Question 1

The market wage could be higher than the equilibrium wage if a worker

Accepted Answer

A)  is a superstar. 
B)  belongs to a labor union. 
C)  has more human capital. 
D)  All of the above are correct. 
A)  is a superstar. 
B)  belongs to a labor union. 
C)  has more human capital. 
D)  All of the above are correct.

Question 2

The signaling theory of education suggests that when people earn a college degree they do not become more productive, but they do signal their high ability to prospective employers.

Accepted Answer

A) True 
 B)False

Question 3

The case study of segregated street cars in southern cities illustrates which of the following?

Accepted Answer

A)  Streetcar owners opposed segregation laws primarily because they were concerned with civil rights. 
B)  Segregation laws were supported by both local business owners and patrons. 
C)  Firms usually care more about maximizing profits than discriminating against certain customers. 
D)  Laws passed by the government cannot reduce discrimination. 
A)  Streetcar owners opposed segregation laws primarily because they were concerned with civil rights. 
B)  Segregation laws were supported by both local business owners and patrons. 
C)  Firms usually care more about maximizing profits than discriminating against certain customers. 
D)  Laws passed by the government cannot reduce discrimination.

Question 4

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 5

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

Accepted Answer

A) True 
 B)False

Question 6

Park rangers at Yellowstone National Park are known to have low wages. This is probably because

Accepted Answer

A)  park rangers are required to be college graduates. 
B)  park rangers don't need much money to live. 
C)  park ranger jobs are perceived to be dangerous. 
D)  park ranger jobs are perceived to be "fun." 
A)  park rangers are required to be college graduates. 
B)  park rangers don't need much money to live. 
C)  park ranger jobs are perceived to be dangerous. 
D)  park ranger jobs are perceived to be "fun."

Question 7

The organized withdrawal of labor from a firm by a union is called

Accepted Answer

A)  a strike. 
B)  a bargain. 
C)  a monopoly. 
D)  a tournament. 
A)  a strike. 
B)  a bargain. 
C)  a monopoly. 
D)  a tournament.

Question 8

Which of the following might explain the beauty premium found by labor economists Hamermesh and Biddle?

Accepted Answer

A)  Good looks are an innate ability for some jobs, which results in higher productivity and higher wages. 
B)  Good looks may be an indirect measure of other types of ability such as attention to detail. 
C)  If better-looking people earn more than average-looking people, employers may be discriminating based on personal appearance. 
D)  All of the above could explain the beauty premium. 
A)  Good looks are an innate ability for some jobs, which results in higher productivity and higher wages. 
B)  Good looks may be an indirect measure of other types of ability such as attention to detail. 
C)  If better-looking people earn more than average-looking people, employers may be discriminating based on personal appearance. 
D)  All of the above could explain the beauty premium.

Question 9

Evidence of differences in average wages of women compared to men

Accepted Answer

A)  clearly illustrates differences in productivity between genders. 
B)  provides conclusive evidence of discrimination on the basis of gender. 
C)  is seldom used to provide evidence of discriminatory bias. 
D)  does not provide conclusive evidence of discrimination. 
A)  clearly illustrates differences in productivity between genders. 
B)  provides conclusive evidence of discrimination on the basis of gender. 
C)  is seldom used to provide evidence of discriminatory bias. 
D)  does not provide conclusive evidence of discrimination.

Question 10

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

Question 11

Is measuring the effect of discrimination on wages relatively easy or relatively difficult? Explain?

Accepted Answer

It can be relatively difficult

Question 12

List the productivity factors that may explain the differences in pay between men and women in similar occupations. Do any of these factors arise as a result of cultural or social traditions? If so, describe how changes in social relationships will affect the pay gap over time.

Accepted Answer

Job experience, education, lif

Question 13

Which of these instances would constitute labor-market discrimination? Courtney and Nicole are identical in all of their labor-market characteristics except that Courtney earns a higher salary than Nicole because

Accepted Answer

A)  Courtney is beautiful and Nicole is not. 
B)  Courtney is 40 years old and Nicole is 60 years old. 
C)  Courtney works the night shift and Nicole works the day shift. 
D)  Courtney attended on the job-training seminars which allows her to do tasks Nicole is not qualified for. 
A)  Courtney is beautiful and Nicole is not. 
B)  Courtney is 40 years old and Nicole is 60 years old. 
C)  Courtney works the night shift and Nicole works the day shift. 
D)  Courtney attended on the job-training seminars which allows her to do tasks Nicole is not qualified for.

