Question 1

Why do major-league baseball players get paid more than minor-league players?

Accepted Answer

A)  Major-league players are better athletes. 
B)  The higher wage reflects a compensating differential. 
C)  Playing in the major leagues in more pleasant then playing in the minor leagues. 
D)  The higher wage is often due to educational discrepancies. 
A)  Major-league players are better athletes. 
B)  The higher wage reflects a compensating differential. 
C)  Playing in the major leagues in more pleasant then playing in the minor leagues. 
D)  The higher wage is often due to educational discrepancies.

Question 2

Tom, the manager and owner of a small company, believes in the signaling theory of education, not the human capital theory. As such, we would expect Tom not to offer which of the following company benefits?

Accepted Answer

A)  employer-matching 401k retirement plan contributions 
B)  tuition reimbursement for workers who take college classes 
C)  on-site day care 
D)  health insurance 
A)  employer-matching 401k retirement plan contributions 
B)  tuition reimbursement for workers who take college classes 
C)  on-site day care 
D)  health insurance

Question 3

Construction work is much riskier than working as a server at a restaurant. As a result, we'd expect a difference in wages between the two jobs. The difference is known as

Accepted Answer

A)  an efficiency wage. 
B)  a compensating differential. 
C)  a wage adjustment. 
D)  a minimum wage. 
A)  an efficiency wage. 
B)  a compensating differential. 
C)  a wage adjustment. 
D)  a minimum wage.

Question 4

An effective minimum wage law will increase the quantity of labor demanded.

Accepted Answer

A) True 
 B)False

Question 5

Sally and Harry both work at the local factory producing cars. Sally earns $22 per hour working the day shift, and Harry earns $25 per hour working the night shift. Sally and Harry do the same job, have the same experience, and have the same level of education. This means that the

Accepted Answer

A)  higher-paying job has a compensating wage differential of $3 per hour. 
B)  higher-paying job has a compensating wage differential of $25 per hour. 
C)  higher-paying job is intrinsically more attractive than the lower-paying joc. 
D)  factory is discriminating against Sally because she is a woman. 
A)  higher-paying job has a compensating wage differential of $3 per hour. 
B)  higher-paying job has a compensating wage differential of $25 per hour. 
C)  higher-paying job is intrinsically more attractive than the lower-paying joc. 
D)  factory is discriminating against Sally because she is a woman.

Question 6

Studies show that white women earn approximately 25% less than white men. From this data alone, one should not conclude that white women are victims of discrimination. Name two other factors that could explain the difference in wages.

Accepted Answer

Differences in human

Question 7

Figure 19-5  
-Refer to Figure 19-5. Suppose this market begins with demand for labor, D1, and supply of labor, S1, but the labor supply curve shifts to S2. Which of the following statements best describes the results?

Accepted Answer

A)  Fewer workers are employed, but those who are employed earn a higher wage. 
B)  More workers are employed but they earn a lower wage. 
C)  More workers are employed and they earn a higher wage. 
D)  The same number of workers are employed and they earn a higher wage. 
A)  Fewer workers are employed, but those who are employed earn a higher wage. 
B)  More workers are employed but they earn a lower wage. 
C)  More workers are employed and they earn a higher wage. 
D)  The same number of workers are employed and they earn a higher wage.

Question 8

A signaling theory of education suggests that

Accepted Answer

A)  people who attend college are more likely to capture a "beauty premium." 
B)  education is a signal of social status. 
C)  education does not necessarily increase productivity. 
D)  education will sever the link between innate ability and compensation. 
A)  people who attend college are more likely to capture a "beauty premium." 
B)  education is a signal of social status. 
C)  education does not necessarily increase productivity. 
D)  education will sever the link between innate ability and compensation.

Question 9

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. Suppose that consumers prefer to have men work on their auto repairs and are willing to pay higher prices to accommodate these preferences. What will happen to the wage differential between men and women?

Accepted Answer

The answer of Scenario 19-6
Suppose that in the competitive market...

Question 10

The statement that "night shift workers make a higher wage than day shift workers" is likely to reflect the fact that

Accepted Answer

A)  most people's preference is to work the day shift. 
B)  some people prefer to work a night shift for nonmonetary reasons. 
C)  night shift jobs are generally more technically difficult. 
D)  more women than men work the night shift. 
A)  most people's preference is to work the day shift. 
B)  some people prefer to work a night shift for nonmonetary reasons. 
C)  night shift jobs are generally more technically difficult. 
D)  more women than men work the night shift.

Question 11

Firms that operate in competitive product markets and choose to practice discrimination in hiring workers

Accepted Answer

A)  will survive if they increase production and garner a larger market share. 
B)  will eventually earn zero economic profits. 
C)  will survive as long as they are willing to have a smaller market share. 
D)  are likely to eventually go out of business. 
A)  will survive if they increase production and garner a larger market share. 
B)  will eventually earn zero economic profits. 
C)  will survive as long as they are willing to have a smaller market share. 
D)  are likely to eventually go out of business.

