Question 1

In 2013, approximately what percent of adults in the United States had not graduated from high school?

Accepted Answer

A) 2% 
B) 5% 
C) 10% 
D) 15% 
E) 20% 
A) 2% 
B) 5% 
C) 10% 
D) 15% 
E) 20% C

Question 2

If ability is positively related to schooling, then estimating the returns to education directly from the wage-schooling profile will likely

Accepted Answer

A) under-estimate the return to schooling. 
B) over-estimate the return to schooling. 
C) under-estimate the average wage. 
D) over-estimate the average wage. 
E) under-estimate the average discount rate. 
A) under-estimate the return to schooling. 
B) over-estimate the return to schooling. 
C) under-estimate the average wage. 
D) over-estimate the average wage. 
E) under-estimate the average discount rate. B

Question 3

Suppose Amy has 100 efficiency units of labor; Bill has 50 efficiency units of labor; and Chris has 20 efficiency units of labor. Which of the following is true?

Accepted Answer

A) A firm will always hire Amy over Chris, regardless of wages. 
B) A firm will hire Amy if her wage is at least twice that of Bill's and at least five times that of Chris's. 
C) A firm will hire Amy if her wage is at most double that of Bill's and at most five times that of Chris's. 
D) A firm will never hire Bill, regardless of wages. 
E) A firm will never hire Chris, regardless of wages. 
A) A firm will always hire Amy over Chris, regardless of wages. 
B) A firm will hire Amy if her wage is at least twice that of Bill's and at least five times that of Chris's. 
C) A firm will hire Amy if her wage is at most double that of Bill's and at most five times that of Chris's. 
D) A firm will never hire Bill, regardless of wages. 
E) A firm will never hire Chris, regardless of wages. C

Question 4

What is an example of specific job training?

Accepted Answer

A) Learning word-processing skills. 
B) Learning how to use the firm's payroll system. 
C) Obtaining a GED. 
D) Becoming stronger. 
E) Passing the CPA exam. 
A) Learning word-processing skills. 
B) Learning how to use the firm's payroll system. 
C) Obtaining a GED. 
D) Becoming stronger. 
E) Passing the CPA exam.

Question 5

Labor force participation rates tend to

Accepted Answer

A) increase with education level for both men and women. 
B) decrease with education level for both men and women. 
C) decrease with education level for men but increase with education level for women. 
D) be unrelated to education level for both men and women. 
E) be unrelated to education level for men but increase with education level for women. 
A) increase with education level for both men and women. 
B) decrease with education level for both men and women. 
C) decrease with education level for men but increase with education level for women. 
D) be unrelated to education level for both men and women. 
E) be unrelated to education level for men but increase with education level for women.

Question 6

The slope of the wage-schooling locus provides an estimate of

Accepted Answer

A) the average years of education as a function of age. 
B) the average wage or salary of workers for a given level of schooling. 
C) the economic return to an additional year of schooling. 
D) the economic cost of an additional year of schooling. 
E) the marginal cost of an additional year of schooling. 
A) the average years of education as a function of age. 
B) the average wage or salary of workers for a given level of schooling. 
C) the economic return to an additional year of schooling. 
D) the economic cost of an additional year of schooling. 
E) the marginal cost of an additional year of schooling.

Question 7

Why do workers typically pursue their education while young?

Accepted Answer

A) Because there is more time to benefit from the higher wages that are typically associated with more education. 
B) Because all of their friends pursue education while young. 
C) Because living expenses are low for a younger person. 
D) Because parents force their children to attend college immediately after high school. 
E) Because they are more likely to receive a scholarship. 
A) Because there is more time to benefit from the higher wages that are typically associated with more education. 
B) Because all of their friends pursue education while young. 
C) Because living expenses are low for a younger person. 
D) Because parents force their children to attend college immediately after high school. 
E) Because they are more likely to receive a scholarship.

Question 8

Why might people choose to go to college?

Accepted Answer

A) Because a college education signals to firms that the worker is highly motivated. 
B) Because a college education increases one's productivity, which will be rewarded in the labor market with higher wages. 
C) Because someone enjoys the process of becoming educated. 
D) Because one cannot find employment. 
E) All of the above. 
A) Because a college education signals to firms that the worker is highly motivated. 
B) Because a college education increases one's productivity, which will be rewarded in the labor market with higher wages. 
C) Because someone enjoys the process of becoming educated. 
D) Because one cannot find employment. 
E) All of the above.

Question 9

What is the main selection issue researchers must address when trying to estimate the effectiveness of government training programs?

