Question 1

Which of the following statements is not correct?

Accepted Answer

A)  It is possible that additional education will increase a worker's wage without increasing the worker's productivity. 
B)  If discriminating wage differentials persist in competitive markets,it is primarily because either consumers are willing to pay to maintain the discrimination or because government mandates it. 
C)  An efficiency wage corresponds to a lower wage that a nondiscriminating employer pays to a worker because a discriminating employer won't hire her. 
D)  In competitive markets,workers are paid a wage equal to the value of their marginal product. 
A)  It is possible that additional education will increase a worker's wage without increasing the worker's productivity. 
B)  If discriminating wage differentials persist in competitive markets,it is primarily because either consumers are willing to pay to maintain the discrimination or because government mandates it. 
C)  An efficiency wage corresponds to a lower wage that a nondiscriminating employer pays to a worker because a discriminating employer won't hire her. 
D)  In competitive markets,workers are paid a wage equal to the value of their marginal product.

Question 2

In discussing discrimination and the wage differences that exist between men and women and between blacks and whites,it has been said that "the disease is political even if the symptom is economic." What does this mean?

Accepted Answer

A)  Wage differences persist because the political system has failed to enact laws to equalize wages among all groups. 
B)  Wage differences exist because of past discrimination on the part of political bodies such as city councils and school boards. 
C)  Wage differences exist because of the differences in the political views of the different groups. 
D)  Wage differences exist because the political system is biased against paying compensating differentials. 
A)  Wage differences persist because the political system has failed to enact laws to equalize wages among all groups. 
B)  Wage differences exist because of past discrimination on the part of political bodies such as city councils and school boards. 
C)  Wage differences exist because of the differences in the political views of the different groups. 
D)  Wage differences exist because the political system is biased against paying compensating differentials.

Question 3

Hapland and Genoshia have just started to trade with each other.Hapland exports goods produced with skilled labor and imports goods made with unskilled labor from Genoshia.Over time,we would expect that the wages of skilled labor in Hapland will

Accepted Answer

A)  rise,and the wages of unskilled labor in Hapland will fall. 
B)  fall,and the wages of unskilled labor in Hapland will rise. 
C)  rise,and the wages of unskilled labor in Hapland will rise. 
D)  fall,and the wages of unskilled labor in Hapland will fall. 
A)  rise,and the wages of unskilled labor in Hapland will fall. 
B)  fall,and the wages of unskilled labor in Hapland will rise. 
C)  rise,and the wages of unskilled labor in Hapland will rise. 
D)  fall,and the wages of unskilled labor in Hapland will fall.

Question 4

Scenario 19-2
Travis,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 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.
-Refer to Scenario 19-2.Travis is carefully considering the options that each recruiter presents.On the basis of knowledge obtained in his economics class,Travis concludes that

Accepted Answer

A)  if the job in Africa has a lot of job satisfaction,the wage will be higher. 
B)  if the job in Africa has a lot of job satisfaction,the wage will be lower. 
C)  if the job cleaning motel rooms is disagreeable,the wage will be lower. 
D)  if the job cleaning motel rooms is agreeable,the wage will be higher. 
A)  if the job in Africa has a lot of job satisfaction,the wage will be higher. 
B)  if the job in Africa has a lot of job satisfaction,the wage will be lower. 
C)  if the job cleaning motel rooms is disagreeable,the wage will be lower. 
D)  if the job cleaning motel rooms is agreeable,the wage will be higher.

Question 5

A recent study of the determinants of wages for clerical staff at a state university found that years of schooling,years of experience,age and job characteristics only explained about one-half of the difference in wages.Describe other factors that may be important in explaining wages differences for clerical staff.

Accepted Answer

Other factors may in

Question 6

According to the signaling theory of education,better-educated workers

Accepted Answer

A)  are likely to be high-ability workers. 
B)  improve their marginal productivity through education. 
C)  are in scarce supply in less developed countries. 
D)  can only find low-skilled jobs due to technology. 
A)  are likely to be high-ability workers. 
B)  improve their marginal productivity through education. 
C)  are in scarce supply in less developed countries. 
D)  can only find low-skilled jobs due to technology.