Question 12

Artie and Angelina attended the same university, graduated with the same degree and grade point average, and are equally productive in their identical new jobs. Still, Angelina's salary is 10% lower than Artie's salary. One can conclude that Angelina likely suffers from

Accepted Answer

The answer of Artie and Angelina attended the same university,...

Question 13

Nurses who work in hospitals often are required to work on weekends, whereas nurses who work in doctors' offices generally only work Monday through Friday. Hospital nurses who must work on weekends are usually paid more than nurses working in doctors' offices for the same work even if they have the same skills and education. This difference in pay is attributed to

Accepted Answer

A)  an efficiency wage. 
B)  compensating differential. 
C)  differences in the marginal product of labor. 
D)  differences in human capital. 
A)  an efficiency wage. 
B)  compensating differential. 
C)  differences in the marginal product of labor. 
D)  differences in human capital.

Question 14

Scenario 19-4
Assume that the labor market for barbers is competitive and that it is differentiated into two groups: barbers who are bald (or going bald) and those who have a full head of hair. Assume that the barbers in this market have identical hair-cutting ability, regardless of whether they are bald or not. Currently the equilibrium wage in the bald barber market is lower than that in the nonbald market. Further assume that the market for haircuts is competitive.
-Refer to Scenario 19-4. If some consumers in the market for haircuts have a strong preference for having their hair cut by a barber who is not going bald, then

Accepted Answer

A)  the difference in wages will eventually disappear since a haircut is a homogeneous good. 
B)  barbershops that hire barbers with hair will be able to charge a higher price for a haircut to those consumers who have a strong preference for barbers with hair. 
C)  barbershops that hire barbers with hair will always be much more profitable. 
D)  barbershops that hire bald barbers will always be much more profitable. 
A)  the difference in wages will eventually disappear since a haircut is a homogeneous good. 
B)  barbershops that hire barbers with hair will be able to charge a higher price for a haircut to those consumers who have a strong preference for barbers with hair. 
C)  barbershops that hire barbers with hair will always be much more profitable. 
D)  barbershops that hire bald barbers will always be much more profitable.

Question 15

Factory workers who work the day shift earn less per hour than similarly-skilled factory workers who work the night shift. The difference in pay is attributed to

Accepted Answer

A)  the marginal product of labor. 
B)  the marginal product of capital. 
C)  diminishing marginal returns. 
D)  a compensating differential. 
A)  the marginal product of labor. 
B)  the marginal product of capital. 
C)  diminishing marginal returns. 
D)  a compensating differential.

Question 16

Which of the following is least likely to be the reason women are underrepresented in the economics profession?

Accepted Answer

A)  labor market discrimination 
B)  the choice of women to select other occupations 
C)  cultural bias in primary and secondary education 
D)  the inability of women to solve problems in economics 
A)  labor market discrimination 
B)  the choice of women to select other occupations 
C)  cultural bias in primary and secondary education 
D)  the inability of women to solve problems in economics

Question 17

On average professors of finance earn more than professors of economics. Other things the same, what does this imply about the supply of each type of professor?

Accepted Answer

This implies the supply of pro

Question 18

Which of the following is not correct?

Accepted Answer

A)  Some economists believe that business owners who emphasize profit maximization will hire the most productive workers regardless of the personal characteristics of the worker; hence, these firms will drive discriminating firms out of business. 
B)  Two economists found that employers in Boston and Chicago were about 50 percent more likely to interview job applicants named Emily and Greg than those named Lakisha and Jamal. 
C)  Two economists found that women were less likely to participate in an experiment where they were paid based on math skills but more likely to participate when they were paid based on reading skills; men were more likely to participate when they were paid based on math skills and less likely to participate when they were paid based on reading skills. 
D)  Economists found that the prices of older baseball cards were about 10 percent lower when the player was black rather than white. 
A)  Some economists believe that business owners who emphasize profit maximization will hire the most productive workers regardless of the personal characteristics of the worker; hence, these firms will drive discriminating firms out of business. 
B)  Two economists found that employers in Boston and Chicago were about 50 percent more likely to interview job applicants named Emily and Greg than those named Lakisha and Jamal. 
C)  Two economists found that women were less likely to participate in an experiment where they were paid based on math skills but more likely to participate when they were paid based on reading skills; men were more likely to participate when they were paid based on math skills and less likely to participate when they were paid based on reading skills. 
D)  Economists found that the prices of older baseball cards were about 10 percent lower when the player was black rather than white.

