Exam 20: Earnings, Unions and Discrimination

In the small town of Hamilton, Tasmania, there is a local hardware store called Eddy's Hardware. Only two types of workers apply for jobs at Eddy's Hardware, cowboys and farmboys. Local politicians have received numerous complaints that Eddy's Hardware is practicing wage discrimination against cowboys. Eddy's Hardware denies the complaint and says they are only trying to maximise profit. There is also a second hardware store in town, named Frank's Hardware, which, unlike Eddy's Hardware, is not facing discriminatory complaints. -Which of the following statements would weaken the discrimination complaint against Eddy's Hardware?

Given that there are statistical differences in human capital across both age groups and gender, then this is likely to:

Empirical work that does not correct wages for differences in productivity of workers is likely to:

The neoclassical theory of the labour market suggests that wages are governed by labour supply and labour demand.

Ferris B, a university student, is trying to consider what he should do for summer employment. Two recruiters show up at his university 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. -On the basis of knowledge obtained in his economics class, Ferris is likely to conclude that:

The rising gap in wages between unskilled and skilled workers is most likely related to a larger increase in demand for skilled occupations relative to unskilled occupations.

Professional underwater divers are known to have high wages and work an average of only 20 hours a week. The high wages are partly explained by the fact that the job:

Empirical analysis of wage differences have found evidence:

The main reason women were paid less than men in the post-war years was due to:

One of the problems in calculating the true amount of discrimination that takes place in the market for labour is:

When discrimination occurs as a result of prejudice, market solutions are still viable.

Economists have proposed which of the following as contributing to the rising wage gap between skilled and unskilled workers?

The statement that 'the rich get richer, and the poor get poorer' is supported by evidence of an expanding wage gap between high-skill and low-skill workers.

In a study done by Daniel Hamermesh and Jeff Biddle, physically attractive individuals were found to command a 'beauty premium' in the labour market. Based on your experience with university lecturers, do you think there is likely to be a beauty premium for lecturers? Explain your answer with appropriate examples.

If there is a wage differential due to discrimination, it will be unlikely to exist for very long in a competitive market for labour because competing firms will demand:

Arts majors are typically told that an arts degree 'does not restrict one's ability to find successful employment in business'. This statement is likely to reflect a philosophy that an arts degree is:

Even when the labour market was efficient, wage differentials could still occur.

Some economists suggest that international trade has led to an expanding wage gap between high-skill and low-skill workers.

The competitive labour market for barbers is differentiated into two groups, those who are bald (or going bald) and those who have a full head of hair. Assume that the barbers in this market have identical hair-cutting ability, regardless of whether they are bald or not. Currently the equilibrium wage in the bald barber market is lower than that in the non-bald market. Further assume that the market for haircuts is competitive. -Refer to the information provided. Competition in the market for haircuts is consistent with which of the following statements?

When the supply of workers is plentiful, one would predict that market wages would be: