Question 1

A college degree makes a person more productive according to

Accepted Answer

A)  both the human-capital and the signaling theories of education. 
B)  the human-capital but not the signaling theory of education. 
C)  the signaling but not the human-capital theory of education. 
D)  neither the human-capital nor the signaling theory of education. 
A)  both the human-capital and the signaling theories of education. 
B)  the human-capital but not the signaling theory of education. 
C)  the signaling but not the human-capital theory of education. 
D)  neither the human-capital nor the signaling theory of education.

Question 2

The signaling theory of education maintains that workers who complete specific levels of education enhance their productivity through education.

Accepted Answer

A) True 
 B)False

Question 3

It is increasingly clear that technological change is the only explanation for an expanding wage gap between high- skill and low-skill workers.

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)  wages are unlikely to be affected by job requirements. 
B)  since the lifeguard job would expose him to a threat of skin cancer, the wage will be low. 
C)  if the lifeguard job has a requirement for special training or certification, the wage offer will be higher than otherwise. 
D)  if the lifeguard job also requires a willingness to clean public restrooms, the wage offer will be lower than otherwise. 
A)  wages are unlikely to be affected by job requirements. 
B)  since the lifeguard job would expose him to a threat of skin cancer, the wage will be low. 
C)  if the lifeguard job has a requirement for special training or certification, the wage offer will be higher than otherwise. 
D)  if the lifeguard job also requires a willingness to clean public restrooms, the wage offer will be lower than otherwise.

Question 5

If there is systematic discrimination against a group of workers, then the wage paid to those workers likely will be

Accepted Answer

A)  lower due to a higher supply of workers in that group. 
B)  lower due to a lower demand for workers in that group. 
C)  higher due to a lower supply of workers in that group. 
D)  higher due to a higher demand for workers in that group. 
A)  lower due to a higher supply of workers in that group. 
B)  lower due to a lower demand for workers in that group. 
C)  higher due to a lower supply of workers in that group. 
D)  higher due to a higher demand for workers in that group.

Question 6

Which of these instances would constitute labor-market discrimination? Henry receives a higher wage than Ryan. Henry and Ryan are identical in all of their labor-market characteristics except that

Accepted Answer

A)  Henry is a college graduate, and Ryan has only a high school diploma. 
B)  Henry has 10 years of experience at his job, whereas Ryan has only five years of experience. 
C)  Henry is white and Ryan is Black. 
D)  by objective measures Henry consistently outperforms Ryan. 
A)  Henry is a college graduate, and Ryan has only a high school diploma. 
B)  Henry has 10 years of experience at his job, whereas Ryan has only five years of experience. 
C)  Henry is white and Ryan is Black. 
D)  by objective measures Henry consistently outperforms Ryan.

Question 7

Which of the following statements is correct?

Accepted Answer

A)  The human-capital theory of education could be called a productivity-enhancing theory. 
B)  The human-capital theory of education could be called a productivity-revealing theory. 
C)  The signaling theory of education could be called a productivity-enhancing theory. 
D)  The signaling theory of education has been disproven by a number of prominent economists. 
A)  The human-capital theory of education could be called a productivity-enhancing theory. 
B)  The human-capital theory of education could be called a productivity-revealing theory. 
C)  The signaling theory of education could be called a productivity-enhancing theory. 
D)  The signaling theory of education has been disproven by a number of prominent economists.

Question 8

Why do college graduates earn more in wages than workers with only a high school diploma?

Accepted Answer

They have

Question 9

According to proponents of the signaling theory of education, an increase in the education levels of all workers would

Accepted Answer

A)  increase workers' productivity and increase their wages. 
B)  increase workers' productivity but leave their wages unaffected. 
C)  leave workers' productivity unaffected but increase their wages. 
D)  leave workers' productivity and wages unaffected. 
A)  increase workers' productivity and increase their wages. 
B)  increase workers' productivity but leave their wages unaffected. 
C)  leave workers' productivity unaffected but increase their wages. 
D)  leave workers' productivity and wages unaffected.

Question 10

Sometimes workers earn higher wages through chance.

Accepted Answer

A) True 
 B)False

Question 11

After graduating from college, you receive job offers from five different accounting firms. All job offers have a different compensation package. Is it irrational for you to accept an offer that doesn't provide the highest level of monetary compensation? Use the concept of compensating differentials to explain your answer.

Accepted Answer

Compensating differentials refer to diff

Question 12

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 13

Suppose that a company hires recent college graduates for two types of jobs, sales people and credit analysts. The hours worked and skill levels are the same for both positions. The sales people get to travel to several desirable locations, whereas the credit analysts do not leave the home office. When comparing the salaries of the two positions, it is likely that the company pays the

Accepted Answer

A)  sales people less as a compensating differential. 
B)  credit analysts less as a compensating differential. 
C)  same salary for both positions because they require the same skill level. 
D)  same salary for both positions because it would be illegal to do otherwise. 
A)  sales people less as a compensating differential. 
B)  credit analysts less as a compensating differential. 
C)  same salary for both positions because they require the same skill level. 
D)  same salary for both positions because it would be illegal to do otherwise.