Question 19

Jill is the best eye surgeon in town, and she earns $350,000 a year. Susan is an average eye surgeon in town, and she earns $100,000 a year. Jill's skills as a surgeon

Accepted Answer

A)  are valued more by the market relative to Susan's and that explains why her income is higher than Susan's. 
B)  are valued less by the market relative to Susan's and that explains why her income is higher than Susan's. 
C)  are valued less by the market relative to Susan's and that explains why her income is lower than Susan's. 
D)  are more expensive because she receives a compensating differential. 
A)  are valued more by the market relative to Susan's and that explains why her income is higher than Susan's. 
B)  are valued less by the market relative to Susan's and that explains why her income is higher than Susan's. 
C)  are valued less by the market relative to Susan's and that explains why her income is lower than Susan's. 
D)  are more expensive because she receives a compensating differential.

Question 20

Evidence suggests that business owners are generally

Accepted Answer

A)  interested in profits only when discrimination is illegal. 
B)  more interested in discrimination than in making a profit. 
C)  unable to determine the link between discrimination and profitability. 
D)  more interested in making a profit than in discriminating against a particular group. 
A)  interested in profits only when discrimination is illegal. 
B)  more interested in discrimination than in making a profit. 
C)  unable to determine the link between discrimination and profitability. 
D)  more interested in making a profit than in discriminating against a particular group.

Why do major-league baseball players get paid more than minor-league players?

Tom, the manager and owner of a small company, believes in the signaling theory of education, not the human capital theory. As such, we would expect Tom not to offer which of the following company benefits?

Construction work is much riskier than working as a server at a restaurant. As a result, we'd expect a difference in wages between the two jobs. The difference is known as

An effective minimum wage law will increase the quantity of labor demanded.

Sally and Harry both work at the local factory producing cars. Sally earns $22 per hour working the day shift, and Harry earns $25 per hour working the night shift. Sally and Harry do the same job, have the same experience, and have the same level of education. This means that the

Studies show that white women earn approximately 25% less than white men. From this data alone, one should not conclude that white women are victims of discrimination. Name two other factors that could explain the difference in wages.

Figure 19-5 -Refer to Figure 19-5. Suppose this market begins with demand for labor, D1, and supply of labor, S1, but the labor supply curve shifts to S2. Which of the following statements best describes the results?

A signaling theory of education suggests that

The statement that "night shift workers make a higher wage than day shift workers" is likely to reflect the fact that

Firms that operate in competitive product markets and choose to practice discrimination in hiring workers

Artie and Angelina attended the same university, graduated with the same degree and grade point average, and are equally productive in their identical new jobs. Still, Angelina's salary is 10% lower than Artie's salary. One can conclude that Angelina likely suffers from

Factory workers who work the day shift earn less per hour than similarly-skilled factory workers who work the night shift. The difference in pay is attributed to

Which of the following is least likely to be the reason women are underrepresented in the economics profession?

On average professors of finance earn more than professors of economics. Other things the same, what does this imply about the supply of each type of professor?

Which of the following is not correct?

Jill is the best eye surgeon in town, and she earns $350,000 a year. Susan is an average eye surgeon in town, and she earns $100,000 a year. Jill's skills as a surgeon

Evidence suggests that business owners are generally

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

Why do major-league baseball players get paid more than minor-league players?

Tom, the manager and owner of a small company, believes in the signaling theory of education, not the human capital theory. As such, we would expect Tom not to offer which of the following company benefits?

Construction work is much riskier than working as a server at a restaurant. As a result, we'd expect a difference in wages between the two jobs. The difference is known as

An effective minimum wage law will increase the quantity of labor demanded.

Sally and Harry both work at the local factory producing cars. Sally earns $22 per hour working the day shift, and Harry earns $25 per hour working the night shift. Sally and Harry do the same job, have the same experience, and have the same level of education. This means that the

Studies show that white women earn approximately 25% less than white men. From this data alone, one should not conclude that white women are victims of discrimination. Name two other factors that could explain the difference in wages.

Figure 19-5 -Refer to Figure 19-5. Suppose this market begins with demand for labor, D1, and supply of labor, S1, but the labor supply curve shifts to S2. Which of the following statements best describes the results?

A signaling theory of education suggests that

The statement that "night shift workers make a higher wage than day shift workers" is likely to reflect the fact that

Firms that operate in competitive product markets and choose to practice discrimination in hiring workers

Artie and Angelina attended the same university, graduated with the same degree and grade point average, and are equally productive in their identical new jobs. Still, Angelina's salary is 10% lower than Artie's salary. One can conclude that Angelina likely suffers from

Factory workers who work the day shift earn less per hour than similarly-skilled factory workers who work the night shift. The difference in pay is attributed to

Which of the following is least likely to be the reason women are underrepresented in the economics profession?

On average professors of finance earn more than professors of economics. Other things the same, what does this imply about the supply of each type of professor?

Which of the following is not correct?

Jill is the best eye surgeon in town, and she earns $350,000 a year. Susan is an average eye surgeon in town, and she earns $100,000 a year. Jill's skills as a surgeon

Evidence suggests that business owners are generally

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