Question 1

Differences in human capital are likely to

Accepted Answer

A)  be unrelated to wage rate differences across gender classifications,since both men and women are required to complete requirements for a high school diploma. 
B)  be most helpful in explaining age discrimination,but unhelpful in explaining race discrimination. 
C)  explain some of the differences in average wage rates across age classifications. 
D)  explain all of the differences in average wage rates across gender classifications. 
A)  be unrelated to wage rate differences across gender classifications,since both men and women are required to complete requirements for a high school diploma. 
B)  be most helpful in explaining age discrimination,but unhelpful in explaining race discrimination. 
C)  explain some of the differences in average wage rates across age classifications. 
D)  explain all of the differences in average wage rates across gender classifications.

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

If people with blue eyes earn more than people with brown eyes,we have proof of discrimination against people with brown eyes.

Accepted Answer

A) True 
 B)False

Question 4

Scenario 19-1
Ferris B. ,a student at a community college,is considering what he should do for summer employment.Two recruiters show up at his school in search of summer workers.Recruiter A is looking for lifeguards to patrol the beach at an exclusive island resort in the Caribbean.Recruiter B is looking for workers to staff positions at a summer youth camp.
-Refer to Scenario 19-1.Ferris is carefully considering the options that each recruiter presents.On the basis of knowledge obtained in his economics class,Ferris concludes that

Accepted Answer

A)  the lifeguard job will be more fun than the summer camp job,so the wage for that job will be higher than otherwise. 
B)  if the summer camp job doesn't require any special skills,the wage for that job will be lower than otherwise. 
C)  since the summer camp job requires some night shift work,the wage for that job will be lower than otherwise. 
D)  All of the above are correct. 
A)  the lifeguard job will be more fun than the summer camp job,so the wage for that job will be higher than otherwise. 
B)  if the summer camp job doesn't require any special skills,the wage for that job will be lower than otherwise. 
C)  since the summer camp job requires some night shift work,the wage for that job will be lower than otherwise. 
D)  All of the above are correct.

Question 5

Which theory is supportive of the idea that increasing educational levels for all workers would raise all workers' productivity and therefore their wages?

Accepted Answer

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

Question 6

Offering different opportunities to similar individuals who differ only by race,ethnic group,sex,age,or other personal characteristics is called

Accepted Answer

A)  a compensating differential. 
B)  an efficiency wage. 
C)  discrimination. 
D)  compensating variation. 
A)  a compensating differential. 
B)  an efficiency wage. 
C)  discrimination. 
D)  compensating variation.

Question 7

Studies have shown that nonunion workers earn about

Accepted Answer

A)  10 to 20 percent more than union workers in similar jobs. 
B)  10 to 20 percent less than union workers in similar jobs. 
C)  40 to 50 percent more than union workers in similar jobs. 
D)  40 to 50 percent less than union workers in similar jobs. 
A)  10 to 20 percent more than union workers in similar jobs. 
B)  10 to 20 percent less than union workers in similar jobs. 
C)  40 to 50 percent more than union workers in similar jobs. 
D)  40 to 50 percent less than union workers in similar jobs.

Question 8

Studies of wages by labor economists indicate that measurable variables such as age,job characteristics,years of education,and years of experience account for

Accepted Answer

A)  virtually none of the variation in wages in our economy. 
B)  some,but less than 50 percent of the variation in wages in our economy. 
C)  about 75 percent of the variation in wages in our economy. 
D)  almost all of the variation in wages in our economy. 
A)  virtually none of the variation in wages in our economy. 
B)  some,but less than 50 percent of the variation in wages in our economy. 
C)  about 75 percent of the variation in wages in our economy. 
D)  almost all of the variation in wages in our economy.

Question 9

Which of the following is an example of discrimination in the labor market?

