Exam 20: Earnings, Unions and Discrimination

As a result of an increase in the earnings gap between skilled and unskilled jobs, the incentive to get a university education has been increasing.

The fact that doctors are paid more than professors is an example of a compensating differential.

Wages never deviate from the balance of supply and demand in the market for labour.

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. If consumers do not discriminate between bald barbers and barbers with hair, then:

Unions are often able to raise wages above the market equilibrium because of their strong bargaining power.

The wage difference between jobs that require education and those that don't:

Evidence of differences in average wages of women compared to men:

Students who are required to finish more schooling have been found to:

Why is a plumber never likely to be as rich as a movie star?

Doppelsöldners were sixteenth century German soldiers (landsknechts) that received double pay for volunteering to fight in the front of their unit. This typically meant they were the first to engage the enemy. Assuming that their training and equipment was identical to other landsknechts, why were their wages so much higher?

Billy works for the local piano-moving company part-time after school. Billy has worked on the job for a couple of years but still hasn't received a wage rise, even though newer employees have received raises. Billy has threatened his employer with a lawsuit if he doesn't get a raise in the next few weeks. Billy believes he is being severely discriminated against. Use this information to answer the following question(s). -Refer to the information provided. Why might an economist be sceptical of Billy's discrimination complaint?

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:

When economists study wages, they relate a worker's wage to those variables that are most subject to measurement. Which of the following are most likely to be omitted variables?

Which of the following would represent capital stock for a forestry firm?

'The gender pay gap provides evidence of widespread, severe, ongoing discrimination by employers and fellow workers'. Evaluate this statement.

Professors often have similar levels of education to lawyers and doctors, but typically get much lower salaries. This difference in income is likely to mean that:

Evidence of discrimination is most apparent when one compares wages among broad groups.

Business firms that pay salespeople a percentage of the sales they make are attempting to reward:

Library assistants are known to have low wages. This is likely to be partly explained by the fact that:

Politicians often point to wage differentials as evidence of labour market discrimination against ethnic minorities and women; however, economists argue against this approach because people differ in the kinds of work they are willing and able to do.