Question 14

Studies have shown that union workers earn about

Accepted Answer

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

Question 15

Which of the following is not an example of a compensating differential?

Accepted Answer

A)  Chris is a consultant who is paid more than other workers with similar skills because he is required to travel 80% of the time. 
B)  Abby is a teacher who is paid less than other workers with similar skills because she does not have to work during the summer months. 
C)  Ben is a businessman who is paid more than other workers with similar skills because he graduated from a prestigious university with honors. 
D)  Daphne is a skyscraper window-washer who is paid more than other workers with similar skills because of the risk she faces in her daily job. 
A)  Chris is a consultant who is paid more than other workers with similar skills because he is required to travel 80% of the time. 
B)  Abby is a teacher who is paid less than other workers with similar skills because she does not have to work during the summer months. 
C)  Ben is a businessman who is paid more than other workers with similar skills because he graduated from a prestigious university with honors. 
D)  Daphne is a skyscraper window-washer who is paid more than other workers with similar skills because of the risk she faces in her daily job.

Question 16

Experimental evidence indicates women choose less competitive environments than men.

Accepted Answer

A) True 
 B)False

Question 17

Nancy and Sheila are both loan officers who graduated from the same university with bachelors' degrees in economics, and achieved similar performance reviews. Nancy started working one year before Sheila. If Nancy earns a higher annual salary than Sheila because she has more experience, the employer is

Accepted Answer

A)  rewarding increases in human capital. 
B)  paying efficiency wages. 
C)  practicing discrimination. 
D)  paying a compensating differential. 
A)  rewarding increases in human capital. 
B)  paying efficiency wages. 
C)  practicing discrimination. 
D)  paying a compensating differential.

Question 18

In the early twentieth century, streetcars in many southern cities were segregated by race. This racial segregation was the result of

Accepted Answer

A)  laws that required such segregation. 
B)  long-standing southern traditions about which the law was silent. 
C)  streetcar firms trying to maximize profits. 
D)  streetcar firms trying to minimize costs. 
A)  laws that required such segregation. 
B)  long-standing southern traditions about which the law was silent. 
C)  streetcar firms trying to maximize profits. 
D)  streetcar firms trying to minimize costs.

Question 19

The idea of paying workers an efficiency wage is that

Accepted Answer

A)  employers will find it profitable to hire more workers. 
B)  workers receive wages consistent with their specific compensating differentials. 
C)  workers and management gain at the expense of the stockholders of the company. 
D)  workers have the incentive to work harder, thus increasing their marginal productivity. 
A)  employers will find it profitable to hire more workers. 
B)  workers receive wages consistent with their specific compensating differentials. 
C)  workers and management gain at the expense of the stockholders of the company. 
D)  workers have the incentive to work harder, thus increasing their marginal productivity.

Question 20

Many studies of wage discrimination have been conducted on professional sports teams. This industry is easier to study than others because the professional teams have many objective measures of

Accepted Answer

The answer of Many studies of wage discrimination have been...

A college degree makes a person more productive according to

The signaling theory of education maintains that workers who complete specific levels of education enhance their productivity through education.

It is increasingly clear that technological change is the only explanation for an expanding wage gap between high- skill and low-skill workers.

If there is systematic discrimination against a group of workers, then the wage paid to those workers likely will be

Which of these instances would constitute labor-market discrimination? Henry receives a higher wage than Ryan. Henry and Ryan are identical in all of their labor-market characteristics except that

Which of the following statements is correct?

Why do college graduates earn more in wages than workers with only a high school diploma?

According to proponents of the signaling theory of education, an increase in the education levels of all workers would

Sometimes workers earn higher wages through chance.

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

Studies have shown that union workers earn about

Which of the following is not an example of a compensating differential?

Experimental evidence indicates women choose less competitive environments than men.

In the early twentieth century, streetcars in many southern cities were segregated by race. This racial segregation was the result of

The idea of paying workers an efficiency wage is that

Many studies of wage discrimination have been conducted on professional sports teams. This industry is easier to study than others because the professional teams have many objective measures of

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

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Exam 19: Earnings and Discrimination

A college degree makes a person more productive according to

The signaling theory of education maintains that workers who complete specific levels of education enhance their productivity through education.

It is increasingly clear that technological change is the only explanation for an expanding wage gap between high- skill and low-skill workers.

If there is systematic discrimination against a group of workers, then the wage paid to those workers likely will be

Which of these instances would constitute labor-market discrimination? Henry receives a higher wage than Ryan. Henry and Ryan are identical in all of their labor-market characteristics except that

Which of the following statements is correct?

Why do college graduates earn more in wages than workers with only a high school diploma?

According to proponents of the signaling theory of education, an increase in the education levels of all workers would

Sometimes workers earn higher wages through chance.

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

Studies have shown that union workers earn about

Which of the following is not an example of a compensating differential?

Experimental evidence indicates women choose less competitive environments than men.

In the early twentieth century, streetcars in many southern cities were segregated by race. This racial segregation was the result of

The idea of paying workers an efficiency wage is that

Many studies of wage discrimination have been conducted on professional sports teams. This industry is easier to study than others because the professional teams have many objective measures of

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