Question 1

Which of the following describes the labor market for personal-service workers?

Accepted Answer

A)  The pay of these workers is increasing. 
B)  Legal and undocumented immigrants often work in this sector. 
C)  Most personal-service jobs require post-high school education or training. 
D)  The supply of workers is decreasing as workers displaced by technological innovations seek jobs in sectors other than personal-services. 
A)  The pay of these workers is increasing. 
B)  Legal and undocumented immigrants often work in this sector. 
C)  Most personal-service jobs require post-high school education or training. 
D)  The supply of workers is decreasing as workers displaced by technological innovations seek jobs in sectors other than personal-services.

Question 2

Figure 19-1  
-Refer to Figure 19-1.Suppose the local labor market was in equilibrium to begin with but then the largest local employer decided to change its compensation scheme to $10 as shown.Which of the following compensation schemes could the graph be illustrating?

Accepted Answer

A)  An efficiency wage. 
B)  Discrimination. 
C)  A compensating differential. 
D)  The superstar phenomenon. 
A)  An efficiency wage. 
B)  Discrimination. 
C)  A compensating differential. 
D)  The superstar phenomenon.

Question 3

In the early twentieth century,streetcars in many southern cities were segregated by race.This racial segregation was the result of

Accepted Answer

A)  laws that required such segregation. 
B)  long-standing southern traditions about which the law was silent. 
C)  streetcar firms trying to maximize profits. 
D)  streetcar firms trying to minimize costs. 
A)  laws that required such segregation. 
B)  long-standing southern traditions about which the law was silent. 
C)  streetcar firms trying to maximize profits. 
D)  streetcar firms trying to minimize costs.

Question 4

Assuming that all other things are equal,including the wage,which of the following statements is correct?

Accepted Answer

A)  The quantity of labor supplied for easy jobs exceeds that for difficult jobs. 
B)  The quantity of labor supplied for fun jobs exceeds that for dull jobs. 
C)  The quantity of labor supplied for safe jobs exceeds that for dangerous jobs. 
D)  All of the above are correct. 
A)  The quantity of labor supplied for easy jobs exceeds that for difficult jobs. 
B)  The quantity of labor supplied for fun jobs exceeds that for dull jobs. 
C)  The quantity of labor supplied for safe jobs exceeds that for dangerous jobs. 
D)  All of the above are correct.

Question 5

Certain factors that are probably important in determining wages are nevertheless difficult to measure.Consequently,labor economists find those factors difficult to incorporate into their studies of labor markets and wages.Those factors include

Accepted Answer

A)  effort and natural ability. 
B)  natural ability and years of experience. 
C)  years of experience and job characteristics. 
D)  race and job characteristics. 
A)  effort and natural ability. 
B)  natural ability and years of experience. 
C)  years of experience and job characteristics. 
D)  race and job characteristics.

Question 6

Suppose that the country of Libraria made a concerted effort to increase the educational level of its people.If this effort had no effect on the wages of its workers,one might consider this as evidence in support of

Accepted Answer

A)  the human-capital view of education. 
B)  the signaling view of education. 
C)  both the human-capital and the signaling view of education. 
D)  neither the human-capital nor the signaling view of education. 
A)  the human-capital view of education. 
B)  the signaling view of education. 
C)  both the human-capital and the signaling view of education. 
D)  neither the human-capital nor the signaling view of education.

Question 7

Economists who study labor markets have discovered that

Accepted Answer

A)  only about 5 percent of wage differences are related to chance. 
B)  ability is not difficult to measure but is largely insignificant in explaining wage differences. 
C)  work effort is difficult to measure but is not likely to contribute much to an explanation of wage differences. 
D)  ability,effort,and chance are likely to be significant contributors to wage differences. 
A)  only about 5 percent of wage differences are related to chance. 
B)  ability is not difficult to measure but is largely insignificant in explaining wage differences. 
C)  work effort is difficult to measure but is not likely to contribute much to an explanation of wage differences. 
D)  ability,effort,and chance are likely to be significant contributors to wage differences.

Question 8

Which of the following explains why soccer players make millions of dollars in Europe but do not in the United States?

