Question 1

Which of the following is an example of a compensating differential?

Accepted Answer

A)  Two workers with different undergraduate majors earn different salaries. 
B)  Two workers with different years of experience earn different salaries. 
C)  Two workers whose jobs entail different risks earn different salaries. 
D)  Two workers with different levels of personal attractiveness earn different salaries. 
A)  Two workers with different undergraduate majors earn different salaries. 
B)  Two workers with different years of experience earn different salaries. 
C)  Two workers whose jobs entail different risks earn different salaries. 
D)  Two workers with different levels of personal attractiveness earn different salaries.

Question 2

Tiffany has just graduated from Stanford University and has applied for a job as an engineer at a manufacturing plant. The manufacturer decides to offer Tiffany a job because it perceives she's gained valuable skills while at Stanford. To which of the following views of education does the manufacturer subscribe?

Accepted Answer

A)  signaling 
B)  human-capital view 
C)  compensating-differentials 
D)  superstar 
A)  signaling 
B)  human-capital view 
C)  compensating-differentials 
D)  superstar

Question 3

Economists are skeptical that discrimination is employer driven because

Accepted Answer

A)  discrimination cannot exist in markets. 
B)  employers are not really interested in maximizing profit. 
C)  employers typically base wages paid on the prevailing market wage. 
D)  holding productivity constant, a profit-maximizing employer will hire the cheapest labor available. 
A)  discrimination cannot exist in markets. 
B)  employers are not really interested in maximizing profit. 
C)  employers typically base wages paid on the prevailing market wage. 
D)  holding productivity constant, a profit-maximizing employer will hire the cheapest labor available.

Question 4

In the signaling theory of education,

Accepted Answer

A)  discrimination does not affect wage differentials. 
B)  schooling makes workers more productive in the long-run. 
C)  schooling makes workers more productive in the short-run. 
D)  the worker signals to the employer that he is a valuable employee because he was willing to spend time to get an education. 
A)  discrimination does not affect wage differentials. 
B)  schooling makes workers more productive in the long-run. 
C)  schooling makes workers more productive in the short-run. 
D)  the worker signals to the employer that he is a valuable employee because he was willing to spend time to get an education.

Question 5

Which of the following explains the "beauty premium" differences in wages?

Accepted Answer

A)  People who spend time on their personal appearance may send a signal that they are more productive workers. 
B)  Personal appearance and intelligence are inversely related. 
C)  The "superstar phenomenon" explains the "beauty premium." 
D)  Better-looking people are more efficient; thus, they are paid an efficiency wage. 
A)  People who spend time on their personal appearance may send a signal that they are more productive workers. 
B)  Personal appearance and intelligence are inversely related. 
C)  The "superstar phenomenon" explains the "beauty premium." 
D)  Better-looking people are more efficient; thus, they are paid an efficiency wage.

Question 6

If an employer's behavior is supportive of the theory of efficiency wages, the employer would

Accepted Answer

A)  raise wages in an effort to increase worker effort. 
B)  raise wages in an effort to increase worker turnover. 
C)  decrease wages in an effort to increase worker effort. 
D)  decrease wages in an effort to increase worker turnover. 
A)  raise wages in an effort to increase worker effort. 
B)  raise wages in an effort to increase worker turnover. 
C)  decrease wages in an effort to increase worker effort. 
D)  decrease wages in an effort to increase worker turnover.

Question 7

Customer discrimination is illegal in the United States.

Accepted Answer

A) True 
 B)False

Question 8

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 9

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 10

Between 1975 and 2011, the wage gap between men with a high school education and men with a college education increased. In particular, in 2011 men with a college degree earned about

Accepted Answer

A)  10% more than men with a high school education. 
B)  25% more than men with a high school education. 
C)  75% more than men with a high school education. 
D)  90% more than men with a high school education. 
A)  10% more than men with a high school education. 
B)  25% more than men with a high school education. 
C)  75% more than men with a high school education. 
D)  90% more than men with a high school education.

Question 11

Wages of doctors tend to be higher than wages of bankers. Which of the following is a compensating differential explaining the difference in wages?

Accepted Answer

A)  Doctors have the stress of being responsible for other peoples' lives while bankers do not. 
B)  Doctors are on call to work nights and weekends, while bankers work traditional business hours. 
C)  Doctors must pay for malpractice insurance in case they are sued for a mistake on the joc. 
D)  All of the above are compensating differentials. 
A)  Doctors have the stress of being responsible for other peoples' lives while bankers do not. 
B)  Doctors are on call to work nights and weekends, while bankers work traditional business hours. 
C)  Doctors must pay for malpractice insurance in case they are sued for a mistake on the joc. 
D)  All of the above are compensating differentials.

Question 12

Which of the following is not an example of human capital for a college economics professor?

Accepted Answer

A)  years of experience 
B)  a doctorate in economics 
C)  chalk 
D)  what the professor has learned from seminar courses on effective teaching methods 
A)  years of experience 
B)  a doctorate in economics 
C)  chalk 
D)  what the professor has learned from seminar courses on effective teaching methods

Question 13

Consumers are often a primary source of discrimination in labor markets.

Accepted Answer

A) True 
 B)False

Question 14

Studies of professional sports teams suggest that, in sports, racial discrimination in previous decades was

Accepted Answer

A)  rare. 
B)  common and that owners of teams are largely to blame. 
C)  common and that customers (fans) are largely to blame. 
D)  None of the above is correct; there are no reliable studies of discrimination in sports due to the difficulties inherent in measuring athletes' productivity. 
A)  rare. 
B)  common and that owners of teams are largely to blame. 
C)  common and that customers (fans) are largely to blame. 
D)  None of the above is correct; there are no reliable studies of discrimination in sports due to the difficulties inherent in measuring athletes' productivity.

