Question 1

When the supply of workers is plentiful, one would predict that market wages would be

Accepted Answer

A)  determined outside the domain of economic theory. 
B)  determined solely by factors that affect demand. 
C)  low, other things equal. 
D)  high, other things equal. 
A)  determined outside the domain of economic theory. 
B)  determined solely by factors that affect demand. 
C)  low, other things equal. 
D)  high, other things equal. C

Question 2

Human capital is

Accepted Answer

A)  a stock of equipment and structures. 
B)  the result of investments workers make in themselves such as on-the-job training. 
C)  a difference in wages that arises to offset the nonmonetary characteristics of different jobs. 
D)  inversely related to the supply of workers. 
A)  a stock of equipment and structures. 
B)  the result of investments workers make in themselves such as on-the-job training. 
C)  a difference in wages that arises to offset the nonmonetary characteristics of different jobs. 
D)  inversely related to the supply of workers. B

Question 3

Al and Steve are both reporters at the same newspaper. Al is black and Steve is white. Al earns less than Steve. Which of the following can explain why Al earns less?

Accepted Answer

A)  Although both have BA's in Journalism, Al's K­12 and college education were of a lower quality than Steve's. 
B)  Al has greater experience. 
C)  Al works the night shift and Steve works the day shift. 
D)  Al writes editorials which are very popular with customers, while Steve covers the police report which fewer subscribers read. 
A)  Although both have BA's in Journalism, Al's K­12 and college education were of a lower quality than Steve's. 
B)  Al has greater experience. 
C)  Al works the night shift and Steve works the day shift. 
D)  Al writes editorials which are very popular with customers, while Steve covers the police report which fewer subscribers read. A

Question 4

Scenario 19-3
In the small town of Hamilton, Montana, there is a local hardware store called Eddy's Hardware. There are only two types of workers who apply for jobs at Eddy's Hardware: cowboys and farm boys. Local politicians have received numerous complaints that Eddy's Hardware is practicing wage discrimination against farm boys. Eddy's Hardware denies the complaint and says the store is only trying to maximize profit.
-Refer to Scenario 19-3. Which of the following statements would weaken the discrimination complaint against Eddy's Hardware?

Accepted Answer

A)  Farm boys are more productive than cowboys. 
B)  Farm boys work longer hours than cowboys and their effort is greater. 
C)  Farm boys are generally less educated than cowboys in the field of hardware. 
D)  All of the above would weaken the discrimination complaint. 
A)  Farm boys are more productive than cowboys. 
B)  Farm boys work longer hours than cowboys and their effort is greater. 
C)  Farm boys are generally less educated than cowboys in the field of hardware. 
D)  All of the above would weaken the discrimination complaint.

Question 5

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 6

Job A is hard, dull, and dangerous. Job B is easy, fun, and safe. All else equal, we would expect Job A to pay

Accepted Answer

A)  higher wages than Job B because the labor supplied for Job B will be greater. 
B)  lower wages than Job B because the labor supplied for Job B will be greater. 
C)  higher wages than Job B because the labor supplied for Job A will be greater. 
D)  lower wages than Job B because the labor supplied for Job A will be greater. 
A)  higher wages than Job B because the labor supplied for Job B will be greater. 
B)  lower wages than Job B because the labor supplied for Job B will be greater. 
C)  higher wages than Job B because the labor supplied for Job A will be greater. 
D)  lower wages than Job B because the labor supplied for Job A will be greater.

Question 7

Consider two groups of workers of equal skill level and experience: those who collect garbage and those who stuff envelopes with campaign fliers. Which group is likely to be paid more and why?

Accepted Answer

garbage co

Question 8

When discrimination occurs as a result of employer prejudice, discriminating firms do not maximize profits.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following could explain the changing gap in income between unskilled and skilled workers in the United States?

Accepted Answer

A)  International trade has decreased the domestic demand for skilled labor and increased the domestic demand for unskilled labor. 
B)  Certain technological changes such as the introduction of computers have increased the domestic demand for skilled labor and decreased the domestic demand for unskilled labor. 
C)  Both a and b are correct. 
D)  Neither a nor b is correct. 
A)  International trade has decreased the domestic demand for skilled labor and increased the domestic demand for unskilled labor. 
B)  Certain technological changes such as the introduction of computers have increased the domestic demand for skilled labor and decreased the domestic demand for unskilled labor. 
C)  Both a and b are correct. 
D)  Neither a nor b is correct.