Question 7

Attributing the gender wage gap to ongoing discrimination by employers will likely be incorrect because

Accepted Answer

A)  some of the wage gap is explained by efficiency wages. 
B)  differences in years of work experience likely lead to productivity differences between men and women. 
C)  compensating differentials usually lead to higher wages for women. 
D)  All of the above are correct. 
A)  some of the wage gap is explained by efficiency wages. 
B)  differences in years of work experience likely lead to productivity differences between men and women. 
C)  compensating differentials usually lead to higher wages for women. 
D)  All of the above are correct.

Question 8

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

Accepted Answer

A)  is not likely to be related to productivity differences. 
B)  is a barrier to obtaining an education. 
C)  does not affect the supply of workers in the different labor markets. 
D)  encourages workers to bear the cost of acquiring education. 
A)  is not likely to be related to productivity differences. 
B)  is a barrier to obtaining an education. 
C)  does not affect the supply of workers in the different labor markets. 
D)  encourages workers to bear the cost of acquiring education.

Question 9

Jane and John are twins who attended grammar school through college together.Jane and John both got jobs at a brokerage firm after graduating from college with the same major.They both work equally hard.Jane earns $43,000 a year,and John earns $69,000 a year.Select the best explanation for this wage difference.

Accepted Answer

A)  Jane has less human capital than John. 
B)  Jane has more human capital than John. 
C)  John has been discriminated against because he is male. 
D)  Jane has been discriminated against because she is female. 
A)  Jane has less human capital than John. 
B)  Jane has more human capital than John. 
C)  John has been discriminated against because he is male. 
D)  Jane has been discriminated against because she is female.

Question 10

A compensating differential is a difference in wages due to higher levels of education or other forms of human capital.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements is not correct?

Accepted Answer

A)  If the signaling theory of education is correct,additional schooling does not affect worker productivity but rather signals a correlation between natural ability and education. 
B)  The theory of efficiency wages suggests that firms pay higher wages to workers in order to induce workers to be more productive. 
C)  Discrimination against workers of a certain race or ethnicity is often in conflict with a firm's desire to maximize profits. 
D)  The theory of compensating wage differentials reflects the different skills,abilities,and productivity of workers. 
A)  If the signaling theory of education is correct,additional schooling does not affect worker productivity but rather signals a correlation between natural ability and education. 
B)  The theory of efficiency wages suggests that firms pay higher wages to workers in order to induce workers to be more productive. 
C)  Discrimination against workers of a certain race or ethnicity is often in conflict with a firm's desire to maximize profits. 
D)  The theory of compensating wage differentials reflects the different skills,abilities,and productivity of workers.

Question 13

The market wage could be higher than the equilibrium wage if a worker

Accepted Answer

A)  belongs to a labor union. 
B)  is covered by a minimum-wage law. 
C)  is paid an efficiency wage. 
D)  All of the above are correct. 
A)  belongs to a labor union. 
B)  is covered by a minimum-wage law. 
C)  is paid an efficiency wage. 
D)  All of the above are correct.

Question 14

A worker association that bargains with employers over wages and working conditions is called

Accepted Answer

A)  a strike. 
B)  an oligopoly. 
C)  a firm. 
D)  a union. 
A)  a strike. 
B)  an oligopoly. 
C)  a firm. 
D)  a union.

Question 15

It is likely that,if we could measure the quality as well as the quantity of education,

Accepted Answer

A)  the human-capital argument would become less compelling as a means of explaining wage differentials between white workers and black workers. 
B)  the human-capital argument would become less compelling as a means of explaining wage differentials between male workers and female workers. 
C)  wage differentials between white workers and black workers would be more puzzling than they are now. 
D)  wage differentials between white workers and black workers would be more fully explained. 
A)  the human-capital argument would become less compelling as a means of explaining wage differentials between white workers and black workers. 
B)  the human-capital argument would become less compelling as a means of explaining wage differentials between male workers and female workers. 
C)  wage differentials between white workers and black workers would be more puzzling than they are now. 
D)  wage differentials between white workers and black workers would be more fully explained.