Question 14

Marcia is a white 23-year-old female, and Joan is a black 23-year-old female. Both Marcia and Joan were economics majors, and they graduated from the same college in the same year with the same GPA. Marcia and Joan both got identical jobs at a brokerage firm after graduating from college. They both work equally hard. Marcia earns $38,000 a year, and Joan earns $30,000 a year. Select the best explanation for this wage difference.

Accepted Answer

A)  Marcia has less human capital than Joan. 
B)  Marcia receives a compensating wage differential that Joan does not. 
C)  Joan has been discriminated against because she is black. 
D)  Marcia has been discriminated against because she is white. 
A)  Marcia has less human capital than Joan. 
B)  Marcia receives a compensating wage differential that Joan does not. 
C)  Joan has been discriminated against because she is black. 
D)  Marcia has been discriminated against because she is white.

Question 15

Which theory explains the fact that some firms may choose to pay their employees more then they would earn as determined by equilibrium in the labor market?

Accepted Answer

A)  the theory of efficiency wages 
B)  the marginal-productivity theory 
C)  human-capital theory 
D)  signaling theory 
A)  the theory of efficiency wages 
B)  the marginal-productivity theory 
C)  human-capital theory 
D)  signaling theory

Question 16

Which of the following explains why soccer players make millions of dollars in Europe but do not in the United States?

Accepted Answer

A)  discriminatory rules established by the government 
B)  compensating wage differentials for living in Europe 
C)  discriminatory preferences on the part of US sports fans for other sports 
D)  efficiency wages paid to European players to enhance on-field performance 
A)  discriminatory rules established by the government 
B)  compensating wage differentials for living in Europe 
C)  discriminatory preferences on the part of US sports fans for other sports 
D)  efficiency wages paid to European players to enhance on-field performance

Question 17

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 18

In the experiment conducted by economists Muriel Niederle and Lise Vesterlund

Accepted Answer

A)  men were better at adding than women. 
B)  women chose the tournament payoff scheme more than men. 
C)  men thought they won the four-player tournament part of the experiment more often than women thought they won the four-player tournament. 
D)  the researchers demonstrated that women face significant wage discrimination in stock brokerages. 
A)  men were better at adding than women. 
B)  women chose the tournament payoff scheme more than men. 
C)  men thought they won the four-player tournament part of the experiment more often than women thought they won the four-player tournament. 
D)  the researchers demonstrated that women face significant wage discrimination in stock brokerages.

Question 19

According to the human-capital view, education

Accepted Answer

A)  has no effect on lifetime earnings. 
B)  alters work ethic. 
C)  enhances productivity. 
D)  is an indicator of natural ability. 
A)  has no effect on lifetime earnings. 
B)  alters work ethic. 
C)  enhances productivity. 
D)  is an indicator of natural ability.

Question 20

Effective minimum-wage laws will most likely

Accepted Answer

A)  increase demand for labor. 
B)  create a surplus of labor. 
C)  increase incomes for all unskilled workers. 
D)  decrease incomes for all unskilled workers. 
A)  increase demand for labor. 
B)  create a surplus of labor. 
C)  increase incomes for all unskilled workers. 
D)  decrease incomes for all unskilled workers.

Exam 19: Earnings and Discrimination

The market wage could be higher than the equilibrium wage if a worker

The signaling theory of education suggests that when people earn a college degree they do not become more productive, but they do signal their high ability to prospective employers.

The case study of segregated street cars in southern cities illustrates which of the following?

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

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

Park rangers at Yellowstone National Park are known to have low wages. This is probably because

The organized withdrawal of labor from a firm by a union is called

Which of the following might explain the beauty premium found by labor economists Hamermesh and Biddle?

Evidence of differences in average wages of women compared to men

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

Is measuring the effect of discrimination on wages relatively easy or relatively difficult? Explain?

List the productivity factors that may explain the differences in pay between men and women in similar occupations. Do any of these factors arise as a result of cultural or social traditions? If so, describe how changes in social relationships will affect the pay gap over time.

Which of these instances would constitute labor-market discrimination? Courtney and Nicole are identical in all of their labor-market characteristics except that Courtney earns a higher salary than Nicole because

Which theory explains the fact that some firms may choose to pay their employees more then they would earn as determined by equilibrium in the labor market?

Which of the following explains why soccer players make millions of dollars in Europe but do not in the United States?

A natural correction to employer discrimination in market economies is the

In the experiment conducted by economists Muriel Niederle and Lise Vesterlund

According to the human-capital view, education

Effective minimum-wage laws will most likely

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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