Question 1

Why might a completely fair and unbiased country club manager still exhibit status discrimination in deciding who can be a member and who cannot?

Accepted Answer

A)  because he or she does not care about customer preferences 
B)  because country clubs can legally discriminate 
C)  because he or she might still secretly be racist 
D)  because of customer-driven preferences 
A)  because he or she does not care about customer preferences 
B)  because country clubs can legally discriminate 
C)  because he or she might still secretly be racist 
D)  because of customer-driven preferences

Question 2

The wage a firm pays and the marginal product of labor tend to very different.

Accepted Answer

A) True 
 B)False

Question 3

In the United States there were 5 occupational fatalities per 100,000 workers in 1992 and 3.8 occupational fatalities per 100,000 workers in 2007. What accounts for this 24% decrease in the occupational fatality rate?

Accepted Answer

A)  The government began regulating workplace safety in 1993. 
B)  OHSA was established in 1995. 
C)  There were more people employed in 1992 than in 2007. 
D)  Economic growth allowed workers to buy more job safety. 
A)  The government began regulating workplace safety in 1993. 
B)  OHSA was established in 1995. 
C)  There were more people employed in 1992 than in 2007. 
D)  Economic growth allowed workers to buy more job safety.

Question 4

Labor unions are often anti-immigration because immigration tends to depress wages by:

Accepted Answer

A)  increasing demand for labor. 
B)  increasing supply of labor. 
C)  decreasing demand for labor. 
D)  decreasing supply of labor. 
A)  increasing demand for labor. 
B)  increasing supply of labor. 
C)  decreasing demand for labor. 
D)  decreasing supply of labor.

Question 5

In many universities, teaching summer classes pays professors a sum of money in addition to their annual salary. Full professors who have been at the university the longest typically get first priority for teaching summer classes, with newer assistant professors at the end of the line. Given this system, who ends up teaching the majority of summer classes at these universities? Explain why. What role do the different professors' labor supply curves play?

Accepted Answer

Even though full professors get first di

Question 6

College graduates are paid more, on average, partly because they are expected to possess more human capital.

Accepted Answer

A) True 
 B)False

Question 7

Statistical discrimination uses group stereotypes to make conclusions about individuals.

Accepted Answer

A) True 
 B)False

Question 8

The marginal product of labor is the increase in a firm's revenues created by hiring an additional laborer.

Accepted Answer

A) True 
 B)False

Question 9

During the 1970s, wage premiums for college graduates:

Accepted Answer

A)  grew. 
B)  fell. 
C)  remained the same. 
D)  cycled. 
A)  grew. 
B)  fell. 
C)  remained the same. 
D)  cycled.

Question 10

We expect jobs that are inherently more dangerous to pay higher wages, which is a compensating differential.

Accepted Answer

A) True 
 B)False

Question 11

When employment discrimination stems from personal prejudices of employers, economic theory suggests that:

Accepted Answer

A)  discriminating employers will be more profitable. 
B)  the wages of employees who are discriminated against will rise. 
C)  it will be costless for employers to discriminate. 
D)  the employers who discriminate will face higher costs. 
A)  discriminating employers will be more profitable. 
B)  the wages of employees who are discriminated against will rise. 
C)  it will be costless for employers to discriminate. 
D)  the employers who discriminate will face higher costs.

Question 12

An individual's labor supply curve might not be purely upward sloping.

Accepted Answer

A) True 
 B)False

Question 13

The productivity of the firm is directly related to the productivity of an individual worker.

Accepted Answer

A) True 
 B)False

Question 14

Explain how market shifts in demand and/or supply can lead to higher wages for workers.

Accepted Answer

If a certain industry has a low supply o

Question 15

A union can lower wages by:

Accepted Answer

A)  raising the supply of labor. 
B)  raising the demand for labor. 
C)  not going on strike very often. 
D)  causing work stoppages, which slow down the entire economy. 
A)  raising the supply of labor. 
B)  raising the demand for labor. 
C)  not going on strike very often. 
D)  causing work stoppages, which slow down the entire economy.