Question 15

In the early twentieth century, racial segregation of streetcars in the southern cities was largely opposed by

Accepted Answer

A)  streetcar firms. 
B)  government officials. 
C)  Federal lawyers applying the Sherman antitrust laws. 
D)  consumers. 
A)  streetcar firms. 
B)  government officials. 
C)  Federal lawyers applying the Sherman antitrust laws. 
D)  consumers.

Question 16

According to the Hamermesh and Biddle study, people deemed more attractive than average earn

Accepted Answer

A)  30-40 percent more than unattractive people. 
B)  about 5 percent more than average looking people. 
C)  the same as average looking people and 15-20 percent more than unattractive people. 
D)  25 percent more than average looking people and 50 percent more than unattractive people. 
A)  30-40 percent more than unattractive people. 
B)  about 5 percent more than average looking people. 
C)  the same as average looking people and 15-20 percent more than unattractive people. 
D)  25 percent more than average looking people and 50 percent more than unattractive people.

Question 17

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 motel job requires some night shift work, wages will be lower than otherwise. 
B)  the job that is more fun will have a higher wage. 
C)  if the motel job doesn't require any special skills, the wage offer will be lower than otherwise. 
D)  All of the above are correct. 
A)  if the motel job requires some night shift work, wages will be lower than otherwise. 
B)  the job that is more fun will have a higher wage. 
C)  if the motel job doesn't require any special skills, the wage offer will be lower than otherwise. 
D)  All of the above are correct.

Question 18

If government regulations make a certain job less dangerous, then we'd expect that the supply of labor for that job would

Accepted Answer

A)  increase, which by itself would raise the wage for that job. 
B)  increase, which by itself would reduce the wage for that job. 
C)  decrease, which by itself would raise the wage for that joc. 
D)  decrease, which by itself would reduce the wage for that job. 
A)  increase, which by itself would raise the wage for that job. 
B)  increase, which by itself would reduce the wage for that job. 
C)  decrease, which by itself would raise the wage for that joc. 
D)  decrease, which by itself would reduce the wage for that job.

Question 19

Expenditures on human capital

Accepted Answer

A)  reflect an expectation of some future return on the investment. 
B)  are generally embodied in a specific individual. 
C)  reflect an investment of resources today to raise productivity in the future. 
D)  All of the above are correct. 
A)  reflect an expectation of some future return on the investment. 
B)  are generally embodied in a specific individual. 
C)  reflect an investment of resources today to raise productivity in the future. 
D)  All of the above are correct.

Question 20

The fact that movie star Angelina Jolie's salary is much higher than the salary earned by the world's best nurse can best be explained by the

Accepted Answer

A)  failure of the market to reward talent fairly. 
B)  large number of nurses. 
C)  willingness of some people to accept a lower wage rate in order to do work they find personally rewarding. 
D)  superstar phenomenon. 
A)  failure of the market to reward talent fairly. 
B)  large number of nurses. 
C)  willingness of some people to accept a lower wage rate in order to do work they find personally rewarding. 
D)  superstar phenomenon.

Which of the following is an example of a compensating differential?

Economists are skeptical that discrimination is employer driven because

In the signaling theory of education,

Which of the following explains the "beauty premium" differences in wages?

If an employer's behavior is supportive of the theory of efficiency wages, the employer would

Customer discrimination is illegal in the United States.

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

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

Between 1975 and 2011, the wage gap between men with a high school education and men with a college education increased. In particular, in 2011 men with a college degree earned about

Wages of doctors tend to be higher than wages of bankers. Which of the following is a compensating differential explaining the difference in wages?

Which of the following is not an example of human capital for a college economics professor?

Consumers are often a primary source of discrimination in labor markets.

Studies of professional sports teams suggest that, in sports, racial discrimination in previous decades was

In the early twentieth century, racial segregation of streetcars in the southern cities was largely opposed by

According to the Hamermesh and Biddle study, people deemed more attractive than average earn

If government regulations make a certain job less dangerous, then we'd expect that the supply of labor for that job would

Expenditures on human capital

The fact that movie star Angelina Jolie's salary is much higher than the salary earned by the world's best nurse can best be explained by the

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

Which of the following is an example of a compensating differential?

Economists are skeptical that discrimination is employer driven because

In the signaling theory of education,

Which of the following explains the "beauty premium" differences in wages?

If an employer's behavior is supportive of the theory of efficiency wages, the employer would

Customer discrimination is illegal in the United States.

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

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

Between 1975 and 2011, the wage gap between men with a high school education and men with a college education increased. In particular, in 2011 men with a college degree earned about

Wages of doctors tend to be higher than wages of bankers. Which of the following is a compensating differential explaining the difference in wages?

Which of the following is not an example of human capital for a college economics professor?

Consumers are often a primary source of discrimination in labor markets.

Studies of professional sports teams suggest that, in sports, racial discrimination in previous decades was

In the early twentieth century, racial segregation of streetcars in the southern cities was largely opposed by

According to the Hamermesh and Biddle study, people deemed more attractive than average earn

If government regulations make a certain job less dangerous, then we'd expect that the supply of labor for that job would

Expenditures on human capital

The fact that movie star Angelina Jolie's salary is much higher than the salary earned by the world's best nurse can best be explained by the

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