Question 1

Philip is an average contractor in town,and he earns $40,000 a year.Billy is the best contractor in town,and he earns $480,000 a year.Philip's contracting services

Accepted Answer

A)  are valued more by the market relative to Billy's and that explains why his income is higher than Billy's. 
B)  are valued less by the market relative to Billy's and that explains why his income is higher than Billy's. 
C)  are valued less by the market relative to Billy's and that explains why his income is lower than Billy's. 
D)  are more expensive because he receives a compensating differential. 
A)  are valued more by the market relative to Billy's and that explains why his income is higher than Billy's. 
B)  are valued less by the market relative to Billy's and that explains why his income is higher than Billy's. 
C)  are valued less by the market relative to Billy's and that explains why his income is lower than Billy's. 
D)  are more expensive because he receives a compensating differential.

Question 2

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers offer two main hypotheses:

Accepted Answer

A)  One hypothesis emphasizes education,and the other emphasizes random influences. 
B)  One hypothesis emphasizes education,and the other emphasizes supply and demand. 
C)  One hypothesis emphasizes international trade,and the other emphasizes technology. 
D)  One hypothesis emphasizes signaling,and the other emphasizes education. 
A)  One hypothesis emphasizes education,and the other emphasizes random influences. 
B)  One hypothesis emphasizes education,and the other emphasizes supply and demand. 
C)  One hypothesis emphasizes international trade,and the other emphasizes technology. 
D)  One hypothesis emphasizes signaling,and the other emphasizes education.

Question 3

Which of the following statements is true of wages,educational attainment,and gender?

Accepted Answer

A)  Male workers are compensated for attending college,while female workers generally are not. 
B)  Female workers are compensated for attending college,while male workers generally are not. 
C)  Both genders receive a higher wage for attending college. 
D)  Neither gender receives a higher wage for attending college. 
A)  Male workers are compensated for attending college,while female workers generally are not. 
B)  Female workers are compensated for attending college,while male workers generally are not. 
C)  Both genders receive a higher wage for attending college. 
D)  Neither gender receives a higher wage for attending college.

Question 4

Evaluate the following statement: "The gender pay gap provides evidence of widespread,severe,ongoing discrimination by employers and fellow workers."

Accepted Answer

There are many explanations of the gende

Question 5

Which of the following factors does not affect the value of a worker's marginal product?

Accepted Answer

A)  Discrimination against a particular group of workers by a firm's customers. 
B)  A worker's level of disposable income. 
C)  A worker's level of human capital. 
D)  Compensating wage differentials. 
A)  Discrimination against a particular group of workers by a firm's customers. 
B)  A worker's level of disposable income. 
C)  A worker's level of human capital. 
D)  Compensating wage differentials.

Question 6

Discrimination occurs when the marketplace offers different opportunities to similar individuals who differ only by

Accepted Answer

A)  race. 
B)  level of education. 
C)  attitudes toward risk. 
D)  attitude toward the tradeoff between labor and leisure. 
A)  race. 
B)  level of education. 
C)  attitudes toward risk. 
D)  attitude toward the tradeoff between labor and leisure.

Question 7

The most popular movie stars have high incomes for a number of reasons.One such reason is

Accepted Answer

A)  an ability for almost everyone to enjoy movies at a relatively low cost. 
B)  the above-average intellect of the average movie star. 
C)  a compensating differential. 
D)  a lack of technological advances in the movie industry. 
A)  an ability for almost everyone to enjoy movies at a relatively low cost. 
B)  the above-average intellect of the average movie star. 
C)  a compensating differential. 
D)  a lack of technological advances in the movie industry.

Question 8

Which of the following is an economic explanation for the "beauty premium"?

Accepted Answer

A)  Employers pay very attractive women less than average-looking women because they believe them to be less intelligent. 
B)  Employers pay above-average-looking men more than above-average-looking women. 
C)  Employers pay above-average-looking women more than average-looking women because customers prefer to deal with better-looking women. 
D)  Employers pay above-average-looking men more because they signal to the market that they are willing to spend more money on personal grooming,a sign of wealth and stability. 
A)  Employers pay very attractive women less than average-looking women because they believe them to be less intelligent. 
B)  Employers pay above-average-looking men more than above-average-looking women. 
C)  Employers pay above-average-looking women more than average-looking women because customers prefer to deal with better-looking women. 
D)  Employers pay above-average-looking men more because they signal to the market that they are willing to spend more money on personal grooming,a sign of wealth and stability.