Question 10

According to the signaling theory of education,

Accepted Answer

A)  schooling sends signals to employers in much the same way that advertising sends signals to consumers. 
B)  a person becomes more productive by earning a college degree. 
C)  education is less important than natural ability. 
D)  All of the above are correct. 
A)  schooling sends signals to employers in much the same way that advertising sends signals to consumers. 
B)  a person becomes more productive by earning a college degree. 
C)  education is less important than natural ability. 
D)  All of the above are correct.

Question 11

A prestigious private high school requires each of its teachers to have a Ph.D. in the subject they teach. This requirement is likely to

Accepted Answer

A)  increase the supply of teachers to this school. 
B)  increase wages for teachers at the private school relative to those at public schools. 
C)  decrease the marginal product of teachers at the private school. 
D)  All of the above are correct. 
A)  increase the supply of teachers to this school. 
B)  increase wages for teachers at the private school relative to those at public schools. 
C)  decrease the marginal product of teachers at the private school. 
D)  All of the above are correct.

Question 12

Scenario 19-5
Jason works part-time at a grocery store after school. Jason has worked at the store for two years but still hasn't received a wage increase, even though newer employees have received raises. Jason has threatened his employer with a lawsuit if he doesn't get a raise in the next few weeks. Jason believes he is a victim of labor-market discrimination.
-Refer to Scenario 19-5. In a competitive market for grocery store employees, why might Jason's wage differential persist?

Accepted Answer

A)  Jason works harder than the other employees. 
B)  Jason may choose to do tasks other workers find undesirable. 
C)  Jason's amiable personality allows him to work well with his co­workers. 
D)  None of the above is correct. 
A)  Jason works harder than the other employees. 
B)  Jason may choose to do tasks other workers find undesirable. 
C)  Jason's amiable personality allows him to work well with his co­workers. 
D)  None of the above is correct.

Question 13

Human capital is

Accepted Answer

A)  a stock of equipment and structures. 
B)  the result of investments workers make in themselves such as education. 
C)  a difference in wages that arises to offset the nonmonetary characteristics of different jobs. 
D)  a characteristic that affects a worker's self­esteem but not her wages. 
A)  a stock of equipment and structures. 
B)  the result of investments workers make in themselves such as education. 
C)  a difference in wages that arises to offset the nonmonetary characteristics of different jobs. 
D)  a characteristic that affects a worker's self­esteem but not her wages.

Question 14

In order to explain the changing gap in earnings between skilled and unskilled workers in recent years, economists have proposed two hypotheses. One hypothesis emphasizes

Accepted Answer

A)  compensating differentials. 
B)  the increased recognition that a larger stock of human capital usually leads to higher earnings. 
C)  the decreasing importance of labor unions. 
D)  the increasing importance of international trade. 
A)  compensating differentials. 
B)  the increased recognition that a larger stock of human capital usually leads to higher earnings. 
C)  the decreasing importance of labor unions. 
D)  the increasing importance of international trade.

Question 15

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 16

Which of the following is an example of labor-market discrimination? You may assume that worker A and worker B have identical characteristics except for the ones listed. A firm offers a higher salary to worker A than worker B because worker A

Accepted Answer

A)  has more education. 
B)  is willing to work the night shift. 
C)  is a man, whereas worker B is a woman. 
D)  has better performance reviews, indicating higher productivity. 
A)  has more education. 
B)  is willing to work the night shift. 
C)  is a man, whereas worker B is a woman. 
D)  has better performance reviews, indicating higher productivity.

Question 17

When an employer pays the cost of educating a worker, it is likely that the employer

Accepted Answer

A)  is demonstrating altruistic motives. 
B)  is pursuing some objective other than profit-maximization. 
C)  hopes to recapture his investment in the form of increased labor productivity. 
D)  receives reimbursement from the government for the cost of the education. 
A)  is demonstrating altruistic motives. 
B)  is pursuing some objective other than profit-maximization. 
C)  hopes to recapture his investment in the form of increased labor productivity. 
D)  receives reimbursement from the government for the cost of the education.

Question 18

Which of the following is an example of customer discrimination?

