Question 1

Discrimination by a manager in the hiring process

Accepted Answer

A)  decreases the firm's costs. 
B)  increases the firm's costs. 
C)  is evident if a white manager refuses to hire a certain black applicant. 
D)  is evident if a male manager fails to hire a certain female applicant. 
A)  decreases the firm's costs. 
B)  increases the firm's costs. 
C)  is evident if a white manager refuses to hire a certain black applicant. 
D)  is evident if a male manager fails to hire a certain female applicant.

Question 2

Which of the following is not an explanation for why better educated workers earn more, on average, than less educated workers?

Accepted Answer

A)  The higher wages may be a compensating differential for the cost of acquiring the education. 
B)  Workers with a college degree signal their higher abilities to potential employers. 
C)  Skilled labor is increasingly becoming a substitute for unskilled labor, which raises the earnings of workers with more education. 
D)  Better educated workers are more productive, on average. 
A)  The higher wages may be a compensating differential for the cost of acquiring the education. 
B)  Workers with a college degree signal their higher abilities to potential employers. 
C)  Skilled labor is increasingly becoming a substitute for unskilled labor, which raises the earnings of workers with more education. 
D)  Better educated workers are more productive, on average.

Question 3

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 4

Bob, the manager and owner of a small company, believes in the theory of efficiency wages. As such, Bob would be most likely to agree with which of the following quotes?

Accepted Answer

A)  "The only place where success comes before work is in the dictionary." 
B)  "Work hard. Play harder." 
C)  "Pay a man for the job you want him to do." 
D)  "Imagination is more important than knowledge." 
A)  "The only place where success comes before work is in the dictionary." 
B)  "Work hard. Play harder." 
C)  "Pay a man for the job you want him to do." 
D)  "Imagination is more important than knowledge."

Question 5

According to the superstar phenomenon, the most talented person in which of the following occupations is most likely to earn extremely high wages?

Accepted Answer

A)  an electrician 
B)  a hair stylist 
C)  a journalist 
D)  an engineer 
A)  an electrician 
B)  a hair stylist 
C)  a journalist 
D)  an engineer

Question 6

Why is a construction worker never likely to earn as much as a famous athlete?

Accepted Answer

A)  Compensating differentials create a higher wage for professional athletes. 
B)  Technological progress has advanced less in the construction industry then in sports training. 
C)  Productivity levels are low in the construction industry due to the high number of people willing to be construction workers. 
D)  A construction worker can provide his services to only a limited number of customers. 
A)  Compensating differentials create a higher wage for professional athletes. 
B)  Technological progress has advanced less in the construction industry then in sports training. 
C)  Productivity levels are low in the construction industry due to the high number of people willing to be construction workers. 
D)  A construction worker can provide his services to only a limited number of customers.

Question 7

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 strengthen the discrimination complaint against Eddy's Hardware?

Accepted Answer

A)  Cowboys call in sick to work more often than farm boys. 
B)  Farm boys are more likely than cowboys to work the day shift rather than the night shift. 
C)  Cowboys' experience using hardware generally exceeds farm boys' experience using it. 
D)  On average farm boys have less experience working at the hardware store than cowboys. 
A)  Cowboys call in sick to work more often than farm boys. 
B)  Farm boys are more likely than cowboys to work the day shift rather than the night shift. 
C)  Cowboys' experience using hardware generally exceeds farm boys' experience using it. 
D)  On average farm boys have less experience working at the hardware store than cowboys.

Question 8

The belief that education makes a person more productive and thereby raises his or her wage is referred to as the

Accepted Answer

A)  signaling view of education. 
B)  natural-ability view of education. 
C)  unmeasured-variables view of education. 
D)  human-capital view of education. 
A)  signaling view of education. 
B)  natural-ability view of education. 
C)  unmeasured-variables view of education. 
D)  human-capital view of education.

