Question 1

A study conducted by Steven Levitt and Roland Fryer on labor market discrimination suggests that black-sounding names get:

Accepted Answer

A)  fewer interviews and in the long run they end up with jobs of less quality. 
B)  fewer interviews but in the long run they end up with jobs of equal quality. 
C)  more interviews and in the long run they end up with jobs of better quality. 
D)  more interviews but in the long run they end up with jobs of less quality. 
A)  fewer interviews and in the long run they end up with jobs of less quality. 
B)  fewer interviews but in the long run they end up with jobs of equal quality. 
C)  more interviews and in the long run they end up with jobs of better quality. 
D)  more interviews but in the long run they end up with jobs of less quality. B

Question 2

The two major types of discrimination are:

Accepted Answer

A)  statistical discrimination and preference-based discrimination 
B)  racial discrimination and gender discrimination. 
C)  age discrimination and disability discrimination. 
D)  employment discrimination and compensation discrimination. 
A)  statistical discrimination and preference-based discrimination 
B)  racial discrimination and gender discrimination. 
C)  age discrimination and disability discrimination. 
D)  employment discrimination and compensation discrimination. A

Question 3

Explain why tractor-trailer truck drivers earn almost twice that of limousine drivers. What would happen if the government mandated that limousine drivers earn the same hourly wage as truck drivers?

Accepted Answer

At first, we might expect that both occupations would have roughly equal wages, since they both require similar skills and neither requires a college degree. However, driving a tractor-trailer is one of the most dangerous occupations. Furthermore, driving a tractor-trailer generally requires spending many days away from home and is likely more unpleasant than driving a limousine. These features combine to decrease the supply of truck drivers, pushing up their wages and creating a compensating wage differential.
If the government set the wages of limousine drivers equal to truck drivers, many truck drivers would want to become limousine drivers. Trucking companies would find it difficult to hire truck drivers; there would be a shortage of drivers. Because of the higher wages, limousine companies would reduce the number of limousine drivers hired, which coupled with all the truck drivers wanting to work as limousine drivers would create a surplus of limousine drivers.

Question 4

Which of the following does not represent a human capital labor market issues?

Accepted Answer

A)  skills gained while working on the job 
B)  a college education 
C)  a government retraining program 
D)  all jobs have the same danger level 
A)  skills gained while working on the job 
B)  a college education 
C)  a government retraining program 
D)  all jobs have the same danger level

Question 5

A single person's supply curve for labor slopes down when:

Accepted Answer

A)  the person starts taking part of their income as leisure. 
B)  labor market issues increases beyond physical capital. 
C)  the marginal product of labor exceeds the wage. 
D)  the demand curve for labor starts sloping up. 
A)  the person starts taking part of their income as leisure. 
B)  labor market issues increases beyond physical capital. 
C)  the marginal product of labor exceeds the wage. 
D)  the demand curve for labor starts sloping up.

Question 6

Which of the following is an example of discrimination?

Accepted Answer

A)  People assume Louise is a slow driver because she only drives on back roads.. 
B)  The basketball coach recruits only the tall, African-American children to be on his basketball team because he assumes they will be the best players. 
C)  The boss assumes that since John wears golf shirts from professional tournaments, John is a good golfer. 
D)  David is fired from his job because he is Jewish. 
A)  People assume Louise is a slow driver because she only drives on back roads.. 
B)  The basketball coach recruits only the tall, African-American children to be on his basketball team because he assumes they will be the best players. 
C)  The boss assumes that since John wears golf shirts from professional tournaments, John is a good golfer. 
D)  David is fired from his job because he is Jewish.

Question 7

Women earn less than men because:

Accepted Answer

A)  we live in a patriarchal society. 
B)  they often interrupt their careers to stay home and raise children and thus have less job experience than men. 
C)  fewer and fewer women are graduating from college. 
D)  women tend to work in more dangerous jobs with inflexible work schedules. 
A)  we live in a patriarchal society. 
B)  they often interrupt their careers to stay home and raise children and thus have less job experience than men. 
C)  fewer and fewer women are graduating from college. 
D)  women tend to work in more dangerous jobs with inflexible work schedules.

