Question 1

Two economists sent out résumés with names like Lakisha and Jamal versus other names like Emily and Greg. Their study found that:

Accepted Answer

A)  résumés with names like Lakisha and Jamal got fewer interview requests. 
B)  having an African-American name leads to lower earnings in the long run. 
C)  once the neighborhood the person comes from is controlled for, there is still a significant difference in earnings. 
D)  résumés with names like Emily and Greg got fewer interview requests. 
A)  résumés with names like Lakisha and Jamal got fewer interview requests. 
B)  having an African-American name leads to lower earnings in the long run. 
C)  once the neighborhood the person comes from is controlled for, there is still a significant difference in earnings. 
D)  résumés with names like Emily and Greg got fewer interview requests.

Question 2

The wages of office cleaners in the United States are ________ than the wages of office cleaners in India because ________.

Accepted Answer

A)  lower; few Americans want jobs as office cleaners generating a lower supply of office cleaners in the United States 
B)  lower; Indians work more hours 
C)  greater; American offices are more productive, hence more valuable to keep clean 
D)  greater; more Indian cleaners are in a union 
A)  lower; few Americans want jobs as office cleaners generating a lower supply of office cleaners in the United States 
B)  lower; Indians work more hours 
C)  greater; American offices are more productive, hence more valuable to keep clean 
D)  greater; more Indian cleaners are in a union

Question 3

If the price of output in an industry rises, firms in that industry will ______ labor.

Accepted Answer

A)  increase their demand for 
B)  increase their supply of 
C)  decrease their demand for 
D)  decrease their supply of 
A)  increase their demand for 
B)  increase their supply of 
C)  decrease their demand for 
D)  decrease their supply of

Question 4

Consider the impact that price floors have in a market. In what way is union behavior similar to implementing a price floor?

Accepted Answer

By limiting membership in unions and thr

Question 5

If we know the marginal product of labor for every unit of labor, we can derive:

Accepted Answer

A)  the demand curve for labor. 
B)  the supply curve for labor. 
C)  the equilibrium wage. 
D)  the equilibrium quantity of workers. 
A)  the demand curve for labor. 
B)  the supply curve for labor. 
C)  the equilibrium wage. 
D)  the equilibrium quantity of workers.

Question 6

Consider reality shows like Ice Road Truckers and The Deadliest Catch and Axe-Men. They feature very dangerous jobs and the people who are willing to take them. What concepts have you studied that explain why people do these jobs?

Accepted Answer

They respond to the higher wages earned

Question 7

A college education in the United States:

Accepted Answer

A)  has been shown to earn a wage premium. 
B)  is not counted as human capital market issues. 
C)  does not lead to any difference in wages as compared with a high school education. 
D)  does not command the same high wages as it did in the past. 
A)  has been shown to earn a wage premium. 
B)  is not counted as human capital market issues. 
C)  does not lead to any difference in wages as compared with a high school education. 
D)  does not command the same high wages as it did in the past.

Question 8

Why are private security guards in Iraq paid more than private security guards in the United States?

Accepted Answer

A)  The security guards in Iraq receive a compensating differential to offset the increased risk of death. 
B)  Being a security guard in Iraq is more glamorous than in the United States. 
C)  Being a security guard in Iraq is likely to lead to better jobs in the future. 
D)  Being a security guard in the United States is a valued job, hence the workers are willing to take a lower wage. 
A)  The security guards in Iraq receive a compensating differential to offset the increased risk of death. 
B)  Being a security guard in Iraq is more glamorous than in the United States. 
C)  Being a security guard in Iraq is likely to lead to better jobs in the future. 
D)  Being a security guard in the United States is a valued job, hence the workers are willing to take a lower wage.

Question 9

The labor supply curve for an individual is always upward sloping.

Accepted Answer

A) True 
 B)False

Question 10

An upward-sloping labor supply curve in the market is the normal situation.

Accepted Answer

A) True 
 B)False

Question 11

If a firm refuses to hire minorities because of prejudice, its profits:

Accepted Answer

A)  tend to increase. 
B)  tend not to be affected. 
C)  tend to decrease. 
D)  will increase slightly. 
A)  tend to increase. 
B)  tend not to be affected. 
C)  tend to decrease. 
D)  will increase slightly.

Question 12

Which of the following statements is TRUE?
I. The presence of a union will decrease the supply of labor.
II. Unions increase the wages of their members by reducing employment.
III. Countries with the highest unionization rates have the highest wage levels.

Accepted Answer

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

Question 13

Suppose that a firm needs 20 workers, and pays 10 male workers $100 per day and 10 female workers $60 a day. These wage differences are ________ caused by employer discrimination since ________.