Question 16

Business owners who care only about making money are

Accepted Answer

A)  likely to discriminate against certain groups of workers. 
B)  likely to be replaced by discriminating businesses. 
C)  more concerned about racial discrimination than gender discrimination. 
D)  at an advantage when competing against those who practice discrimination. 
A)  likely to discriminate against certain groups of workers. 
B)  likely to be replaced by discriminating businesses. 
C)  more concerned about racial discrimination than gender discrimination. 
D)  at an advantage when competing against those who practice discrimination.

Question 17

The number of American workers employed in the manufacturing sector has

Accepted Answer

A)  declined from 30 percent in the 1940s to 10 percent today. 
B)  increased from 10 percent in the 1940s to 30 percent today. 
C)  declined,which has contributed to the decline in global industrial output. 
D)  increased more rapidly than the increase in farming jobs. 
A)  declined from 30 percent in the 1940s to 10 percent today. 
B)  increased from 10 percent in the 1940s to 30 percent today. 
C)  declined,which has contributed to the decline in global industrial output. 
D)  increased more rapidly than the increase in farming jobs.

Question 18

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers in the United States offer two main hypotheses.Both hypotheses

Accepted Answer

A)  suggest that demand and supply conditions have played a less important role in determining workers' wages in recent years. 
B)  suggest that,over time,the demand for skilled labor has risen relative to the demand for unskilled labor. 
C)  emphasize the shrinking importance of international trade in recent years. 
D)  emphasize the growing importance of women and teenagers in the workforce in recent years. 
A)  suggest that demand and supply conditions have played a less important role in determining workers' wages in recent years. 
B)  suggest that,over time,the demand for skilled labor has risen relative to the demand for unskilled labor. 
C)  emphasize the shrinking importance of international trade in recent years. 
D)  emphasize the growing importance of women and teenagers in the workforce in recent years.

Question 19

Scenario 19-5
Billy works for the local piano moving company part-time after school.Billy has worked for the company for two years but still hasn't received a wage increase,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 a victim of labor-market discrimination.
-Refer to Scenario 19-5.Which of the following statements would weaken Billy's case against his employer?

Accepted Answer

A)  Billy only works part-time;as a result,he has fewer hours of experience even though he has been with the company for more years. 
B)  Billy complains of lower back problems;as a result,he frequently gets the easy job of holding the doors open while the movers carry the piano into the customer's house. 
C)  The other employees have high school diplomas,but Billy did not graduate from high school. 
D)  All of the above statements would weaken Billy's case. 
A)  Billy only works part-time;as a result,he has fewer hours of experience even though he has been with the company for more years. 
B)  Billy complains of lower back problems;as a result,he frequently gets the easy job of holding the doors open while the movers carry the piano into the customer's house. 
C)  The other employees have high school diplomas,but Billy did not graduate from high school. 
D)  All of the above statements would weaken Billy's case.

Question 20

Economists would argue that the gender wage gap is narrowing because of efficiency wages.

Accepted Answer

A) True 
 B)False

Exam 19: Earnings and Discrimination

Which of the following statements is not correct?

In discussing discrimination and the wage differences that exist between men and women and between blacks and whites,it has been said that "the disease is political even if the symptom is economic." What does this mean?

Hapland and Genoshia have just started to trade with each other.Hapland exports goods produced with skilled labor and imports goods made with unskilled labor from Genoshia.Over time,we would expect that the wages of skilled labor in Hapland will

According to the signaling theory of education,better-educated workers

Attributing the gender wage gap to ongoing discrimination by employers will likely be incorrect because

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

A compensating differential is a difference in wages due to higher levels of education or other forms of human capital.

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

Which of the following statements is not correct?

The market wage could be higher than the equilibrium wage if a worker

A worker association that bargains with employers over wages and working conditions is called

It is likely that,if we could measure the quality as well as the quantity of education,

Business owners who care only about making money are

The number of American workers employed in the manufacturing sector has

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers in the United States offer two main hypotheses.Both hypotheses

Economists would argue that the gender wage gap is narrowing because of efficiency wages.

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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