Accepted Answer

A)  Discriminatory rules established by the government. 
B)  Compensating wage differentials for living in Europe. 
C)  Discriminatory preferences on the part of US sports fans for other sports. 
D)  Efficiency wages paid to European players to enhance on-field performance. 
A)  Discriminatory rules established by the government. 
B)  Compensating wage differentials for living in Europe. 
C)  Discriminatory preferences on the part of US sports fans for other sports. 
D)  Efficiency wages paid to European players to enhance on-field performance.

Question 9

The example of segregated streetcars in the southern United States in the early twentieth century is one example of

Accepted Answer

A)  racial discrimination by firms,despite government efforts to halt it. 
B)  racial discrimination by firms with no government action either to halt it or to support it. 
C)  government-mandated racial discrimination. 
D)  a failure to find any discrimination where most would expect to find it. 
A)  racial discrimination by firms,despite government efforts to halt it. 
B)  racial discrimination by firms with no government action either to halt it or to support it. 
C)  government-mandated racial discrimination. 
D)  a failure to find any discrimination where most would expect to find it.

Question 10

The United States is losing manufacturing jobs to countries like China and India,where manufacturing jobs have increased 30 percent since 1995.

Accepted Answer

A) True 
 B)False

Question 11

John is an Asian 23-year-old male,and Ken is an Asian 43-year-old male.Both John and Ken are economics majors,and they graduated from the same college with the same GPA - John in 2006 and Ken in 1986.John and Ken both are both financial advisers at the same brokerage firm.John earns $52,000 a year,and Ken earns $88,000 a year.Select the best explanation for this wage difference.

Accepted Answer

A)  John has more human capital than Ken. 
B)  John has less human capital than Ken. 
C)  John has been discriminated against because he is young. 
D)  Ken has been discriminated against because he is old. 
A)  John has more human capital than Ken. 
B)  John has less human capital than Ken. 
C)  John has been discriminated against because he is young. 
D)  Ken has been discriminated against because he is old.

Question 12

A 1990 study of the market for collectable baseball cards suggested

Accepted Answer

A)  there was no evidence of price discrimination on the basis of player position (hitter versus pitcher). 
B)  markets in which the product price is low are not typically characterized by consumer-driven race discrimination. 
C)  cards for white players (both hitters and pitchers)were 10 to 13 percent higher than those for comparable black players. 
D)  cards for black players (both hitters and pitchers)were 10 to 13 percent higher than those for comparable white players. 
A)  there was no evidence of price discrimination on the basis of player position (hitter versus pitcher). 
B)  markets in which the product price is low are not typically characterized by consumer-driven race discrimination. 
C)  cards for white players (both hitters and pitchers)were 10 to 13 percent higher than those for comparable black players. 
D)  cards for black players (both hitters and pitchers)were 10 to 13 percent higher than those for comparable white players.

Question 13

Which of the following is not an example of efficiency wages?

Accepted Answer

A)  More productive workers are paid more to reflect their higher output. 
B)  Higher wages induce higher output from workers. 
C)  Better quality applicants apply for jobs that pay above-equilibrium wages. 
D)  Workers are less likely to leave jobs that pay above-equilibrium wages. 
A)  More productive workers are paid more to reflect their higher output. 
B)  Higher wages induce higher output from workers. 
C)  Better quality applicants apply for jobs that pay above-equilibrium wages. 
D)  Workers are less likely to leave jobs that pay above-equilibrium wages.

Question 14

In the early 20th century,streetcar seating which was segregated by race

Accepted Answer

A)  was a result of economic discrimination by railroad company managers. 
B)  was less profitable than streetcar seating that didn't have restrictions. 
C)  was strongly supported by private streetcar companies. 
D)  led to higher revenue and lower costs for streetcar companies. 
A)  was a result of economic discrimination by railroad company managers. 
B)  was less profitable than streetcar seating that didn't have restrictions. 
C)  was strongly supported by private streetcar companies. 
D)  led to higher revenue and lower costs for streetcar companies.

Question 15

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

Accepted Answer

A)  Increases in the role of unions in negotiating wages. 
B)  Declines in the amount of international trade. 
C)  There is no rising wage gap. 
D)  Technological change. 
A)  Increases in the role of unions in negotiating wages. 
B)  Declines in the amount of international trade. 
C)  There is no rising wage gap. 
D)  Technological change.

