Question 1

What is an example of general job training?

Accepted Answer

A) Learning how to use a forklift. 
B) Learning how to weld. 
C) Reading a book on techniques for managing large groups of workers involved on team projects. 
D) Attending an industry convention on "best practices." 
E) All of the above. 
A) Learning how to use a forklift. 
B) Learning how to weld. 
C) Reading a book on techniques for managing large groups of workers involved on team projects. 
D) Attending an industry convention on "best practices." 
E) All of the above. E

Question 2

Which of the following reasons is not a likely explanation as to why college completion rates are greater, on average, for whites than for blacks?

Accepted Answer

A) Tuition costs are lower for whites than blacks. 
B) Whites have access to more financial capital to pay for college than blacks. 
C) Post-college wages are higher for whites than for blacks. 
D) Whites have greater access to higher quality public education at the elementary and secondary level. 
E) Whites are more able to postpone earnings at age 18 than are blacks. 
A) Tuition costs are lower for whites than blacks. 
B) Whites have access to more financial capital to pay for college than blacks. 
C) Post-college wages are higher for whites than for blacks. 
D) Whites have greater access to higher quality public education at the elementary and secondary level. 
E) Whites are more able to postpone earnings at age 18 than are blacks. A

Question 3

The Mincer earnings function is used to estimate

Accepted Answer

A) ability bias. 
B) the signaling effect. 
C) the social return to schooling. 
D) the value of the marginal product of labor. 
E) the age earnings profile. 
A) ability bias. 
B) the signaling effect. 
C) the social return to schooling. 
D) the value of the marginal product of labor. 
E) the age earnings profile. E

Question 4

Why do workers typically pursue their education while young?

Accepted Answer

A) Because there is more time to benefit from the higher wages that are typically associated with more education. 
B) Because all of their friends pursue education while young. 
C) Because living expenses are low for a younger person. 
D) Because parents force their children to attend college immediately after high school. 
E) Because they are more likely to receive a scholarship. 
A) Because there is more time to benefit from the higher wages that are typically associated with more education. 
B) Because all of their friends pursue education while young. 
C) Because living expenses are low for a younger person. 
D) Because parents force their children to attend college immediately after high school. 
E) Because they are more likely to receive a scholarship.

Question 5

People decide how much schooling to receive based on:

Accepted Answer

A) Their discount rate. 
B) The marginal rate of return to schooling. 
C) The present value of expected future earnings. 
D) Their ability to succeed in education programs. 
E) All of the above factors influence how much schooling one receives. 
A) Their discount rate. 
B) The marginal rate of return to schooling. 
C) The present value of expected future earnings. 
D) Their ability to succeed in education programs. 
E) All of the above factors influence how much schooling one receives.

Question 6

What is an example of specific job training?

Accepted Answer

A) Learning word-processing skills. 
B) Learning how to use the firm's payroll system. 
C) Obtaining a GED. 
D) Becoming stronger. 
E) Passing the CPA exam. 
A) Learning word-processing skills. 
B) Learning how to use the firm's payroll system. 
C) Obtaining a GED. 
D) Becoming stronger. 
E) Passing the CPA exam.

Question 7

Suppose 40 percent of all potential workers are highly skilled and contribute $50,000 to the firm each year.The remaining 60 percent of potential workers are less-skilled and contribute only $30,000 to the firm each year.Schooling costs a highly skilled worker y per year, while it costs a less-skilled worker 2y per year.What range of y will support a signaling equilibrium?

Accepted Answer

A) $0 < y < $50,000 
B) $5,000 < y < $10,000 
C) $5,000 < y < $20,000 
D) $10,000 < y < $20,000 
E) $20,000 < y < $50,000 
A) $0 < y < $50,000 
B) $5,000 < y < $10,000 
C) $5,000 < y < $20,000 
D) $10,000 < y < $20,000 
E) $20,000 < y < $50,000

Question 8

Paula is considering going to law school.If she does, she will spend $60,000 on tuition and books to get a college education (during the first time period), $120,000 on tuition and books to get a law degree (during the second time period), and her law degree will earn her $620,000 during the remainder of her work-life (during the third time period).Paula's time preference for money is associated with a per-period interest rate of 20 percent.Approximately what is Paula's present value of obtaining a law degree?

Accepted Answer

A) $100,100 
B) $210,400 
C) $270,500 
D) $440,000 
E) $621,900 
A) $100,100 
B) $210,400 
C) $270,500 
D) $440,000 
E) $621,900

Question 9

What does not enter into the present value calculation of a college degree?