Accepted Answer

A) The true cost of government training programs is unknown because unemployed workers also receive welfare benefits. 
B) The most motivated unemployed workers are the ones who are also most likely to take advantage of government training programs. 
C) Government training programs are usually geared toward developing general skills rather than providing specific job training. 
D) Most government training programs are only offered to the unemployed and not to workers who would like to switch jobs. 
E) Evaluation schemes tend to lose track of participants once they start a new job after the training. 
A) The true cost of government training programs is unknown because unemployed workers also receive welfare benefits. 
B) The most motivated unemployed workers are the ones who are also most likely to take advantage of government training programs. 
C) Government training programs are usually geared toward developing general skills rather than providing specific job training. 
D) Most government training programs are only offered to the unemployed and not to workers who would like to switch jobs. 
E) Evaluation schemes tend to lose track of participants once they start a new job after the training.

Question 10

Present value calculations allow one to determine

Accepted Answer

A) the return to an uncertain asset. 
B) the present-day costs and/or benefits of various options. 
C) the utility value of a particular option. 
D) the social cost of financial calculations. 
E) the real wage. 
A) the return to an uncertain asset. 
B) the present-day costs and/or benefits of various options. 
C) the utility value of a particular option. 
D) the social cost of financial calculations. 
E) the real wage.

Question 11

The wage-schooling locus is

Accepted Answer

A) downward sloping because education is generally productive. 
B) upward sloping because education is generally productive. 
C) backward bending. 
D) horizontal because wages are unrelated to schooling. 
E) vertical because education is a public good. 
A) downward sloping because education is generally productive. 
B) upward sloping because education is generally productive. 
C) backward bending. 
D) horizontal because wages are unrelated to schooling. 
E) vertical because education is a public good.

Question 12

What is the stopping rule for choosing one's years of schooling?

Accepted Answer

A) End one's schooling when the return from more schooling is zero. 
B) End one's schooling when the cost of one more year of schooling is zero. 
C) End one's schooling after college. 
D) End one's schooling when the rate of return to one more year of schooling equals the worker's rate of discount. 
E) End one's schooling when the worker's rate of discount equals zero. 
A) End one's schooling when the return from more schooling is zero. 
B) End one's schooling when the cost of one more year of schooling is zero. 
C) End one's schooling after college. 
D) End one's schooling when the rate of return to one more year of schooling equals the worker's rate of discount. 
E) End one's schooling when the worker's rate of discount equals zero.

Question 13

In 2013, approximately what percent of adults in the United States had received more education than a high school degree?

Accepted Answer

A) 15% 
B) 25% 
C) 35% 
D) 60% 
E) 90% 
A) 15% 
B) 25% 
C) 35% 
D) 60% 
E) 90%

Question 14

What is an example of general job training?

Accepted Answer

A) Learning how to use a forklift. 
B) Learning how to weld. 
C) Reading a book on techniques for managing large groups of workers involved on team projects. 
D) Attending an industry convention on "best practices." 
E) All of the above. 
A) Learning how to use a forklift. 
B) Learning how to weld. 
C) Reading a book on techniques for managing large groups of workers involved on team projects. 
D) Attending an industry convention on "best practices." 
E) All of the above.

Question 15

Why is it that a firm will typically not pay for general training?

Accepted Answer

A) General training is free. 
B) General training is too expensive. 
C) The benefits of general training depreciate quickly. 
D) General training usually doesn't increase worker productivity. 
E) The skills gained from the general training are transferable to other firms. 
A) General training is free. 
B) General training is too expensive. 
C) The benefits of general training depreciate quickly. 
D) General training usually doesn't increase worker productivity. 
E) The skills gained from the general training are transferable to other firms.

Question 16

What does not enter into the present value calculation of a college degree?

Accepted Answer

A) The cost of college tuition. 
B) The cost of books. 
C) Wages of college graduates. 
D) Lifetime wages of non-college graduates. 
E) The value of one's scholarships. 
A) The cost of college tuition. 
B) The cost of books. 
C) Wages of college graduates. 
D) Lifetime wages of non-college graduates. 
E) The value of one's scholarships.

Question 17

Temporary layoffs are common in the United States especially among workers who are heavily invested with specific training. Why?

Accepted Answer

A) Specific training deteriorates quickly, so a laid-off worker with specific training is not valuable to any firm. 
B) The laid-off worker with specific training is more valuable to the firm that laid her off than she is to any other firm. Thus, it is in the worker's best interest to remain unemployed until recalled to work at her original firm. 
C) Workers without specific training are never hired in the first place. 
D) Workers with specific training know they don't need to work hard when employed. 
E) Unemployment benefits are tied to specific training. 
A) Specific training deteriorates quickly, so a laid-off worker with specific training is not valuable to any firm. 
B) The laid-off worker with specific training is more valuable to the firm that laid her off than she is to any other firm. Thus, it is in the worker's best interest to remain unemployed until recalled to work at her original firm. 
C) Workers without specific training are never hired in the first place. 
D) Workers with specific training know they don't need to work hard when employed. 
E) Unemployment benefits are tied to specific training.

