Question 1

Which group of workers tends to have the highest unemployment rate among high school dropouts?

Accepted Answer

A) Men 
B) Women 
C) Blacks 
D) Hispanics 
E) Whites 
A) Men 
B) Women 
C) Blacks 
D) Hispanics 
E) Whites

Question 2

The slope of the wage-schooling locus provides an estimate of

Accepted Answer

A) the average years of education as a function of age. 
B) the average wage or salary of workers for a given level of schooling. 
C) the economic return to an additional year of schooling. 
D) the economic cost of an additional year of schooling. 
E) the marginal cost of an additional year of schooling. 
A) the average years of education as a function of age. 
B) the average wage or salary of workers for a given level of schooling. 
C) the economic return to an additional year of schooling. 
D) the economic cost of an additional year of schooling. 
E) the marginal cost of an additional year of schooling.

Question 3

Selection bias is a problem when trying to estimate the return to education in a standard human capital model.In this context, what does selection bias refer to?

Accepted Answer

A) Having a non-random data sample. 
B) Workers self-select education levels and jobs based on their abilities and preferences. 
C) Colleges select who they are willing to accept. 
D) The wage-schooling locus does not have a constant slope. 
E) The wage-schooling locus is estimated to have a negative slope. 
A) Having a non-random data sample. 
B) Workers self-select education levels and jobs based on their abilities and preferences. 
C) Colleges select who they are willing to accept. 
D) The wage-schooling locus does not have a constant slope. 
E) The wage-schooling locus is estimated to have a negative slope.

Question 4

Suppose all 18-year-olds are identical in every way except that some have easy access to credit (i.e., they face a low interest rate when borrowing money) while others have a difficult time accessing credit (i.e., they face a high interest rate when borrowing money).Which of the following statements is not true?

Accepted Answer

A) Those who have easy access to credit have a lower rate of discount than those who do not have easy access to credit. 
B) Those who have easy access to credit will be more likely to go to college than those who do not have easy access to credit. 
C) The present value calculation of college will be higher for those who have easy access to credit than for those who do not have easy access to credit. 
D) Some people who have easy access to credit will not go to college. 
E) No one without easy access to credit will go to college. 
A) Those who have easy access to credit have a lower rate of discount than those who do not have easy access to credit. 
B) Those who have easy access to credit will be more likely to go to college than those who do not have easy access to credit. 
C) The present value calculation of college will be higher for those who have easy access to credit than for those who do not have easy access to credit. 
D) Some people who have easy access to credit will not go to college. 
E) No one without easy access to credit will go to college.

Question 5

Approximately what percent of people in the United States typically do not graduate from high school?

Accepted Answer

A) 2% 
B) 5% 
C) 10% 
D) 15% 
E) 20% 
A) 2% 
B) 5% 
C) 10% 
D) 15% 
E) 20%

Question 6

Which statement about human capital is false?

Accepted Answer

A) Human capital gives firms a way to differentiate between workers. 
B) Workers accumulate human capital during formal education and through life experiences. 
C) There is more human capital in the U.S.now than there was 100 years ago. 
D) Human capital has a low rate of return. 
E) Human capital tends to be an important determinant of one's wages. 
A) Human capital gives firms a way to differentiate between workers. 
B) Workers accumulate human capital during formal education and through life experiences. 
C) There is more human capital in the U.S.now than there was 100 years ago. 
D) Human capital has a low rate of return. 
E) Human capital tends to be an important determinant of one's wages.

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.When schooling is not used as a signaling device, how much is the firm willing to pay a worker chosen at random?

Accepted Answer

A) $30,000 
B) $34,000 
C) $38,000 
D) $42,000 
E) $50,000 
A) $30,000 
B) $34,000 
C) $38,000 
D) $42,000 
E) $50,000

Question 8

Suppose Amy has 100 efficiency units of labor; Bill has 50 efficiency units of labor; and Chris has 20 efficiency units of labor.Which of the following is true?

Accepted Answer

A) A firm will always hire Amy over Chris, regardless of wages. 
B) A firm will hire Amy if her wage is at least twice that of Bill's and at least five times that of Chris's. 
C) A firm will hire Amy if her wage is at most double that of Bill's and at most five times that of Chris's. 
D) A firm will never hire Bill. 
E) A firm will never hire Chris. 
A) A firm will always hire Amy over Chris, regardless of wages. 
B) A firm will hire Amy if her wage is at least twice that of Bill's and at least five times that of Chris's. 
C) A firm will hire Amy if her wage is at most double that of Bill's and at most five times that of Chris's. 
D) A firm will never hire Bill. 
E) A firm will never hire Chris.

Question 9

What is the stopping rule for choosing one's years of schooling?

Accepted Answer

A) End one's schooling when the return from more schooling is zero. 
B) End one's schooling when the cost of one more year of schooling is zero. 
C) End one's schooling after college. 
D) End one's schooling when the rate of return to one more year of schooling equals the worker's rate of discount. 
E) End one's schooling when the worker's rate of discount equals zero. 
A) End one's schooling when the return from more schooling is zero. 
B) End one's schooling when the cost of one more year of schooling is zero. 
C) End one's schooling after college. 
D) End one's schooling when the rate of return to one more year of schooling equals the worker's rate of discount. 
E) End one's schooling when the worker's rate of discount equals zero.

Question 10

The social rate of return to schooling

Accepted Answer

A) includes all private benefits to schooling. 
B) includes the signaling benefits to schooling. 
C) includes the increase in national income resulting from education. 
D) does not take into account the costs of education. 
E) are always well defined. 
A) includes all private benefits to schooling. 
B) includes the signaling benefits to schooling. 
C) includes the increase in national income resulting from education. 
D) does not take into account the costs of education. 
E) are always well defined.

Which group of workers tends to have the highest unemployment rate among high school dropouts?

The slope of the wage-schooling locus provides an estimate of

Selection bias is a problem when trying to estimate the return to education in a standard human capital model.In this context, what does selection bias refer to?

Approximately what percent of people in the United States typically do not graduate from high school?

Which statement about human capital is false?

Suppose Amy has 100 efficiency units of labor; Bill has 50 efficiency units of labor; and Chris has 20 efficiency units of labor.Which of the following is true?

What is the stopping rule for choosing one's years of schooling?

The social rate of return to schooling

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

Which group of workers tends to have the highest unemployment rate among high school dropouts?

The slope of the wage-schooling locus provides an estimate of

Selection bias is a problem when trying to estimate the return to education in a standard human capital model.In this context, what does selection bias refer to?

Approximately what percent of people in the United States typically do not graduate from high school?

Which statement about human capital is false?

Suppose Amy has 100 efficiency units of labor; Bill has 50 efficiency units of labor; and Chris has 20 efficiency units of labor.Which of the following is true?

What is the stopping rule for choosing one's years of schooling?

The social rate of return to schooling

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