Question 8

A compensating differential is mainly a cause of a difference in wages because:

Accepted Answer

A)  of differences in working conditions. 
B)  of differences in human capital. 
C)  of differences in productivity. 
D)  all workers should be paid the same wage rate. 
A)  of differences in working conditions. 
B)  of differences in human capital. 
C)  of differences in productivity. 
D)  all workers should be paid the same wage rate.

Question 9

The return to human capital can be easily observed in the productivity of workers.

Accepted Answer

A) True 
 B)False

Question 10

Discrimination is:

Accepted Answer

A)  using information about group averages to make conclusions about individuals. 
B)  the illegal practice of judging someone because of their characteristics. 
C)  a tool that economists use to determine the significance of statistical regressions. 
D)  always malicious. 
A)  using information about group averages to make conclusions about individuals. 
B)  the illegal practice of judging someone because of their characteristics. 
C)  a tool that economists use to determine the significance of statistical regressions. 
D)  always malicious.

Question 11

Table: Excellence Publishing
 
Refer to the table. Each edited book sells for $70. How many people will the company hire each year as editing staff if the salary is $47,000 per staff member?

Accepted Answer

Eight workers. The marginal pr

Question 12

How might unions benefit workers?

Accepted Answer

A)  by limiting the number of people who can be hired by firms 
B)  by striking and stalling production 
C)  by demanding improved labor/management relations and improving worker safety and work conditions 
D)  by demanding higher wages only 
A)  by limiting the number of people who can be hired by firms 
B)  by striking and stalling production 
C)  by demanding improved labor/management relations and improving worker safety and work conditions 
D)  by demanding higher wages only

Question 13

A firm will hire a worker as long as:

Accepted Answer

A)  the marginal product of labor is greater than or equal to the wage earned by the worker. 
B)  the wage earned is greater than the marginal product of labor. 
C)  the worker is not unionized. 
D)  the worker does not demand OSHA safety regulations. 
A)  the marginal product of labor is greater than or equal to the wage earned by the worker. 
B)  the wage earned is greater than the marginal product of labor. 
C)  the worker is not unionized. 
D)  the worker does not demand OSHA safety regulations.

Question 14

The signaling theory of education suggests that:

Accepted Answer

A)  educated people are paid more because they have more skills. 
B)  educated people are paid more not because they have more skills, but because their degree proves they are intelligent and conscientious. 
C)  only those who get useful degrees will earn more money. 
D)  the highest payoff goes to those who learn Morse code. 
A)  educated people are paid more because they have more skills. 
B)  educated people are paid more not because they have more skills, but because their degree proves they are intelligent and conscientious. 
C)  only those who get useful degrees will earn more money. 
D)  the highest payoff goes to those who learn Morse code.

Question 15

A compensating differential is:

Accepted Answer

A)  a wage premium for more talented workers. 
B)  the difference in wages between India and the United States. 
C)  a difference in the marginal product of labor. 
D)  a difference in wages that offsets differences in working conditions. 
A)  a wage premium for more talented workers. 
B)  the difference in wages between India and the United States. 
C)  a difference in the marginal product of labor. 
D)  a difference in wages that offsets differences in working conditions.

Question 16

Table: Mr. B's Restaurant
 
The second column in this table shows the firm's ______. At a wage of $28 an hour, Mr. B should hire ______ cooks.

Accepted Answer

A)  marginal disutility of work; 4 
B)  marginal product of labor; 3 
C)  marginal disutility of work; 2 
D)  marginal cost of labor; 3 
A)  marginal disutility of work; 4 
B)  marginal product of labor; 3 
C)  marginal disutility of work; 2 
D)  marginal cost of labor; 3

Question 17

The market wage for workers is:
I. equal to the marginal product of labor.
II. determined by the intersection of the firm's demand curve for labor and the individual's supply curve for labor.
III. always greater than the minimum wage.