Question 16

Coal mining is a dangerous and dirty job.Suppose someone developed new machinery that made coal mining safer and cleaner;at the same time,it made coal miners more productive.We would expect that the wages of coal miners would

Accepted Answer

A)  rise. 
B)  fall. 
C)  stay exactly the same. 
D)  rise,fall,or stay the same. 
A)  rise. 
B)  fall. 
C)  stay exactly the same. 
D)  rise,fall,or stay the same.

Question 17

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

Accepted Answer

A)  Compensating differential creates a higher wage in the movie business. 
B)  There haven't been any significant technological advances in the plumbing industry. 
C)  Productivity levels are low in the plumbing industry due to low worker morale. 
D)  A plumber can provide his services to only a limited number of customers. 
A)  Compensating differential creates a higher wage in the movie business. 
B)  There haven't been any significant technological advances in the plumbing industry. 
C)  Productivity levels are low in the plumbing industry due to low worker morale. 
D)  A plumber can provide his services to only a limited number of customers.

Question 18

Effective minimum-wage laws will most likely

Accepted Answer

A)  increase demand for labor. 
B)  create a surplus of labor. 
C)  increase incomes for all unskilled workers. 
D)  decrease incomes for all unskilled workers. 
A)  increase demand for labor. 
B)  create a surplus of labor. 
C)  increase incomes for all unskilled workers. 
D)  decrease incomes for all unskilled workers.

Question 19

Working in a slaughterhouse is much riskier and more unpleasant than working in a bookstore.As a result,we'd expect a difference in wages between the two jobs.The difference is known as

Accepted Answer

A)  an efficiency wage. 
B)  a compensating differential. 
C)  a wage adjustment. 
D)  a minimum wage. 
A)  an efficiency wage. 
B)  a compensating differential. 
C)  a wage adjustment. 
D)  a minimum wage.

Question 20

In the presence of discrimination by customers,

Accepted Answer

A)  market forces nevertheless always work to prevent discriminatory wage differentials. 
B)  discriminatory wage differentials can exist,but only if firms refrain from maximizing their profits. 
C)  discriminatory wage differentials can exist,but only if government reinforces customers' practices by passing laws that mandate discrimination. 
D)  discriminatory wage differentials can exist,even in the absence of discriminatory practices by firms or by government. 
A)  market forces nevertheless always work to prevent discriminatory wage differentials. 
B)  discriminatory wage differentials can exist,but only if firms refrain from maximizing their profits. 
C)  discriminatory wage differentials can exist,but only if government reinforces customers' practices by passing laws that mandate discrimination. 
D)  discriminatory wage differentials can exist,even in the absence of discriminatory practices by firms or by government.

Exam 19: Earnings and Discrimination

Which of the following describes the labor market for personal-service workers?

Figure 19-1 -Refer to Figure 19-1.Suppose the local labor market was in equilibrium to begin with but then the largest local employer decided to change its compensation scheme to $10 as shown.Which of the following compensation schemes could the graph be illustrating?

In the early twentieth century,streetcars in many southern cities were segregated by race.This racial segregation was the result of

Assuming that all other things are equal,including the wage,which of the following statements is correct?

Certain factors that are probably important in determining wages are nevertheless difficult to measure.Consequently,labor economists find those factors difficult to incorporate into their studies of labor markets and wages.Those factors include

Suppose that the country of Libraria made a concerted effort to increase the educational level of its people.If this effort had no effect on the wages of its workers,one might consider this as evidence in support of

Economists who study labor markets have discovered that

Which of the following explains why soccer players make millions of dollars in Europe but do not in the United States?

The example of segregated streetcars in the southern United States in the early twentieth century is one example of

The United States is losing manufacturing jobs to countries like China and India,where manufacturing jobs have increased 30 percent since 1995.

A 1990 study of the market for collectable baseball cards suggested

Which of the following is not an example of efficiency wages?

In the early 20th century,streetcar seating which was segregated by race

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

Coal mining is a dangerous and dirty job.Suppose someone developed new machinery that made coal mining safer and cleaner;at the same time,it made coal miners more productive.We would expect that the wages of coal miners would

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

Effective minimum-wage laws will most likely

Working in a slaughterhouse is much riskier and more unpleasant than working in a bookstore.As a result,we'd expect a difference in wages between the two jobs.The difference is known as

In the presence of discrimination by customers,

Ten Principles of 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

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Income Inequality 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 Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

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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