Accepted Answer

A) The cost of college tuition. 
B) The cost of books. 
C) Wages of college graduates. 
D) Lifetime wages of non-college graduates. 
E) The value of one's scholarships. 
A) The cost of college tuition. 
B) The cost of books. 
C) Wages of college graduates. 
D) Lifetime wages of non-college graduates. 
E) The value of one's scholarships.

Question 10

Temporary layoffs are common in the United States especially among workers who are heavily invested with specific training.Why?

Accepted Answer

A) Specific training deteriorates quickly, so a laid-off worker with specific training is not valuable to any firm. 
B) The laid-off worker with specific training is more valuable to the firm that laid her off than she is to any other firm.Thus, it is in the worker's best interest to remain unemployed until recalled to work at her original firm. 
C) Workers without specific training are never hired in the first place. 
D) Workers with specific training know they don't need to work hard when employed. 
E) Unemployment benefits are tied to specific training. 
A) Specific training deteriorates quickly, so a laid-off worker with specific training is not valuable to any firm. 
B) The laid-off worker with specific training is more valuable to the firm that laid her off than she is to any other firm.Thus, it is in the worker's best interest to remain unemployed until recalled to work at her original firm. 
C) Workers without specific training are never hired in the first place. 
D) Workers with specific training know they don't need to work hard when employed. 
E) Unemployment benefits are tied to specific training.

Question 11

In order to use schooling as a signal:

Accepted Answer

A) The signal must be more costly for low-skilled workers than for high-skilled workers. 
B) The cost of purchasing the signal must not be so costly that high-skilled workers don't value obtaining it. 
C) Firms must be able to easily verify each worker's amount of schooling. 
D) Some people must choose to not complete schooling. 
E) All of the above are required for schooling to serve as a signal. 
A) The signal must be more costly for low-skilled workers than for high-skilled workers. 
B) The cost of purchasing the signal must not be so costly that high-skilled workers don't value obtaining it. 
C) Firms must be able to easily verify each worker's amount of schooling. 
D) Some people must choose to not complete schooling. 
E) All of the above are required for schooling to serve as a signal.

Question 12

Why might people choose to go to college?

Accepted Answer

A) Because a college education signals to firms that the worker is highly motivated. 
B) Because a college education increases one's productivity, which will be rewarded in the labor market with higher wages. 
C) Because someone enjoys the process of becoming educated. 
D) Because one cannot find employment. 
E) All of the above. 
A) Because a college education signals to firms that the worker is highly motivated. 
B) Because a college education increases one's productivity, which will be rewarded in the labor market with higher wages. 
C) Because someone enjoys the process of becoming educated. 
D) Because one cannot find employment. 
E) All of the above.

Question 13

What is implied when the wage-schooling profile is drawn as a concave (i.e., increasing at a decreasing rate) function?

Accepted Answer

A) The marginal return to schooling increases as years of schooling increases. 
B) The marginal return to schooling is positive but falling as years of schooling increases. 
C) Average wages fall as years of schooling increases. 
D) The cost of schooling increases, but at a decreasing rate. 
E) The cost of schooling decreases, but at an increasing rate. 
A) The marginal return to schooling increases as years of schooling increases. 
B) The marginal return to schooling is positive but falling as years of schooling increases. 
C) Average wages fall as years of schooling increases. 
D) The cost of schooling increases, but at a decreasing rate. 
E) The cost of schooling decreases, but at an increasing rate.

Question 14

Why is it that a firm will typically not pay for general training?

Accepted Answer

A) General training is free. 
B) General training is too expensive. 
C) The benefits of general training depreciate quickly. 
D) General training usually doesn't increase worker productivity. 
E) The skills gained from the general training are transferable to other firms. 
A) General training is free. 
B) General training is too expensive. 
C) The benefits of general training depreciate quickly. 
D) General training usually doesn't increase worker productivity. 
E) The skills gained from the general training are transferable to other firms.

Question 15

Time out of the labor force reduces current earnings as well as future earnings.This suggests that

Accepted Answer

A) general training does not exist. 
B) on-the-job experience is a form of human capital. 
C) firms will not invest in specific job training. 
D) workers never willingly exit the labor force when young. 
E) productivity is unrelated to job experience. 
A) general training does not exist. 
B) on-the-job experience is a form of human capital. 
C) firms will not invest in specific job training. 
D) workers never willingly exit the labor force when young. 
E) productivity is unrelated to job experience.