Accepted Answer

A)  I only 
B)  I and II only 
C)  II and III only 
D)  I, II, and III 
A)  I only 
B)  I and II only 
C)  II and III only 
D)  I, II, and III

Question 18

The increase in a firm's revenues created by hiring an additional worker is called:

Accepted Answer

A)  marginal revenue. 
B)  marginal revenue of labor. 
C)  marginal product. 
D)  marginal product of labor. 
A)  marginal revenue. 
B)  marginal revenue of labor. 
C)  marginal product. 
D)  marginal product of labor.

Question 19

Workers earn higher wages:
I. when the demand for labor rises in an industry.
II. the greater the amount of human capital market issues they possess.
III. the more dangerous the job they perform.

Accepted Answer

A)  II only 
B)  III only 
C)  II and III only 
D)  I, II, and III 
A)  II only 
B)  III only 
C)  II and III only 
D)  I, II, and III

Question 20

Which of the following statements is TRUE?

Accepted Answer

A)  The market supply of labor is always upward sloping, but an individual's labor supply may not be upward sloping throughout its entire range. 
B)  An individual's supply of labor is always upward sloping, but the market supply of labor may not be upward sloping throughout its entire range. 
C)  Both the market supply of labor and the individual's labor supply will both be upward sloping. 
D)  Both the market supply of labor and the individual's labor supply may not be upward sloping across their entire range. 
A)  The market supply of labor is always upward sloping, but an individual's labor supply may not be upward sloping throughout its entire range. 
B)  An individual's supply of labor is always upward sloping, but the market supply of labor may not be upward sloping throughout its entire range. 
C)  Both the market supply of labor and the individual's labor supply will both be upward sloping. 
D)  Both the market supply of labor and the individual's labor supply may not be upward sloping across their entire range.

Exam 18: Labor Markets

A study conducted by Steven Levitt and Roland Fryer on labor market discrimination suggests that black-sounding names get:

The two major types of discrimination are:

Explain why tractor-trailer truck drivers earn almost twice that of limousine drivers. What would happen if the government mandated that limousine drivers earn the same hourly wage as truck drivers?

Which of the following does not represent a human capital labor market issues?

A single person's supply curve for labor slopes down when:

Which of the following is an example of discrimination?

Women earn less than men because:

A compensating differential is mainly a cause of a difference in wages because:

The return to human capital can be easily observed in the productivity of workers.

Discrimination is:

Table: Excellence Publishing Refer to the table. Each edited book sells for $70. How many people will the company hire each year as editing staff if the salary is $47,000 per staff member?

How might unions benefit workers?

A firm will hire a worker as long as:

The signaling theory of education suggests that:

A compensating differential is:

Table: Mr. B's Restaurant The second column in this table shows the firm's ______. At a wage of $28 an hour, Mr. B should hire ______ cooks.

The market wage for workers is: I. equal to the marginal product of labor. II. determined by the intersection of the firm's demand curve for labor and the individual's supply curve for labor. III. always greater than the minimum wage.

The increase in a firm's revenues created by hiring an additional worker is called:

Workers earn higher wages: I. when the demand for labor rises in an industry. II. the greater the amount of human capital market issues they possess. III. the more dangerous the job they perform.

Which of the following statements is TRUE?

The Big Ideas

The Power of Trade and Comparative

Supply and Demand

Equilibrium

Elasticity and Its Applications

Taxes and Subsidies

The Price System

Price Ceilings and Floors

International Trade

Externalities- When the Price Is Not Right

Costs and Profit Maximization Under Competition

Competition and the Invisible Hand

Monopoly

Price Discrimination

Oligopoly and Game Theory

Competing for Monopoly

Monopolistic Competition and Advertising

Public Goods and the Tragedy of the Commons

Political Economy and Public Choice

Economics, Ethics, and Public Policy

Managing Incentives

Stock Markets and Personal Finance

Price Discrimination

Consumer Choice

Filters

Table: Mr. B's Restaurant The second column in this table shows the firm's . At a wage of $28 an hour, Mr. B should hire cooks.