Accepted Answer

A)  most likely; the employer could decrease profits by $1,000 per day by hiring all women 
B)  most likely; the employer could increase profits by $400 per day by hiring all women 
C)  likely not; the employer could increase profits by $400 per day by hiring all women 
D)  likely not; the employer could decrease profits by $1,000 per day by hiring all women 
A)  most likely; the employer could decrease profits by $1,000 per day by hiring all women 
B)  most likely; the employer could increase profits by $400 per day by hiring all women 
C)  likely not; the employer could increase profits by $400 per day by hiring all women 
D)  likely not; the employer could decrease profits by $1,000 per day by hiring all women

Question 14

Suppose that the market for window cleaners is in equilibrium at a wage of $16. If window cleaning becomes safer:

Accepted Answer

A)  the demand for window cleaners will increase, causing the equilibrium wage to rise above $16. 
B)  the demand for window cleaners will decrease, causing the equilibrium wage to fall below $16. 
C)  the supply of window cleaners will increase, causing the equilibrium wage to fall below $16. 
D)  the supply of window cleaners will decrease, causing the equilibrium wage to fall below $16. 
A)  the demand for window cleaners will increase, causing the equilibrium wage to rise above $16. 
B)  the demand for window cleaners will decrease, causing the equilibrium wage to fall below $16. 
C)  the supply of window cleaners will increase, causing the equilibrium wage to fall below $16. 
D)  the supply of window cleaners will decrease, causing the equilibrium wage to fall below $16.

Question 15

Which of the following is NOT a possible cause of the increasing return to college education since the 1980s?

Accepted Answer

A)  The ability to work with computers has made an education more valuable than in times past. 
B)  The flow of new people into the ranks of the college-educated has been limited. 
C)  The cost of college education has been skyrocketing. 
D)  More people are obtaining a college degree, thus increasing the wages of workers with a college degree. 
A)  The ability to work with computers has made an education more valuable than in times past. 
B)  The flow of new people into the ranks of the college-educated has been limited. 
C)  The cost of college education has been skyrocketing. 
D)  More people are obtaining a college degree, thus increasing the wages of workers with a college degree.

Question 16

Which of the following is NOT the primary method that unions use to raise wages?

Accepted Answer

A)  restricting their membership 
B)  threatening to strike unless employers hire union labor 
C)  reducing the supply of labor to an industry 
D)  lobbying the government to increase the minimum wage 
A)  restricting their membership 
B)  threatening to strike unless employers hire union labor 
C)  reducing the supply of labor to an industry 
D)  lobbying the government to increase the minimum wage

Question 17

In terms of supply and demand, unions decrease the supply of labor, driving up wages and reducing employment.

Accepted Answer

A) True 
 B)False

Question 18

Customer-based discrimination is weakened by:

Accepted Answer

A)  higher wages. 
B)  country clubs. 
C)  segregation. 
D)  economic growth. 
A)  higher wages. 
B)  country clubs. 
C)  segregation. 
D)  economic growth.

Question 19

The marginal product of labor is:

Accepted Answer

A)  the revenue created by a firm's entire workforce. 
B)  the revenue created by the average worker. 
C)  the increase in a firm's revenues created by hiring an additional laborer. 
D)  the decrease in a firm's revenues created by hiring an additional laborer. 
A)  the revenue created by a firm's entire workforce. 
B)  the revenue created by the average worker. 
C)  the increase in a firm's revenues created by hiring an additional laborer. 
D)  the decrease in a firm's revenues created by hiring an additional laborer.

Question 20

A market labor supply curve:

Accepted Answer

A)  is always positively sloped. 
B)  is always negatively sloped. 
C)  is always vertical. 
D)  can be positively sloped, vertical, or negatively sloped at different ranges. 
A)  is always positively sloped. 
B)  is always negatively sloped. 
C)  is always vertical. 
D)  can be positively sloped, vertical, or negatively sloped at different ranges.

Exam 18: Labor Markets

Two economists sent out résumés with names like Lakisha and Jamal versus other names like Emily and Greg. Their study found that:

The wages of office cleaners in the United States are ________ than the wages of office cleaners in India because ________.

If the price of output in an industry rises, firms in that industry will ______ labor.

Consider the impact that price floors have in a market. In what way is union behavior similar to implementing a price floor?

If we know the marginal product of labor for every unit of labor, we can derive:

Consider reality shows like Ice Road Truckers and The Deadliest Catch and Axe-Men. They feature very dangerous jobs and the people who are willing to take them. What concepts have you studied that explain why people do these jobs?

A college education in the United States:

Why are private security guards in Iraq paid more than private security guards in the United States?

The labor supply curve for an individual is always upward sloping.

An upward-sloping labor supply curve in the market is the normal situation.

If a firm refuses to hire minorities because of prejudice, its profits:

Which of the following statements is TRUE? I. The presence of a union will decrease the supply of labor. II. Unions increase the wages of their members by reducing employment. III. Countries with the highest unionization rates have the highest wage levels.

Suppose that a firm needs 20 workers, and pays 10 male workers $100 per day and 10 female workers $60 a day. These wage differences are ________ caused by employer discrimination since ________.

Suppose that the market for window cleaners is in equilibrium at a wage of $16. If window cleaning becomes safer:

Which of the following is NOT a possible cause of the increasing return to college education since the 1980s?

Which of the following is NOT the primary method that unions use to raise wages?

In terms of supply and demand, unions decrease the supply of labor, driving up wages and reducing employment.

Customer-based discrimination is weakened by:

The marginal product of labor is:

A market labor supply curve:

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

The wages of office cleaners in the United States are than the wages of office cleaners in India because .

Suppose that a firm needs 20 workers, and pays 10 male workers $100 per day and 10 female workers $60 a day. These wage differences are caused by employer discrimination since .