Question 16

If the marginal product of labor is decreasing in labor, then a firm-level labor demand curve is:

Accepted Answer

A)  positively sloped. 
B)  negatively sloped. 
C)  flat. 
D)  varied. 
A)  positively sloped. 
B)  negatively sloped. 
C)  flat. 
D)  varied.

Question 17

Suppose that firms can hire whites for $10 an hour or equally productive blacks for $8 an hour. Which of the following is the most likely hiring practice for most firms?

Accepted Answer

A)  All firms would follow the wage rates paid for respective white and black. 
B)  Firms that want to minimize cost would prefer to hire whites. 
C)  Firms that want to maximize profit would prefer to hire blacks. 
D)  All firms would hire an equal number of white and black workers. 
A)  All firms would follow the wage rates paid for respective white and black. 
B)  Firms that want to minimize cost would prefer to hire whites. 
C)  Firms that want to maximize profit would prefer to hire blacks. 
D)  All firms would hire an equal number of white and black workers.

Question 18

The only reason that low-skilled workers in developing countries earn significantly less than low-skilled workers in developed countries is that there is a much higher supply of low-skilled workers in developing countries which in turn pushes wages lower.

Accepted Answer

A) True 
 B)False

Question 19

Figure: Market for Plumbers   If the market in this figure is in equilibrium, the hourly wage paid to plumbers is ______ and the marginal product of a plumber is ______.

Accepted Answer

A)  $40; $20 
B)  $30; $50 
C)  $40; $40 
D)  $20; $30 
A)  $40; $20 
B)  $30; $50 
C)  $40; $40 
D)  $20; $30

Question 20

Table: Stone Masons
 
A construction company builds stone fireplaces. The market wage for a stonemason is $350 per day. The table depicts the marginal product of labor (MPL) per day for a given number of stonemasons. To maximize profits, this company should hire ______ stonemasons.

Accepted Answer

A)  2 
B)  3 
C)  4 
D)  5 
A)  2 
B)  3 
C)  4 
D)  5

Exam 18: Labor Markets

Why might a completely fair and unbiased country club manager still exhibit status discrimination in deciding who can be a member and who cannot?

The wage a firm pays and the marginal product of labor tend to very different.

In the United States there were 5 occupational fatalities per 100,000 workers in 1992 and 3.8 occupational fatalities per 100,000 workers in 2007. What accounts for this 24% decrease in the occupational fatality rate?

Labor unions are often anti-immigration because immigration tends to depress wages by:

College graduates are paid more, on average, partly because they are expected to possess more human capital.

Statistical discrimination uses group stereotypes to make conclusions about individuals.

The marginal product of labor is the increase in a firm's revenues created by hiring an additional laborer.

During the 1970s, wage premiums for college graduates:

We expect jobs that are inherently more dangerous to pay higher wages, which is a compensating differential.

When employment discrimination stems from personal prejudices of employers, economic theory suggests that:

An individual's labor supply curve might not be purely upward sloping.

The productivity of the firm is directly related to the productivity of an individual worker.

Explain how market shifts in demand and/or supply can lead to higher wages for workers.

A union can lower wages by:

If the marginal product of labor is decreasing in labor, then a firm-level labor demand curve is:

Suppose that firms can hire whites for $10 an hour or equally productive blacks for $8 an hour. Which of the following is the most likely hiring practice for most firms?

The only reason that low-skilled workers in developing countries earn significantly less than low-skilled workers in developed countries is that there is a much higher supply of low-skilled workers in developing countries which in turn pushes wages lower.

Figure: Market for Plumbers If the market in this figure is in equilibrium, the hourly wage paid to plumbers is ______ and the marginal product of a plumber is ______.

Table: Stone Masons A construction company builds stone fireplaces. The market wage for a stonemason is $350 per day. The table depicts the marginal product of labor (MPL) per day for a given number of stonemasons. To maximize profits, this company should hire ______ stonemasons.

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

Figure: Market for Plumbers If the market in this figure is in equilibrium, the hourly wage paid to plumbers is and the marginal product of a plumber is .