Question 9

Which of the following statements is not correct?

Accepted Answer

A)  Some firms pay wages that are above the equilibrium wage. 
B)  Workers sometimes form labor unions to push their wages up. 
C)  Wages never deviate from the balance of supply and demand in the market for labor. 
D)  The federal government mandates that employers pay their workers at least as much as the minimum wage. 
A)  Some firms pay wages that are above the equilibrium wage. 
B)  Workers sometimes form labor unions to push their wages up. 
C)  Wages never deviate from the balance of supply and demand in the market for labor. 
D)  The federal government mandates that employers pay their workers at least as much as the minimum wage.

Question 10

Which of the following factors does not affect the value of a worker's marginal product?

Accepted Answer

A)  Discrimination against a particular group of workers by a firm's customers. 
B)  A worker's level of disposable income. 
C)  A worker's level of human capital. 
D)  Compensating wage differentials. 
A)  Discrimination against a particular group of workers by a firm's customers. 
B)  A worker's level of disposable income. 
C)  A worker's level of human capital. 
D)  Compensating wage differentials.

Question 11

Which of the following statements is not correct?

Accepted Answer

A)  Both the human capital theory and the signaling theory of education could explain why college graduates earn more than high school graduates. 
B)  The signaling theory of education suggests that the ability to complete a college degree is correlated with the ability to perform well in the labor market. 
C)  If the human capital theory of education is correct,a government policy that pays for additional schooling for all workers would not increase wages. 
D)  If the signaling theory of education is correct,a government policy that pays for additional schooling for all workers would not increase wages. 
A)  Both the human capital theory and the signaling theory of education could explain why college graduates earn more than high school graduates. 
B)  The signaling theory of education suggests that the ability to complete a college degree is correlated with the ability to perform well in the labor market. 
C)  If the human capital theory of education is correct,a government policy that pays for additional schooling for all workers would not increase wages. 
D)  If the signaling theory of education is correct,a government policy that pays for additional schooling for all workers would not increase wages.

Question 12

Suppose that a college student receives an offer for a summer internship with a stock brokerage firm.Unfortunately for the student,the internship is unpaid.Is it ever economically beneficial to accept an unpaid job?

Accepted Answer

A)  Yes,because the experience gained during the internship would increase the student's human capital. 
B)  No,because the opportunity cost is too high. 
C)  No,because the student is signaling to future employers that he or she is willing to accept low wages. 
D)  Yes,because accepting an unpaid job signals to future employers that the student has stable personal finances. 
A)  Yes,because the experience gained during the internship would increase the student's human capital. 
B)  No,because the opportunity cost is too high. 
C)  No,because the student is signaling to future employers that he or she is willing to accept low wages. 
D)  Yes,because accepting an unpaid job signals to future employers that the student has stable personal finances.

Question 13

The theory of efficiency wages asserts that

Accepted Answer

A)  unions are often successful in forcing employers to pay higher wages. 
B)  employers strive to hold wages below equilibrium levels. 
C)  employers may find it profitable to pay above-equilibrium wages. 
D)  efficient workers actually earn lower wages than those earned by inefficient workers. 
A)  unions are often successful in forcing employers to pay higher wages. 
B)  employers strive to hold wages below equilibrium levels. 
C)  employers may find it profitable to pay above-equilibrium wages. 
D)  efficient workers actually earn lower wages than those earned by inefficient workers.

Question 14

The job of night watchman at the Punxsutawny Phil Groundhog museum is known to have a high wage.This can be partially explained by the fact that the job is likely to

Accepted Answer

A)  require specialized skills. 
B)  be difficult. 
C)  be incredibly dull. 
D)  have minimal risk of injury. 
A)  require specialized skills. 
B)  be difficult. 
C)  be incredibly dull. 
D)  have minimal risk of injury.