Question 16

Human capital refers to

Accepted Answer

A) the amount of financial capital owned by firm owners. 
B) the amount of financial capital owned by workers. 
C) the amount of physical capital a firm owns (per worker it employs). 
D) the unique set of abilities and skills embedded in workers. 
E) the amount of physical capital produced by labor. 
A) the amount of financial capital owned by firm owners. 
B) the amount of financial capital owned by workers. 
C) the amount of physical capital a firm owns (per worker it employs). 
D) the unique set of abilities and skills embedded in workers. 
E) the amount of physical capital produced by labor.

Question 17

Approximately what percent of people in the United States typically receive more education than just a high school degree?

Accepted Answer

A) 15% 
B) 25% 
C) 50% 
D) 65% 
E) 90% 
A) 15% 
B) 25% 
C) 50% 
D) 65% 
E) 90%

Question 18

Present value calculations allow one to determine

Accepted Answer

A) the return to an uncertain asset. 
B) the present-day costs and/or benefits of various options. 
C) the utility value of a particular option. 
D) the social cost of financial calculations. 
E) the real wage. 
A) the return to an uncertain asset. 
B) the present-day costs and/or benefits of various options. 
C) the utility value of a particular option. 
D) the social cost of financial calculations. 
E) the real wage.

Question 19

If ability is positively related to schooling, then estimating the returns to education directly from the wage-schooling profile will likely

Accepted Answer

A) under-estimate the return to schooling. 
B) over-estimate the return to schooling. 
C) under-estimate the average wage. 
D) over-estimate the average wage. 
E) under-estimate the average discount rate. 
A) under-estimate the return to schooling. 
B) over-estimate the return to schooling. 
C) under-estimate the average wage. 
D) over-estimate the average wage. 
E) under-estimate the average discount rate.

Question 20

The wage-schooling locus is

Accepted Answer

A) downward sloping because education is generally productive. 
B) upward sloping because education is generally productive. 
C) backward bending. 
D) horizontal because wages are unrelated to schooling. 
E) vertical because education is a public good. 
A) downward sloping because education is generally productive. 
B) upward sloping because education is generally productive. 
C) backward bending. 
D) horizontal because wages are unrelated to schooling. 
E) vertical because education is a public good.

What is an example of general job training?

Which of the following reasons is not a likely explanation as to why college completion rates are greater, on average, for whites than for blacks?

The Mincer earnings function is used to estimate

Why do workers typically pursue their education while young?

People decide how much schooling to receive based on:

What is an example of specific job training?

What does not enter into the present value calculation of a college degree?

Temporary layoffs are common in the United States especially among workers who are heavily invested with specific training.Why?

In order to use schooling as a signal:

Why might people choose to go to college?

What is implied when the wage-schooling profile is drawn as a concave (i.e., increasing at a decreasing rate) function?

Why is it that a firm will typically not pay for general training?

Time out of the labor force reduces current earnings as well as future earnings.This suggests that

Human capital refers to

Approximately what percent of people in the United States typically receive more education than just a high school degree?

Present value calculations allow one to determine

If ability is positively related to schooling, then estimating the returns to education directly from the wage-schooling profile will likely

The wage-schooling locus is

Introduction to Labor Economics

Labor Supply

Labor Demand

Labor Market Equilibrium

Compensating Wage Differentials

The Wage Structure

Labor Mobility

Labor Market Discrimination

Labor Unions

Incentive Pay

Unemployment

Filters

Exam 6: Human Capital

What is an example of general job training?

Which of the following reasons is not a likely explanation as to why college completion rates are greater, on average, for whites than for blacks?

The Mincer earnings function is used to estimate

Why do workers typically pursue their education while young?

People decide how much schooling to receive based on:

What is an example of specific job training?

What does not enter into the present value calculation of a college degree?

Temporary layoffs are common in the United States especially among workers who are heavily invested with specific training.Why?

In order to use schooling as a signal:

Why might people choose to go to college?

What is implied when the wage-schooling profile is drawn as a concave (i.e., increasing at a decreasing rate) function?

Why is it that a firm will typically not pay for general training?

Time out of the labor force reduces current earnings as well as future earnings.This suggests that

Human capital refers to

Approximately what percent of people in the United States typically receive more education than just a high school degree?

Present value calculations allow one to determine

If ability is positively related to schooling, then estimating the returns to education directly from the wage-schooling profile will likely

The wage-schooling locus is

Introduction to Labor Economics

Labor Supply

Labor Demand

Labor Market Equilibrium

Compensating Wage Differentials

The Wage Structure

Labor Mobility

Labor Market Discrimination

Labor Unions

Incentive Pay

Unemployment

Filters