Accepted Answer

A)  Women earn less than men because women are more likely to be employed in occupations that pay less,such as elementary school teachers rather than electrical engineers. 
B)  Women earn less than men because women have,on average,fewer years of experience in the labor force because women,on average,periodically leave the labor force to raise children. 
C)  A pharmaceutical sales company pays women less than men because the company's customers,physicians and pharmacists,say that they prefer to deal with men rather than women. 
D)  All of the above are examples of discrimination. 
A)  Women earn less than men because women are more likely to be employed in occupations that pay less,such as elementary school teachers rather than electrical engineers. 
B)  Women earn less than men because women have,on average,fewer years of experience in the labor force because women,on average,periodically leave the labor force to raise children. 
C)  A pharmaceutical sales company pays women less than men because the company's customers,physicians and pharmacists,say that they prefer to deal with men rather than women. 
D)  All of the above are examples of discrimination.

Question 10

A signaling theory of education suggests that educational attainment

Accepted Answer

A)  is a signal of high marginal productivity. 
B)  is correlated with natural ability. 
C)  increases the productivity of low-ability workers. 
D)  Both a and b are correct. 
A)  is a signal of high marginal productivity. 
B)  is correlated with natural ability. 
C)  increases the productivity of low-ability workers. 
D)  Both a and b are correct.

Question 11

Which theory would support the idea that education does not enhance productivity and therefore raising all workers' educational levels would not affect wages?

Accepted Answer

A)  signaling theory 
B)  human-capital theory 
C)  physical-capital theory 
D)  the efficient-market hypothesis 
A)  signaling theory 
B)  human-capital theory 
C)  physical-capital theory 
D)  the efficient-market hypothesis

Question 12

Scenario 19-4
Assume that the labor market for barbers is competitive and that it is differentiated into two groups: barbers 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 nonbald market.Further assume that the market for haircuts is competitive.
-Refer to Scenario 19-4.If consumers do not discriminate between bald barbers and barbers with hair,then

Accepted Answer

A)  all barbershops now earn a normal economic profit. 
B)  the difference in wages is able to be maintained since a haircut is not a homogeneous good. 
C)  barbershops that hire barbers with hair will be more profitable than those that don't. 
D)  barbershops that hire bald barbers will be more profitable than those that don't. 
A)  all barbershops now earn a normal economic profit. 
B)  the difference in wages is able to be maintained since a haircut is not a homogeneous good. 
C)  barbershops that hire barbers with hair will be more profitable than those that don't. 
D)  barbershops that hire bald barbers will be more profitable than those that don't.

Question 13

If unskilled labor is relatively plentiful and cheap in many foreign countries,then as the United States expands its trade with these foreign countries,the domestic demand for

Accepted Answer

A)  both skilled and unskilled labor will rise proportionately. 
B)  skilled labor will fall and the demand for unskilled labor will rise. 
C)  skilled labor will rise and the demand for unskilled labor will fall. 
D)  both skilled and unskilled labor will be unaffected,assuming no barriers to free trade. 
A)  both skilled and unskilled labor will rise proportionately. 
B)  skilled labor will fall and the demand for unskilled labor will rise. 
C)  skilled labor will rise and the demand for unskilled labor will fall. 
D)  both skilled and unskilled labor will be unaffected,assuming no barriers to free trade.

Question 14

Who among the following individuals most likely experiences the largest nonmonetary reward as a supplier of labor? Assume all of the four individuals have the same level of education and work the same number of hours per week.

Accepted Answer

A)  Albert,who prefers to be around other people but who works at home by himself 
B)  Amy,whose job provides little intellectual and personal satisfaction 
C)  Antoinette,whose preference is to avoid dangerous work but who works as a firefighter 
D)  Arnold,who works the night shift and prefers to work at night and sleep during the day 
A)  Albert,who prefers to be around other people but who works at home by himself 
B)  Amy,whose job provides little intellectual and personal satisfaction 
C)  Antoinette,whose preference is to avoid dangerous work but who works as a firefighter 
D)  Arnold,who works the night shift and prefers to work at night and sleep during the day

Question 15

The difference in wages paid to major-league baseball players and minor-league baseball players is most likely due to

Accepted Answer

A)  chance. 
B)  natural ability. 
C)  the fact that the players' union is strong. 
D)  a compensating differential. 
A)  chance. 
B)  natural ability. 
C)  the fact that the players' union is strong. 
D)  a compensating differential.

