Question 1

Human capital is the accumulation of investments in people. The most important type of human capital is education.

Accepted Answer

A) True 
 B)False

Question 2

The 'beauty premium' can be explained by the fact that in some occupations, physical attractiveness of a worker may enhance the value of their marginal product.

Accepted Answer

A) True 
 B)False

Question 3

Comparable worth In response to the gender gap, some states and countries have experimented with comparable worth regulations. This tries to close the wage gap by requiring employers to pay people doing jobs of comparable worth the same income. Hence, if firemen get paid more than librarians, but regulators deem that the jobs are of comparable wealth, then wages of librarians would have to rise to match firemen.
Advocates of comparable worth policies believe that compensating differentials do not explain differences in wages of men and women.
One potential critique this principle of comparable worth is that:

Accepted Answer

A)  workers are seldom discriminated against 
B)  wage differences are unlikely to reflect differences in training or work experience 
C)  if non-monetary aspects of a job are difficult to measure, establishing comparable worth will be harder 
D)  wage differences are unlikely to reflect differences in risk or difficulty 
A)  workers are seldom discriminated against 
B)  wage differences are unlikely to reflect differences in training or work experience 
C)  if non-monetary aspects of a job are difficult to measure, establishing comparable worth will be harder 
D)  wage differences are unlikely to reflect differences in risk or difficulty

Question 4

Advocates of comparable worth claim that:

Accepted Answer

A)  men are typically paid less than women for identical work 
B)  the existence of a gender gap in wage rates is evidence of discrimination 
C)  occupations are not gender specific 
D)  all of the above are true 
A)  men are typically paid less than women for identical work 
B)  the existence of a gender gap in wage rates is evidence of discrimination 
C)  occupations are not gender specific 
D)  all of the above are true

Question 5

Which of the following theories would suggest that attending school does not improve productivity, but that high-ability people are more likely to stay in school?

Accepted Answer

A)  human capital theory 
B)  signalling theory 
C)  the theory of compensating differential 
D)  the efficient market hypothesis 
A)  human capital theory 
B)  signalling theory 
C)  the theory of compensating differential 
D)  the efficient market hypothesis

Question 6

Discrimination is a reflection of some people's prejudice against certain groups in society.

Accepted Answer

A) True 
 B)False

Question 7

When a worker is deciding whether to take a job or not:

Accepted Answer

A)  the wage is believed by economists to be the only determining factor 
B)  the worker may consider the inherent danger involved in the given job 
C)  the worker may consider whether the job is exciting 
D)  both B and C are correct 
A)  the wage is believed by economists to be the only determining factor 
B)  the worker may consider the inherent danger involved in the given job 
C)  the worker may consider whether the job is exciting 
D)  both B and C are correct

Question 8

Which of these theories would support the idea that increasing educational levels for all workers would raise all workers' productivity and thereby their wage?

Accepted Answer

A)  human capital theory 
B)  signalling theory 
C)  the theory of compensating differentials 
D)  the efficient market hypothesis 
A)  human capital theory 
B)  signalling theory 
C)  the theory of compensating differentials 
D)  the efficient market hypothesis

Question 9

Even if markets are competitive, discriminatory hiring practices can persist because of:

Accepted Answer

A)  payroll taxes 
B)  the lower costs of hiring of workers discriminated against 
C)  customer preferences 
D)  minimum wages that are set below the market equilibrium wage 
A)  payroll taxes 
B)  the lower costs of hiring of workers discriminated against 
C)  customer preferences 
D)  minimum wages that are set below the market equilibrium wage

Question 10

Taxi drivers in large cities are likely to earn more than taxi drivers in rural areas. One reason for this wage differential could be that:

Accepted Answer

A)  driving in large cities is more fun than driving in rural areas 
B)  driving in a large city is easier than driving in a rural area 
C)  it is unlikely that a taxi driver in a large city will be involved in a traffic accident that involves farm animals 
D)  driving a taxi in a large city is more dangerous than driving in a rural area 
A)  driving in large cities is more fun than driving in rural areas 
B)  driving in a large city is easier than driving in a rural area 
C)  it is unlikely that a taxi driver in a large city will be involved in a traffic accident that involves farm animals 
D)  driving a taxi in a large city is more dangerous than driving in a rural area

Question 11

Differences in human capital among groups of workers is possibly a reflection of discrimination.

Accepted Answer

A) True 
 B)False

Question 12

What is the signalling theory of education?

Accepted Answer

This theory claims that rather than educ

Question 13

Wage differentials are often caused by differences in education, experience and the willingness to take on dangerous or unpleasant tasks by workers.