Question 9

Politicians often point to wage differentials as evidence of labor market discrimination against ethnic minorities and women. Economists, however, argue against this approach because

Accepted Answer

A)  they don't believe the wage differential really exists. 
B)  they can't agree on a definition of the term "discrimination." 
C)  they believe compensating differentials account for all wage differences. 
D)  different people may have different wages for reasons unrelated to discrimination. 
A)  they don't believe the wage differential really exists. 
B)  they can't agree on a definition of the term "discrimination." 
C)  they believe compensating differentials account for all wage differences. 
D)  different people may have different wages for reasons unrelated to discrimination.

Question 10

Figure 19-7  
-Refer to Figure 19-7. The figure shows labor demand and labor supply in a non-unionized labor market. Suppose the current labor demand is D1 and the current labor supply is S1. If a firm in this market decided to pay its workers $18 per hour to increase the productivity of its workers, this firm would be paying a(n)

Accepted Answer

The answer of Figure 19-7  
-Refer to Figure 19-7....

Question 11

Discrimination is a reflection of some people's prejudice against certain groups in society.

Accepted Answer

A) True 
 B)False

Question 12

Offering different opportunities to similar individuals who differ only by race, ethnic group, sex, age, or other personal characteristics is called

Accepted Answer

A)  a compensating differential. 
B)  an efficiency wage. 
C)  discrimination. 
D)  compensating variation. 
A)  a compensating differential. 
B)  an efficiency wage. 
C)  discrimination. 
D)  compensating variation.

Question 13

Suppose that an employer can hire workers with brown hair and workers with blonde hair. Each type of worker has the same productivity. Which of the following is correct if the employer discriminates by hiring only workers with brown hair?

Accepted Answer

A)  The employer will be just as efficient as a nondiscriminating employer. 
B)  The employer will face higher costs than firms that focus only on maximizing profits. 
C)  The employer will immediately go out of business because discrimination is illegal. 
D)  The employer will face union strikes. 
A)  The employer will be just as efficient as a nondiscriminating employer. 
B)  The employer will face higher costs than firms that focus only on maximizing profits. 
C)  The employer will immediately go out of business because discrimination is illegal. 
D)  The employer will face union strikes.

Question 14

Which of the following statements can be called a productivity-revealing theory?

Accepted Answer

A)  human-capital theory and signaling theory 
B)  human-capital theory but not signaling theory 
C)  signaling theory but not human-capital theory 
D)  neither human-capital theory nor signaling theory 
A)  human-capital theory and signaling theory 
B)  human-capital theory but not signaling theory 
C)  signaling theory but not human-capital theory 
D)  neither human-capital theory nor signaling theory

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

In the country of Freedonia, men and women have the same level of education and choose different forms of work in the same proportions. The only real difference is that men typically stay home to raise young children, returning to the work force after their children enter elementary school. If no discrimination exists, then we would expect that, on average,

Accepted Answer

A)  women would earn less than men. 
B)  women would earn more than men. 
C)  men and women would earn the same wage. 
D)  wage differences between men and women would be due to differences in beauty. 
A)  women would earn less than men. 
B)  women would earn more than men. 
C)  men and women would earn the same wage. 
D)  wage differences between men and women would be due to differences in beauty.

Question 17

Scenario 19-6
Suppose that in the competitive market for auto repair, firms prefer to hire men rather than women. Assume that the women applying for positions have the same skills, experience, and work ethic as the men. As a result of this discrimination, the demand for women is lower than it otherwise would be.
-Refer to Scenario 19-6. If the firms in this market are profit-maximizers and customers do not care if a woman or a man works on their car, what will likely happen?

Accepted Answer

Women will be hired

Question 18

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 must always 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 must always adjust to balance labor supply and labor demand. 
D)  firms sometimes choose to pay their workers above-equilibrium wages.

Question 19

George and Susan work at the same brewery. George works in advertising. Susan works as a forewoman in the bottling plant. George is paid more than Susan.