Question 16

Empirical evidence suggests that ability,effort,and chance are not likely to be significant contributors to wage differences.

Accepted Answer

A) True 
 B)False

Question 17

Economists argue competitive markets provide a "natural remedy" to discriminatory wage practices.Which of the following is widely recognized as a potential limit to the effectiveness of that natural remedy?

Accepted Answer

A)  Some workers are members in unions. 
B)  Some firms pay efficiency wages;others do not. 
C)  Some customers are discriminatory in their buying habits. 
D)  Some employees have accumulated more human capital than other employees. 
A)  Some workers are members in unions. 
B)  Some firms pay efficiency wages;others do not. 
C)  Some customers are discriminatory in their buying habits. 
D)  Some employees have accumulated more human capital than other employees.

Question 18

Which of the following is the most likely outcome of minimum wage laws?

Accepted Answer

A)  an increase in both the quantity of labor supplied by workers and the quantity of labor demanded by firms 
B)  an increase in the quantity of labor supplied by workers and a decrease in the quantity of labor demanded by firms 
C)  a decrease in the quantity of labor supplied by workers and an increase in the quantity of labor demanded by firms 
D)  a decrease in both the quantity of labor supplied by workers and the quantity of labor demanded by firms 
A)  an increase in both the quantity of labor supplied by workers and the quantity of labor demanded by firms 
B)  an increase in the quantity of labor supplied by workers and a decrease in the quantity of labor demanded by firms 
C)  a decrease in the quantity of labor supplied by workers and an increase in the quantity of labor demanded by firms 
D)  a decrease in both the quantity of labor supplied by workers and the quantity of labor demanded by firms

Question 19

In recent years,the amount of international trade in which the United States engages has

Accepted Answer

A)  increased,altering the demand for skilled and unskilled labor. 
B)  decreased a little,altering the demand for skilled and unskilled labor. 
C)  decreased substantially,altering the demand for skilled and unskilled labor. 
D)  remained fairly constant;thus,the demand for skilled and unskilled labor is unchanged. 
A)  increased,altering the demand for skilled and unskilled labor. 
B)  decreased a little,altering the demand for skilled and unskilled labor. 
C)  decreased substantially,altering the demand for skilled and unskilled labor. 
D)  remained fairly constant;thus,the demand for skilled and unskilled labor is unchanged.

Question 20

Education and on-the-job training are sources of human capital.

Accepted Answer

A) True 
 B)False

Exam 19: Earnings and Discrimination

Differences in human capital are likely to

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

If people with blue eyes earn more than people with brown eyes,we have proof of discrimination against people with brown eyes.

Which theory is supportive of the idea that increasing educational levels for all workers would raise all workers' productivity and therefore their wages?

Offering different opportunities to similar individuals who differ only by race,ethnic group,sex,age,or other personal characteristics is called

Studies have shown that nonunion workers earn about

Studies of wages by labor economists indicate that measurable variables such as age,job characteristics,years of education,and years of experience account for

Which of the following is an example of discrimination in the labor market?

A signaling theory of education suggests that educational attainment

Which theory would support the idea that education does not enhance productivity and therefore raising all workers' educational levels would not affect wages?

If unskilled labor is relatively plentiful and cheap in many foreign countries,then as the United States expands its trade with these foreign countries,the domestic demand for

Who among the following individuals most likely experiences the largest nonmonetary reward as a supplier of labor? Assume all of the four individuals have the same level of education and work the same number of hours per week.

The difference in wages paid to major-league baseball players and minor-league baseball players is most likely due to

Empirical evidence suggests that ability,effort,and chance are not likely to be significant contributors to wage differences.

Economists argue competitive markets provide a "natural remedy" to discriminatory wage practices.Which of the following is widely recognized as a potential limit to the effectiveness of that natural remedy?

Which of the following is the most likely outcome of minimum wage laws?

In recent years,the amount of international trade in which the United States engages has

Education and on-the-job training are sources of human capital.

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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