Accepted Answer

A) True 
 B)False

Question 14

A signalling theory of education suggests that educational attainment is correlated with:

Accepted Answer

A)  natural ability 
B)  increasing wage gaps 
C)  marginal productivity 
D)  decreasing wage gaps 
A)  natural ability 
B)  increasing wage gaps 
C)  marginal productivity 
D)  decreasing wage gaps

Question 15

Natural ability is another reason why some people can earn more than others doing the same job.

Accepted Answer

A) True 
 B)False

Question 16

The neoclassical theory of labour predicts that when competitive labour markets are in equilibrium:

Accepted Answer

A)  workers are paid the value of their marginal contribution to the economy 
B)  the wage rate will be the same for all workers 
C)  the distribution of wages across the economy will be bell-shaped 
D)  all of the above are true 
A)  workers are paid the value of their marginal contribution to the economy 
B)  the wage rate will be the same for all workers 
C)  the distribution of wages across the economy will be bell-shaped 
D)  all of the above are true

Question 17

As more and more companies rely on computer databases and less on filing cabinets, which of the following is likely to occur? (i) the demand for computer programmers will rise
(ii) the demand for filing clerks will fall
(iii) the wage paid to computer clerks will rise

Accepted Answer

A)  (i) and (ii) 
B)  (ii) and (iii) 
C)  (i) and (iii) 
D)  (i), (ii) and (iii) 
A)  (i) and (ii) 
B)  (ii) and (iii) 
C)  (i) and (iii) 
D)  (i), (ii) and (iii)

Question 18

According to the signalling view, education:

Accepted Answer

A)  signals natural ability 
B)  signals risk-taking attributes 
C)  enhances productivity 
D)  is an investment 
A)  signals natural ability 
B)  signals risk-taking attributes 
C)  enhances productivity 
D)  is an investment

Question 19

Economists who are critical of comparable worth proposals are likely to argue which of the following? (i) the competitive market is the best mechanism for setting wages
(ii) a gender wage gap is not by itself evidence of discrimination
(iii) implementation of a comparable worth program would have many of the same effects as minimum wage legislation

Accepted Answer

A)  (i) and (ii) only 
B)  (ii) and (iii) only 
C)  (i) and (iii) only 
D)  (i), (ii) and (iii) 
A)  (i) and (ii) only 
B)  (ii) and (iii) only 
C)  (i) and (iii) only 
D)  (i), (ii) and (iii)

Question 20

What is the definition of a union?

Accepted Answer

A)  a group of employers whose goal is to keep wages above equilibrium levels 
B)  a group of employers whose goal is to keep wages below equilibrium levels 
C)  a group of employees whose goal is to keep wages above equilibrium levels 
D)  a group of employees whose goal is to keep wages below equilibrium levels 
A)  a group of employers whose goal is to keep wages above equilibrium levels 
B)  a group of employers whose goal is to keep wages below equilibrium levels 
C)  a group of employees whose goal is to keep wages above equilibrium levels 
D)  a group of employees whose goal is to keep wages below equilibrium levels

Exam 20: Earnings, Unions and Discrimination

Human capital is the accumulation of investments in people. The most important type of human capital is education.

The 'beauty premium' can be explained by the fact that in some occupations, physical attractiveness of a worker may enhance the value of their marginal product.

Advocates of comparable worth claim that:

Which of the following theories would suggest that attending school does not improve productivity, but that high-ability people are more likely to stay in school?

Discrimination is a reflection of some people's prejudice against certain groups in society.

When a worker is deciding whether to take a job or not:

Which of these theories would support the idea that increasing educational levels for all workers would raise all workers' productivity and thereby their wage?

Even if markets are competitive, discriminatory hiring practices can persist because of:

Taxi drivers in large cities are likely to earn more than taxi drivers in rural areas. One reason for this wage differential could be that:

Differences in human capital among groups of workers is possibly a reflection of discrimination.

What is the signalling theory of education?

Wage differentials are often caused by differences in education, experience and the willingness to take on dangerous or unpleasant tasks by workers.

A signalling theory of education suggests that educational attainment is correlated with:

Natural ability is another reason why some people can earn more than others doing the same job.

The neoclassical theory of labour predicts that when competitive labour markets are in equilibrium:

As more and more companies rely on computer databases and less on filing cabinets, which of the following is likely to occur? (i) the demand for computer programmers will rise (ii) the demand for filing clerks will fall (iii) the wage paid to computer clerks will rise

According to the signalling view, education:

What is the definition of a union?

Ten Lessons From Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand and Government Policies

Consumers, Producers and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Business Strategy

Competition Policy

Monopolistic Competition

The Markets for the Factors of Production

Income Inequity and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment and the Financial System

The Natural Rate of Unemployment

The Monetary System

Inflation: Its Causes and Costs

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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