Question 1

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 2

If large numbers of young Americans thought the life of a cowhand was great (despite the hardships), we would expect

Accepted Answer

A) an increase in the wages of cowhands. 
B) a decrease in the wages of cowhands because supply would be enlarged. 
C) no impact on wages, which are determined by supply and demand, not preferences. 
D) a decrease in the wages of cowhands because demand would be reduced. 
A) an increase in the wages of cowhands. 
B) a decrease in the wages of cowhands because supply would be enlarged. 
C) no impact on wages, which are determined by supply and demand, not preferences. 
D) a decrease in the wages of cowhands because demand would be reduced.

Question 3

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 it

Question 4

Assume that empirical evidence shows a difference in mean earnings between two groups, say, majority and minority workers. What conclusion may be drawn?

Accepted Answer

A) The group with the lower earnings is being discriminated against. 
B) The group with the lower earnings is less productive. 
C) The group with the higher earnings has a larger quantity of human capital. 
D) Any of the above statements could, either partially or entirely, explain the difference in the mean earnings. 
A) The group with the lower earnings is being discriminated against. 
B) The group with the lower earnings is less productive. 
C) The group with the higher earnings has a larger quantity of human capital. 
D) Any of the above statements could, either partially or entirely, explain the difference in the mean earnings.

Question 5

In a market economy, which of the following is most important if one is going to achieve high earnings?

Accepted Answer

A) hard work 
B) provision of goods and/or services that others value highly 
C) having a graduate degree in a field like history or sociology 
D) membership in a labor union 
A) hard work 
B) provision of goods and/or services that others value highly 
C) having a graduate degree in a field like history or sociology 
D) membership in a labor union

Question 6

Which of the following would cause the demand for computer programmers to increase?

Accepted Answer

A) a decline in the productivity of computer programmers 
B) an increase in the productivity of computer programmers 
C) an increase in the wages of computer programmers due to legislative action (that is, the establishment of a price floor for computer programmers) 
D) a reduction in the price of a competitive input that can be substituted for computer programmers 
A) a decline in the productivity of computer programmers 
B) an increase in the productivity of computer programmers 
C) an increase in the wages of computer programmers due to legislative action (that is, the establishment of a price floor for computer programmers) 
D) a reduction in the price of a competitive input that can be substituted for computer programmers

Question 7

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 8

The linkage between high productivity and high earnings is vitally important because

Accepted Answer

A) it provides individuals with a strong incentive to develop skills and engage in activities that others value highly. 
B) high productivity (a large output per hour worked) is the key to high living standards. 
C) it brings the self-interest of individuals into harmony with economic progress. 
D) all of the above are true. 
A) it provides individuals with a strong incentive to develop skills and engage in activities that others value highly. 
B) high productivity (a large output per hour worked) is the key to high living standards. 
C) it brings the self-interest of individuals into harmony with economic progress. 
D) all of the above are true.

Question 9

Window cleaners that work the top floors of high-rise office buildings are, on average, paid approximately 30 percent more an hour than those that clean windows on the bottom floor. This is an example of

Accepted Answer

A) employment discrimination. 
B) non-pecuniary job benefits. 
C) irrational wage compensation. 
D) compensating wage differentials. 
A) employment discrimination. 
B) non-pecuniary job benefits. 
C) irrational wage compensation. 
D) compensating wage differentials.

Exam 13: Earnings, Productivity, and the Job Market

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

If large numbers of young Americans thought the life of a cowhand was great (despite the hardships), we would expect

Assume that empirical evidence shows a difference in mean earnings between two groups, say, majority and minority workers. What conclusion may be drawn?

In a market economy, which of the following is most important if one is going to achieve high earnings?

Which of the following would cause the demand for computer programmers to increase?

Economic models suggest that movie stars have salaries that

The linkage between high productivity and high earnings is vitally important because

Window cleaners that work the top floors of high-rise office buildings are, on average, paid approximately 30 percent more an hour than those that clean windows on the bottom floor. This is an example of

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

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