Question 15

Some economists are skeptical of the argument that employers are responsible for discriminatory wage differences.They argue that market economies provide a natural remedy to employer discrimination,and that remedy is

Accepted Answer

A)  social responsibility. 
B)  the profit motive. 
C)  fear of reprisal from groups that suffer from those wage differences. 
D)  fear of reprisal from government in the form of prosecution. 
A)  social responsibility. 
B)  the profit motive. 
C)  fear of reprisal from groups that suffer from those wage differences. 
D)  fear of reprisal from government in the form of prosecution.

Question 16

A natural correction to employer discrimination in market economies is the

Accepted Answer

A)  threat of judicial review. 
B)  profit motive. 
C)  political process. 
D)  union movement. 
A)  threat of judicial review. 
B)  profit motive. 
C)  political process. 
D)  union movement.

Question 17

Profit-maximizing,competitive firms will not discriminate in the hiring of workers unless consumers exercise a preference for discrimination in product markets or governments mandate discrimination.

Accepted Answer

A) True 
 B)False

Question 18

Discrimination is an emotionally charged issue that is impossible to study objectively.

Accepted Answer

A) True 
 B)False

Question 19

The theory of efficiency wages challenges the assumption that

Accepted Answer

A)  workers are efficient. 
B)  workers have an incentive to shirk their responsibilities to their employers. 
C)  wages adjust to balance labor supply and labor demand. 
D)  firms sometimes choose to pay their workers above-equilibrium wages. 
A)  workers are efficient. 
B)  workers have an incentive to shirk their responsibilities to their employers. 
C)  wages adjust to balance labor supply and labor demand. 
D)  firms sometimes choose to pay their workers above-equilibrium wages.

Question 20

Evidence from a study of the market for baseball players using 1960s data

Accepted Answer

A)  indicated that sports with strong player associations are unlikely to experience wage discrimination. 
B)  suggested that government regulation had eliminated most evidence of wage discrimination. 
C)  found some evidence of consumer-driven wage discrimination. 
D)  found that measurement of marginal productivity was very difficult for baseball players. 
A)  indicated that sports with strong player associations are unlikely to experience wage discrimination. 
B)  suggested that government regulation had eliminated most evidence of wage discrimination. 
C)  found some evidence of consumer-driven wage discrimination. 
D)  found that measurement of marginal productivity was very difficult for baseball players.

Exam 19: Earnings and Discrimination

Philip is an average contractor in town,and he earns $40,000 a year.Billy is the best contractor in town,and he earns $480,000 a year.Philip's contracting services

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers offer two main hypotheses:

Which of the following statements is true of wages,educational attainment,and gender?

Evaluate the following statement: "The gender pay gap provides evidence of widespread,severe,ongoing discrimination by employers and fellow workers."

Which of the following factors does not affect the value of a worker's marginal product?

Discrimination occurs when the marketplace offers different opportunities to similar individuals who differ only by

The most popular movie stars have high incomes for a number of reasons.One such reason is

Which of the following is an economic explanation for the "beauty premium"?

Which of the following statements is not correct?

Which of the following factors does not affect the value of a worker's marginal product?

Which of the following statements is not correct?

Suppose that a college student receives an offer for a summer internship with a stock brokerage firm.Unfortunately for the student,the internship is unpaid.Is it ever economically beneficial to accept an unpaid job?

The theory of efficiency wages asserts that

The job of night watchman at the Punxsutawny Phil Groundhog museum is known to have a high wage.This can be partially explained by the fact that the job is likely to

Some economists are skeptical of the argument that employers are responsible for discriminatory wage differences.They argue that market economies provide a natural remedy to employer discrimination,and that remedy is

A natural correction to employer discrimination in market economies is the

Profit-maximizing,competitive firms will not discriminate in the hiring of workers unless consumers exercise a preference for discrimination in product markets or governments mandate discrimination.

Discrimination is an emotionally charged issue that is impossible to study objectively.

The theory of efficiency wages challenges the assumption that

Evidence from a study of the market for baseball players using 1960s data

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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