Question 18

In order to use schooling as a signal:

Accepted Answer

A) The signal must be more costly for low-skilled workers than for high-skilled workers. 
B) The cost of purchasing the signal must not be so costly that high-skilled workers don't value obtaining it. 
C) Firms must be able to easily verify each worker's amount of schooling. 
D) Some people must choose to not complete schooling. 
E) All of the above are required for schooling to serve as a signal. 
A) The signal must be more costly for low-skilled workers than for high-skilled workers. 
B) The cost of purchasing the signal must not be so costly that high-skilled workers don't value obtaining it. 
C) Firms must be able to easily verify each worker's amount of schooling. 
D) Some people must choose to not complete schooling. 
E) All of the above are required for schooling to serve as a signal.

Question 19

Suppose all 18-year-olds are identical in every way except that some have easy access to credit (i.e., they face a low interest rate when borrowing money) while others have a difficult time accessing credit (i.e., they face a high interest rate when borrowing money). Which of the following statements is not true?

Accepted Answer

A) Those who have easy access to credit have a lower rate of discount than those who do not have easy access to credit. 
B) Those who have easy access to credit will be more likely to go to college than those who do not have easy access to credit. 
C) The present value calculation of college will be higher for those who have easy access to credit than for those who do not have easy access to credit. 
D) Some people who have easy access to credit will not go to college. 
E) No one without easy access to credit will go to college. 
A) Those who have easy access to credit have a lower rate of discount than those who do not have easy access to credit. 
B) Those who have easy access to credit will be more likely to go to college than those who do not have easy access to credit. 
C) The present value calculation of college will be higher for those who have easy access to credit than for those who do not have easy access to credit. 
D) Some people who have easy access to credit will not go to college. 
E) No one without easy access to credit will go to college.

Question 20

People decide how much schooling to receive based on:

Accepted Answer

A) Their discount rate. 
B) The marginal rate of return to schooling. 
C) The present value of expected future earnings. 
D) Their ability to succeed in education programs. 
E) All of the above factors influence how much schooling one receives. 
A) Their discount rate. 
B) The marginal rate of return to schooling. 
C) The present value of expected future earnings. 
D) Their ability to succeed in education programs. 
E) All of the above factors influence how much schooling one receives.

In 2013, approximately what percent of adults in the United States had not graduated from high school?

If ability is positively related to schooling, then estimating the returns to education directly from the wage-schooling profile will likely

Suppose Amy has 100 efficiency units of labor; Bill has 50 efficiency units of labor; and Chris has 20 efficiency units of labor. Which of the following is true?

What is an example of specific job training?

Labor force participation rates tend to

The slope of the wage-schooling locus provides an estimate of

Why do workers typically pursue their education while young?

Why might people choose to go to college?

What is the main selection issue researchers must address when trying to estimate the effectiveness of government training programs?

Present value calculations allow one to determine

The wage-schooling locus is

What is the stopping rule for choosing one's years of schooling?

In 2013, approximately what percent of adults in the United States had received more education than a high school degree?

What is an example of general job training?

Why is it that a firm will typically not pay for general training?

What does not enter into the present value calculation of a college degree?

Temporary layoffs are common in the United States especially among workers who are heavily invested with specific training. Why?

In order to use schooling as a signal:

People decide how much schooling to receive based on:

Introduction to Labor Economics

Labor Supply

Labor Demand

Labor Market Equilibrium

Compensating Wage Differentials

The Wage Structure

Labor Mobility

Labor Market Discrimination

Labor Unions

Incentive Pay

Unemployment

Filters

Exam 6: Human Capital

In 2013, approximately what percent of adults in the United States had not graduated from high school?

If ability is positively related to schooling, then estimating the returns to education directly from the wage-schooling profile will likely

Suppose Amy has 100 efficiency units of labor; Bill has 50 efficiency units of labor; and Chris has 20 efficiency units of labor. Which of the following is true?

What is an example of specific job training?

Labor force participation rates tend to

The slope of the wage-schooling locus provides an estimate of

Why do workers typically pursue their education while young?

Why might people choose to go to college?

What is the main selection issue researchers must address when trying to estimate the effectiveness of government training programs?

Present value calculations allow one to determine

The wage-schooling locus is

What is the stopping rule for choosing one's years of schooling?

In 2013, approximately what percent of adults in the United States had received more education than a high school degree?

What is an example of general job training?

Why is it that a firm will typically not pay for general training?

What does not enter into the present value calculation of a college degree?

Temporary layoffs are common in the United States especially among workers who are heavily invested with specific training. Why?

In order to use schooling as a signal:

People decide how much schooling to receive based on:

Introduction to Labor Economics

Labor Supply

Labor Demand

Labor Market Equilibrium

Compensating Wage Differentials

The Wage Structure

Labor Mobility

Labor Market Discrimination

Labor Unions

Incentive Pay

Unemployment

Filters