Question 1

Which one of the following most closely approximates pure specific training?

Accepted Answer

A) Learning tax accounting 
B) Learning a management information system that is unique to your firm 
C) Majoring in management information systems at a major university 
D) Learning a widely-used spreadsheet program that is used at your firm 
A) Learning tax accounting 
B) Learning a management information system that is unique to your firm 
C) Majoring in management information systems at a major university 
D) Learning a widely-used spreadsheet program that is used at your firm B

Question 2

refer to the following diagram,in which MRPS1U1B1uS1U1B0 refers to the marginal revenue product of an untrained worker,while MRPS1U1B1tS1U1B0 refers to this worker's marginal revenue product as a result of a program of on-the-job training.
  
-In the case of general training,the wage rate during the training period will be _____,while the post-training wage will be _____.

Accepted Answer

A) W1; W3 
B) W1; between W2 and W3 
C) W2; between W2 and W3 
D) W2; W2 
A) W1; W3 
B) W1; between W2 and W3 
C) W2; between W2 and W3 
D) W2; W2 A

Question 3

based on the following diagram:
 
-Suppose there is now a 25% likelihood that a person's work career may be interrupted for ten years after schooling has been completed.In the diagram above,this development would:

Accepted Answer

A) have no impact 
B) shrink area 1 and reduce the likelihood of investing in a college education 
C) shrink area 2 and increase the likelihood of investing in a college education 
D) shrink area 3 and reduce the likelihood of investing in a college education 
A) have no impact 
B) shrink area 1 and reduce the likelihood of investing in a college education 
C) shrink area 2 and increase the likelihood of investing in a college education 
D) shrink area 3 and reduce the likelihood of investing in a college education D

Question 4

Which one of the following would indicate a profitable human capital investment?

Accepted Answer

A) The net present value is -$12,000 
B) The interest rate on borrowed funds is 4% and the rate of return is 3% 
C) The interest rate exceeds the net present value 
D) The rate of return exceeds the interest rate on borrowed funds 
A) The net present value is -$12,000 
B) The interest rate on borrowed funds is 4% and the rate of return is 3% 
C) The interest rate exceeds the net present value 
D) The rate of return exceeds the interest rate on borrowed funds

Question 5

From 1980 to the present,the college wage premium:

Accepted Answer

A) rose for women but fell for men 
B) rose for men but fell for women 
C) fell for both women and men 
D) rose for both women and men 
A) rose for women but fell for men 
B) rose for men but fell for women 
C) fell for both women and men 
D) rose for both women and men

Question 6

Available evidence indicates that:

Accepted Answer

A) age-earnings profiles vary with education,but not with age 
B) age-earnings profiles vary with age,but not with education 
C) age-earnings profiles of workers with more education tend to be flatter,but higher,than those with less education 
D) differences in earnings between workers who have more education and those who have less education generally widen with age 
A) age-earnings profiles vary with education,but not with age 
B) age-earnings profiles vary with age,but not with education 
C) age-earnings profiles of workers with more education tend to be flatter,but higher,than those with less education 
D) differences in earnings between workers who have more education and those who have less education generally widen with age

Question 7

If the screening hypothesis is true:

Accepted Answer

A) educational attainment and the level of fringe benefits received will be inversely related 
B) the private rate of return to education will tend to overstate the social rate of return 
C) the private rate of return to education will not accurately reflect the gain to the individual student 
D) the college wage premium is much greater than is hypothesized by human capital theorists 
A) educational attainment and the level of fringe benefits received will be inversely related 
B) the private rate of return to education will tend to overstate the social rate of return 
C) the private rate of return to education will not accurately reflect the gain to the individual student 
D) the college wage premium is much greater than is hypothesized by human capital theorists

Question 8

based on the following diagram:
 
-According to human capital theory,areas 1,2,and 3 represent respectively:

Accepted Answer

A) indirect costs,direct costs,and incremental earnings 
B) direct costs,indirect costs,and incremental earnings 
C) indirect costs,direct costs,and total earnings 
D) direct costs,indirect costs,and total earnings 
A) indirect costs,direct costs,and incremental earnings 
B) direct costs,indirect costs,and incremental earnings 
C) indirect costs,direct costs,and total earnings 
D) direct costs,indirect costs,and total earnings

Question 9

Human capital investment consists of:

Accepted Answer

A) any activity that enhances the quality of labor 
B) expenditures for formal schooling only 
C) expenditures for on-the-job training only 
D) any activity that leads to the substitution of physical capital for labor 
A) any activity that enhances the quality of labor 
B) expenditures for formal schooling only 
C) expenditures for on-the-job training only 
D) any activity that leads to the substitution of physical capital for labor