Accepted Answer

A)  European soccer players earn more than U.S. soccer players since soccer is more popular in Europe. 
B)  Male basketball players in the NBA earn higher salaries than female basketball players in the WNBA since viewers prefer watching NBA games. 
C)  Golfers on the men's PGA tour earn more than golfers on the women's LPGA tour since people prefer watching the men play golf. 
D)  All of the above are examples of customer discrimination. 
A)  European soccer players earn more than U.S. soccer players since soccer is more popular in Europe. 
B)  Male basketball players in the NBA earn higher salaries than female basketball players in the WNBA since viewers prefer watching NBA games. 
C)  Golfers on the men's PGA tour earn more than golfers on the women's LPGA tour since people prefer watching the men play golf. 
D)  All of the above are examples of customer discrimination.

Question 19

According to economists Hamermesh and Biddle, how much more do people who are deemed more attractive than average earn?

Accepted Answer

The answer of According to economists Hamermesh and Biddle, how...

Question 20

In determining wages, ability, effort, and chance

Accepted Answer

A)  probably play no role whatsoever. 
B)  play a role, but their importance is hard to gauge since ability, effort, and chance are hard to measure. 
C)  play a role, and that role is fully captured in easy-to-measure factors such as human capital and age. 
D)  play a role, and it is fully explained within the context of compensating differentials. 
A)  probably play no role whatsoever. 
B)  play a role, but their importance is hard to gauge since ability, effort, and chance are hard to measure. 
C)  play a role, and that role is fully captured in easy-to-measure factors such as human capital and age. 
D)  play a role, and it is fully explained within the context of compensating differentials.

When the supply of workers is plentiful, one would predict that market wages would be

Human capital is

Al and Steve are both reporters at the same newspaper. Al is black and Steve is white. Al earns less than Steve. Which of the following can explain why Al earns less?

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

Job A is hard, dull, and dangerous. Job B is easy, fun, and safe. All else equal, we would expect Job A to pay

Consider two groups of workers of equal skill level and experience: those who collect garbage and those who stuff envelopes with campaign fliers. Which group is likely to be paid more and why?

When discrimination occurs as a result of employer prejudice, discriminating firms do not maximize profits.

Which of the following could explain the changing gap in income between unskilled and skilled workers in the United States?

According to the signaling theory of education,

A prestigious private high school requires each of its teachers to have a Ph.D. in the subject they teach. This requirement is likely to

Human capital is

In order to explain the changing gap in earnings between skilled and unskilled workers in recent years, economists have proposed two hypotheses. One hypothesis emphasizes

Economists who study labor markets have discovered that

Which of the following is an example of labor-market discrimination? You may assume that worker A and worker B have identical characteristics except for the ones listed. A firm offers a higher salary to worker A than worker B because worker A

When an employer pays the cost of educating a worker, it is likely that the employer

Which of the following is an example of customer discrimination?

According to economists Hamermesh and Biddle, how much more do people who are deemed more attractive than average earn?

In determining wages, ability, effort, and chance

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

Filters

Exam 19: Earnings and Discrimination

When the supply of workers is plentiful, one would predict that market wages would be

Human capital is

Al and Steve are both reporters at the same newspaper. Al is black and Steve is white. Al earns less than Steve. Which of the following can explain why Al earns less?

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

Job A is hard, dull, and dangerous. Job B is easy, fun, and safe. All else equal, we would expect Job A to pay

Consider two groups of workers of equal skill level and experience: those who collect garbage and those who stuff envelopes with campaign fliers. Which group is likely to be paid more and why?

When discrimination occurs as a result of employer prejudice, discriminating firms do not maximize profits.

Which of the following could explain the changing gap in income between unskilled and skilled workers in the United States?

According to the signaling theory of education,

A prestigious private high school requires each of its teachers to have a Ph.D. in the subject they teach. This requirement is likely to

Human capital is

In order to explain the changing gap in earnings between skilled and unskilled workers in recent years, economists have proposed two hypotheses. One hypothesis emphasizes

Economists who study labor markets have discovered that

Which of the following is an example of labor-market discrimination? You may assume that worker A and worker B have identical characteristics except for the ones listed. A firm offers a higher salary to worker A than worker B because worker A

When an employer pays the cost of educating a worker, it is likely that the employer

Which of the following is an example of customer discrimination?

According to economists Hamermesh and Biddle, how much more do people who are deemed more attractive than average earn?

In determining wages, ability, effort, and chance

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

Filters