxing licensing requirements for entry into many occupations 
C) the taxation of unemployment compensation in the same manner as income from other sources 
D) both b and c above 
A) an increase in the minimum wage 
B) legislation relaxing licensing requirements for entry into many occupations 
C) the taxation of unemployment compensation in the same manner as income from other sources 
D) both b and c above

Question 9

Which of the following would cause the demand for mathematicians to increase?

Accepted Answer

A) a decrease in the productivity of mathematicians. 
B) an increase in the wage of mathematicians. 
C) an increase in the productivity of mathematicians. 
D) an increase in the productivity of physicists. 
A) a decrease in the productivity of mathematicians. 
B) an increase in the wage of mathematicians. 
C) an increase in the productivity of mathematicians. 
D) an increase in the productivity of physicists.

Question 10

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 11

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 12

Millionaires tend to be older than the general population because

Accepted Answer

A) older workers generally have more education than younger workers. 
B) many achieve millionaire status by saving from a relatively modest income, and this will take a lengthy period of time. 
C) the earnings of most people peak during the retirement phase of life. 
D) older people have less to do, and therefore, they have more time to come up with innovative ideas. 
A) older workers generally have more education than younger workers. 
B) many achieve millionaire status by saving from a relatively modest income, and this will take a lengthy period of time. 
C) the earnings of most people peak during the retirement phase of life. 
D) older people have less to do, and therefore, they have more time to come up with innovative ideas.

Question 13

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 14

(I) Differences in worker productivity are one major reason why individual earnings differ. (II) Even if all workers were identical, differences in the desirability of jobs would still cause earnings differentials.

Accepted Answer

A) Both I and II are true. 
B) I is true; II is false. 
C) I is false; II is true. 
D) Both I and II are false. 
A) Both I and II are true. 
B) I is true; II is false. 
C) I is false; II is true. 
D) Both I and II are false.

Question 15

Working conditions, prestige, variety, location, employee freedom, and employee responsibilities are all examples of

Accepted Answer

A) the tools of employment discrimination. 
B) sociological factors affecting employment. 
C) pecuniary job characteristics. 
D) non-pecuniary job characteristics. 
A) the tools of employment discrimination. 
B) sociological factors affecting employment. 
C) pecuniary job characteristics. 
D) non-pecuniary job characteristics.

Question 16

When employment discrimination results from the personal prejudices of employers, economic theory suggests that

Accepted Answer

A) it is costless for employers to discriminate against groups they do not like. 
B) the wages of employees who are discriminated against will actually rise. 
C) an employer who discriminates will experience higher costs. 
D) discrimination by an employer will reduce production costs since the employer can pay lower wages. 
A) it is costless for employers to discriminate against groups they do not like. 
B) the wages of employees who are discriminated against will actually rise. 
C) an employer who discriminates will experience higher costs. 
D) discrimination by an employer will reduce production costs since the employer can pay lower wages.

Question 17

Which of the following is true?

Accepted Answer

A) employers who discriminate against blacks and other minorities will have lower costs than rival firms that hire employees strictly on the basis of productivity. 
B) after adjusting for factors such as education, experience, and location, the earnings of black men are almost identical to the earnings of white men. 
C) if minority and white employees in a skill category are equally productive, the profit motive provides employers with a strong incentive to hire minority employees if they are available at a lower wage. 
D) the empirical evidence indicates that the earnings gap between whites and blacks is entirely the result of worker preference. 
A) employers who discriminate against blacks and other minorities will have lower costs than rival firms that hire employees strictly on the basis of productivity. 
B) after adjusting for factors such as education, experience, and location, the earnings of black men are almost identical to the earnings of white men. 
C) if minority and white employees in a skill category are equally productive, the profit motive provides employers with a strong incentive to hire minority employees if they are available at a lower wage. 
D) the empirical evidence indicates that the earnings gap between whites and blacks is entirely the result of worker preference.

Question 18

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 19

Assume that Burger King employees work in an air-conditioned environment while McDonalds employees do not. Other things equal, you would expect wages to be ____ in Burger King because ____.

Accepted Answer

A) higher; Burger King employees are more productive 
B) lower; McDonald's employees are more productive 
C) higher; Burger King is a more prestigious place to work 
D) lower; Burger King has more favorable working conditions 
A) higher; Burger King employees are more productive 
B) lower; McDonald's employees are more productive 
C) higher; Burger King is a more prestigious place to work 
D) lower; Burger King has more favorable working conditions

Question 20

Within an occupation, when a given job provides steadier work (fewer layoffs), the hourly wage tends to be

Accepted Answer

A) lower than wage rates in jobs that are otherwise similar. 
B) higher than wage rates in jobs that are otherwise similar. 
C) no different from wage rates in jobs that are otherwise similar. 
D) determined by factors other than supply and demand. 
A) lower than wage rates in jobs that are otherwise similar. 
B) higher than wage rates in jobs that are otherwise similar. 
C) no different from wage rates in jobs that are otherwise similar. 
D) determined by factors other than supply and demand.

Exam 13: Earnings, Productivity, and the Job Market

The real wages of workers will tend to be high when

Which of the following is true?

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

Evidence suggests that education raises the earnings of the workforce mainly by

The difference between the earnings of construction workers who work on bridges and skyscrapers and those who work on highways is most likely due to

Which of the following is the clearest evidence of employment discrimination against minority employees?

The fact that wage differentials continue to exist across different groups of workers leads economists to believe that

Which one of the following is most likely to reduce the mobility of labor between jobs?

Which of the following would cause the demand for mathematicians to increase?

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

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

Millionaires tend to be older than the general population because

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

(I) Differences in worker productivity are one major reason why individual earnings differ. (II) Even if all workers were identical, differences in the desirability of jobs would still cause earnings differentials.

Working conditions, prestige, variety, location, employee freedom, and employee responsibilities are all examples of

When employment discrimination results from the personal prejudices of employers, economic theory suggests that

Which of the following is true?

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

Assume that Burger King employees work in an air-conditioned environment while McDonalds employees do not. Other things equal, you would expect wages to be ____ in Burger King because ____.

Within an occupation, when a given job provides steadier work (fewer layoffs), the hourly wage tends to be

The Economic Approach

A: Some Tools of the Economist

B: Some Tools of the Economist

A: Supply, Demand, and the Market Process

B: Supply, Demand, and the Market Process

A: Supply and Demand: Applications and Extensions

B: Supply and Demand: Applications and Extensions

Difficult Cases for the Market and the Role of Government

The Economics of Collective Decision-Making

Consumer Choice and Elasticity

A: Costs and the Supply of Goods

B: Costs and the Supply of Goods

A: Price Takers and the Competitive Process

B: Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

A: Price-Searcher Markets With High Entry Barriers

B: Price-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

Appendix: Government Spending and Taxation

Appendix: the Economics of Social Security

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

Appendix: Great Debates in Economics: Keynes Versus Hayek

Appendix: the Crisis of 2008: Causes and Lessons for the Future

Appendix: Lessons From the Great Depression

Appendix: the Economics of Healthcare

Appendix:education: Problems and Performance

Appendix: Earnings Differences Between Men and Women

Appendix: the Question of Resource Exhaustion

Appendix: Do Labor Unions Increase the Wages of Workers

Appendix: Difficult Environmental Cases and the Role of Government

Filters

Assume that Burger King employees work in an air-conditioned environment while McDonalds employees do not. Other things equal, you would expect wages to be in Burger King because .