Question 10

Research by Dale and Krueger shows that,all else equal:

Accepted Answer

A) starting salaries of college graduates are not generally affected by choice of major 
B) starting salaries of college graduates are positively related to the selectivity of the college attended but inversely related to the selectivity of other schools to which the student applied 
C) it does not generally pay to attend a school with higher tuition 
D) it does not generally pay to attend a more selective college 
A) starting salaries of college graduates are not generally affected by choice of major 
B) starting salaries of college graduates are positively related to the selectivity of the college attended but inversely related to the selectivity of other schools to which the student applied 
C) it does not generally pay to attend a school with higher tuition 
D) it does not generally pay to attend a more selective college

Question 11

If education is undertaken as consumption as well as investment:

Accepted Answer

A) researchers will understate the private rate of return on human capital investment 
B) researchers will overstate the social rate of return on human capital investment 
C) the investment costs of education will be understated 
D) the benefits of education will be overstated 
A) researchers will understate the private rate of return on human capital investment 
B) researchers will overstate the social rate of return on human capital investment 
C) the investment costs of education will be understated 
D) the benefits of education will be overstated

Question 12

The total economic cost of formal education typically does not include:

Accepted Answer

A) expenditures for tuition,books,and fees 
B) earnings foregone by choosing not to enter the labor force 
C) expenditures for room and board 
D) transportation expenses to and from college 
A) expenditures for tuition,books,and fees 
B) earnings foregone by choosing not to enter the labor force 
C) expenditures for room and board 
D) transportation expenses to and from college

Question 13

A firm that provides specific training to its workers:

Accepted Answer

A) must reduce the wage during the training period,effectively forcing the worker to pay for the training 
B) may be prevented by the minimum wage from paying a wage above marginal revenue product during the posttraining period 
C) will likely provide more training to those who have less formal education 
D) has a stronger incentive to reduce employee turnover than firms that provide only general training 
A) must reduce the wage during the training period,effectively forcing the worker to pay for the training 
B) may be prevented by the minimum wage from paying a wage above marginal revenue product during the posttraining period 
C) will likely provide more training to those who have less formal education 
D) has a stronger incentive to reduce employee turnover than firms that provide only general training

Question 14

The demand for human capital curves slope downward and to the right because:

Accepted Answer

A) education is a screening device 
B) as the interest rate rises,the net present value of education rises 
C) the benefits of increased education diminish as schooling continues 
D) investment in education is subject to increasing marginal returns 
A) education is a screening device 
B) as the interest rate rises,the net present value of education rises 
C) the benefits of increased education diminish as schooling continues 
D) investment in education is subject to increasing marginal returns

Question 15

Human capital theory predicts that the proportion of people attending college will decrease if:

Accepted Answer

A) the age at which retirement benefits are received is lowered to 59 
B) the age at which retirement benefits are received is raised to 75 
C) there is a relatively large population of new high school graduates 
D) there is an increase in the demand for college educated workers 
A) the age at which retirement benefits are received is lowered to 59 
B) the age at which retirement benefits are received is raised to 75 
C) there is a relatively large population of new high school graduates 
D) there is an increase in the demand for college educated workers

Question 16

The college wage premium:

Accepted Answer

A) rose during the 1980s,but fell in the 1960s and again from 1990 to the present 
B) fell during the 1970s but has risen consistently since then 
C) rose during the 1970s and 1980s,but has fallen consistently since then 
D) has risen consistently since 1960 
A) rose during the 1980s,but fell in the 1960s and again from 1990 to the present 
B) fell during the 1970s but has risen consistently since then 
C) rose during the 1970s and 1980s,but has fallen consistently since then 
D) has risen consistently since 1960

Question 17

General training:

Accepted Answer

A) will be paid for by the employee in the form of a reduced wage 
B) raises the trainee's value only to the firm that is providing the training 
C) helps to make labor a quasi-fixed resource 
D) reduces the worker's value to the firm,because the worker's wage rate would have to rise 
A) will be paid for by the employee in the form of a reduced wage 
B) raises the trainee's value only to the firm that is providing the training 
C) helps to make labor a quasi-fixed resource 
D) reduces the worker's value to the firm,because the worker's wage rate would have to rise

Question 18

Age-earnings data show that:

Accepted Answer

A) differences in earnings by education level disappear for workers age 55 and over 
B) men's earnings increase with educational level but not women's earnings 
C) earnings rise with factors such as family background and personal drive,but not education level 
D) higher educational levels are consistently associated with higher earnings 
A) differences in earnings by education level disappear for workers age 55 and over 
B) men's earnings increase with educational level but not women's earnings 
C) earnings rise with factors such as family background and personal drive,but not education level 
D) higher educational levels are consistently associated with higher earnings

Question 19

All else equal,the social rate of return to education will be lower than the private return if:

Accepted Answer

A) there are external benefits to education 
B) the social return correctly calculates benefits using after-tax values 
C) the social return correctly calculates costs by including education subsidies 
D) more educated workers have lower crime rates and unemployment rates 
A) there are external benefits to education 
B) the social return correctly calculates benefits using after-tax values 
C) the social return correctly calculates costs by including education subsidies 
D) more educated workers have lower crime rates and unemployment rates

Question 20

based on the following diagram:
 
-Which one of the following would increase the likelihood of investing in a college education?

Accepted Answer

A) an increase in area 1 
B) a reduction in area 2 
C) a reduction in the retirement age 
D) a reduction in area 3 and an equal increase in area 2 
A) an increase in area 1 
B) a reduction in area 2 
C) a reduction in the retirement age 
D) a reduction in area 3 and an equal increase in area 2

Which one of the following most closely approximates pure specific training?

based on the following diagram: -Suppose there is now a 25% likelihood that a person's work career may be interrupted for ten years after schooling has been completed.In the diagram above,this development would:

Which one of the following would indicate a profitable human capital investment?

From 1980 to the present,the college wage premium:

Available evidence indicates that:

If the screening hypothesis is true:

based on the following diagram: -According to human capital theory,areas 1,2,and 3 represent respectively:

Human capital investment consists of:

Research by Dale and Krueger shows that,all else equal:

If education is undertaken as consumption as well as investment:

The total economic cost of formal education typically does not include:

A firm that provides specific training to its workers:

The demand for human capital curves slope downward and to the right because:

Human capital theory predicts that the proportion of people attending college will decrease if:

The college wage premium:

General training:

Age-earnings data show that:

All else equal,the social rate of return to education will be lower than the private return if:

based on the following diagram: -Which one of the following would increase the likelihood of investing in a college education?

Labor Economics: Introduction and Overview

The Theory of Individual Labor Supply

Population, Participation Rates, and Hours of Work

The Demand for Labor

Wage Determination and the Allocation of Labor

Alternative Pay Schemes and Labor Efficiency

The Wage Structure

Mobility,Migration,and Efficiency

Labor Unions and Collective Bargaining

The Economic Impact of Unions

Government and the Labor Market: Employment, Expenditures, and Taxation

Government and the Labor Market: Legislation and Regulation

Labor Market Discrimination

Job Search: External and Internal

The Distribution of Personal Earnings

Labor Productivity: Wages,Prices,and Employment

Employment and Unemployment

Filters

Exam 4: Labor Quality: Investing in Human Capital

Which one of the following most closely approximates pure specific training?

based on the following diagram: -Suppose there is now a 25% likelihood that a person's work career may be interrupted for ten years after schooling has been completed.In the diagram above,this development would:

Which one of the following would indicate a profitable human capital investment?

From 1980 to the present,the college wage premium:

Available evidence indicates that:

If the screening hypothesis is true:

based on the following diagram: -According to human capital theory,areas 1,2,and 3 represent respectively:

Human capital investment consists of:

Research by Dale and Krueger shows that,all else equal:

If education is undertaken as consumption as well as investment:

The total economic cost of formal education typically does not include:

A firm that provides specific training to its workers:

The demand for human capital curves slope downward and to the right because:

Human capital theory predicts that the proportion of people attending college will decrease if:

The college wage premium:

General training:

Age-earnings data show that:

All else equal,the social rate of return to education will be lower than the private return if:

based on the following diagram: -Which one of the following would increase the likelihood of investing in a college education?

Labor Economics: Introduction and Overview

The Theory of Individual Labor Supply

Population, Participation Rates, and Hours of Work

The Demand for Labor

Wage Determination and the Allocation of Labor

Alternative Pay Schemes and Labor Efficiency

The Wage Structure

Mobility,Migration,and Efficiency

Labor Unions and Collective Bargaining

The Economic Impact of Unions

Government and the Labor Market: Employment, Expenditures, and Taxation

Government and the Labor Market: Legislation and Regulation

Labor Market Discrimination

Job Search: External and Internal

The Distribution of Personal Earnings

Labor Productivity: Wages,Prices,and Employment

Employment and Unemployment

Filters