Accepted Answer

A)  Because the male worker earns a higher salary than the female worker, the employer must be discriminating against women. 
B)  If George has better performance reviews than Susan, the company might be rewarding George for his high productivity. 
C)  If forepersons at bottling plants typically earn more than employees in the advertising department, then the brewery must be discriminating against women. 
D)  George might be earning more because he works the day shift while Susan works the night shift. 
A)  Because the male worker earns a higher salary than the female worker, the employer must be discriminating against women. 
B)  If George has better performance reviews than Susan, the company might be rewarding George for his high productivity. 
C)  If forepersons at bottling plants typically earn more than employees in the advertising department, then the brewery must be discriminating against women. 
D)  George might be earning more because he works the day shift while Susan works the night shift.

Question 20

In what way do competitive markets have a "natural remedy" for discriminatory hiring practices?

Accepted Answer

A)  Governments regulate to resolve problems of discrimination. 
B)  Profit-maximizing firms that do not discriminate tend to replace firms that discriminate. 
C)  Wages paid to groups that are victimized by discrimination are eventually bid up to above-equilibrium levels. 
D)  Discrimination is usually the outcome of rational decision-making processes, and competitive markets produce rational outcomes. 
A)  Governments regulate to resolve problems of discrimination. 
B)  Profit-maximizing firms that do not discriminate tend to replace firms that discriminate. 
C)  Wages paid to groups that are victimized by discrimination are eventually bid up to above-equilibrium levels. 
D)  Discrimination is usually the outcome of rational decision-making processes, and competitive markets produce rational outcomes.

Discrimination by a manager in the hiring process

Which of the following is not an explanation for why better educated workers earn more, on average, than less educated workers?

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

Bob, the manager and owner of a small company, believes in the theory of efficiency wages. As such, Bob would be most likely to agree with which of the following quotes?

According to the superstar phenomenon, the most talented person in which of the following occupations is most likely to earn extremely high wages?

Why is a construction worker never likely to earn as much as a famous athlete?

The belief that education makes a person more productive and thereby raises his or her wage is referred to as the

Politicians often point to wage differentials as evidence of labor market discrimination against ethnic minorities and women. Economists, however, argue against this approach because

Discrimination is a reflection of some people's prejudice against certain groups in society.

Offering different opportunities to similar individuals who differ only by race, ethnic group, sex, age, or other personal characteristics is called

Suppose that an employer can hire workers with brown hair and workers with blonde hair. Each type of worker has the same productivity. Which of the following is correct if the employer discriminates by hiring only workers with brown hair?

Which of the following statements can be called a productivity-revealing theory?

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

The theory of efficiency wages challenges the assumption that

George and Susan work at the same brewery. George works in advertising. Susan works as a forewoman in the bottling plant. George is paid more than Susan.

In what way do competitive markets have a "natural remedy" for discriminatory hiring practices?

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

Discrimination by a manager in the hiring process

Which of the following is not an explanation for why better educated workers earn more, on average, than less educated workers?

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

Bob, the manager and owner of a small company, believes in the theory of efficiency wages. As such, Bob would be most likely to agree with which of the following quotes?

According to the superstar phenomenon, the most talented person in which of the following occupations is most likely to earn extremely high wages?

Why is a construction worker never likely to earn as much as a famous athlete?

The belief that education makes a person more productive and thereby raises his or her wage is referred to as the

Politicians often point to wage differentials as evidence of labor market discrimination against ethnic minorities and women. Economists, however, argue against this approach because

Discrimination is a reflection of some people's prejudice against certain groups in society.

Offering different opportunities to similar individuals who differ only by race, ethnic group, sex, age, or other personal characteristics is called

Suppose that an employer can hire workers with brown hair and workers with blonde hair. Each type of worker has the same productivity. Which of the following is correct if the employer discriminates by hiring only workers with brown hair?

Which of the following statements can be called a productivity-revealing theory?

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

The theory of efficiency wages challenges the assumption that

George and Susan work at the same brewery. George works in advertising. Susan works as a forewoman in the bottling plant. George is paid more than Susan.

In what way do competitive markets have a "natural remedy" for discriminatory hiring practices?

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