Question 1

Discrimination by employees:

Accepted Answer

A)  will not lead to segregated businesses or workplaces. 
B)  will not persist because the employer faces little profit incentive to hire the disfavored group. 
C)  is a situation in which one group of workers doesn't want to work with another group of workers. 
D)  is a situation in which all groups of workers want to work with all other groups of workers. 
A)  will not lead to segregated businesses or workplaces. 
B)  will not persist because the employer faces little profit incentive to hire the disfavored group. 
C)  is a situation in which one group of workers doesn't want to work with another group of workers. 
D)  is a situation in which all groups of workers want to work with all other groups of workers.

Question 2

Which of the following may NOT explain why tall people tend to have higher wages than short people?

Accepted Answer

A)  Employer-discrimination against short people. 
B)  Taller people might get more respect from their subordinates. 
C)  Taller people may have more self-confidence. 
D)  Employers subconsciously think that taller people are less trouble. 
A)  Employer-discrimination against short people. 
B)  Taller people might get more respect from their subordinates. 
C)  Taller people may have more self-confidence. 
D)  Employers subconsciously think that taller people are less trouble.

Question 3

Compared with a similar job that requires little human capital labor market issues, a job that requires a large amount of human capital labor market issues will likely pay:

Accepted Answer

A)  a lower wage rate. 
B)  a higher wage rate. 
C)  the same wage rate. 
D)  twice the wage rate. 
A)  a lower wage rate. 
B)  a higher wage rate. 
C)  the same wage rate. 
D)  twice the wage rate.

Question 4

Wages for low-skilled positions are typically higher in developed countries than wages for identical positions in less-developed countries. Which of the following explains why this is the case?
I. There is a greater supply of low-skilled labor in less-developed countries.
II. There is a greater demand for low-skilled labor in developed countries.
III. There is a greater demand for low-skilled labor in less-developed countries.

Accepted Answer

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

Question 5

If the price of output in an industry falls, 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 6

A crime scene cleaner earns about three to four times more than an office cleaner, even though neither job requires a college degree. This difference in wages:

Accepted Answer

A)  is solely because of differences in demand. 
B)  results from discrimination because most office cleaners are women. 
C)  reflects a compensating differential. 
D)  is caused by differences in labor market issues. 
A)  is solely because of differences in demand. 
B)  results from discrimination because most office cleaners are women. 
C)  reflects a compensating differential. 
D)  is caused by differences in labor market issues.

Question 7

If Bob's wages ______ and he works ______ hours, his labor supply curve slopes downward.

Accepted Answer

A)  increase; fewer 
B)  increase; more 
C)  decrease; fewer 
D)  increase by 10%; 10% more 
A)  increase; fewer 
B)  increase; more 
C)  decrease; fewer 
D)  increase by 10%; 10% more

Question 8

The individual supply curve for labor:

Accepted Answer

A)  slopes up. 
B)  slopes down. 
C)  is flat. 
D)  starts sloping up and then bends back as wages rise. 
A)  slopes up. 
B)  slopes down. 
C)  is flat. 
D)  starts sloping up and then bends back as wages rise.

Question 9

Figure: Marginal Product of Labor   The firm in this figure will hire ______ worker(s) at a wage of $10 and 2 workers at a wage of _______.

Accepted Answer

A)  4; $18 
B)  3; $15 
C)  1; $6 
D)  3; $17 
A)  4; $18 
B)  3; $15 
C)  1; $6 
D)  3; $17

Question 10

If a union forms in a market that is currently in equilibrium:

Accepted Answer

A)  wages, employment, and working conditions will improve. 
B)  wages, employment, and working conditions will decline. 
C)  wages will increase and employment will remain the same. 
D)  the number of workers employed may decrease. 
A)  wages, employment, and working conditions will improve. 
B)  wages, employment, and working conditions will decline. 
C)  wages will increase and employment will remain the same. 
D)  the number of workers employed may decrease.

Question 11

Statistical discrimination is:

Accepted Answer

A)  statistical data of discrimination. 
B)  applying statistical analysis in discrimination. 
C)  collecting information to justify hiring individuals. 
D)  using information about group averages to make conclusions about individuals. 
A)  statistical data of discrimination. 
B)  applying statistical analysis in discrimination. 
C)  collecting information to justify hiring individuals. 
D)  using information about group averages to make conclusions about individuals.

Question 12

A firm should be willing to pay $20 to hire a worker with a marginal product of $15.

Accepted Answer

A) True 
 B)False

Question 13

With the aid of a graph, explain how unions raise wages in unionized industries.

Accepted Answer

The answer is shown in Figure 18.8 of th

Question 14

The advent of office computers is thought by some economists to have ______ the returns to education.

Accepted Answer

A)  increased 
B)  decreased 
C)  maintained 
D)  eliminated 
A)  increased 
B)  decreased 
C)  maintained 
D)  eliminated

Question 15

Discrimination by customers:

Accepted Answer

A)  means that there will not be wage differences by race. 
B)  becomes more common with economic growth. 
C)  means that some customers might not want to do business with firms that hire certain workers. 
D)  increases with falling costs of production. 
A)  means that there will not be wage differences by race. 
B)  becomes more common with economic growth. 
C)  means that some customers might not want to do business with firms that hire certain workers. 
D)  increases with falling costs of production.

Question 16

Labor market issues give firms an incentive to increase safety only if:

Accepted Answer

A)  firms perceive enough potential profit to pay for workers' safety. 
B)  workers know that the job is risky. 
C)  the premium of workers' compensation insurance is low. 
D)  the workers request it. 
A)  firms perceive enough potential profit to pay for workers' safety. 
B)  workers know that the job is risky. 
C)  the premium of workers' compensation insurance is low. 
D)  the workers request it.

Question 17

Economic growth will lead to safer workplaces, as workers use their increased wealth to buy more safety.

Accepted Answer

A) True 
 B)False

Question 18

Labor market issues are:

Accepted Answer

A)  slaves. 
B)  physical strength and stamina. 
C)  machines that require a human to operate them. 
D)  tools of the mind; the stuff in people's heads that makes them productive. 
A)  slaves. 
B)  physical strength and stamina. 
C)  machines that require a human to operate them. 
D)  tools of the mind; the stuff in people's heads that makes them productive.

Question 19

Evidence from studies by some economists on professional basketball found there has been:

Accepted Answer

A)  statistical discrimination against black players. 
B)  statistical discrimination against white European players. 
C)  preference based discrimination against black players. 
D)  preference based discrimination against white European players. 
A)  statistical discrimination against black players. 
B)  statistical discrimination against white European players. 
C)  preference based discrimination against black players. 
D)  preference based discrimination against white European players.

Question 20

Which of the following best explains why assembly-line workers in the United States earn significantly more than assembly-line workers in Mexico?
I. The supply of low-skilled laborers, such as those that work on assembly lines, is higher in Mexico.
II. The demand for assembly-line workers is higher in the United States.
III. Assembly-line workers are more productive in the United States.

Accepted Answer

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

Exam 18: Labor Markets

Discrimination by employees:

Which of the following may NOT explain why tall people tend to have higher wages than short people?

Compared with a similar job that requires little human capital labor market issues, a job that requires a large amount of human capital labor market issues will likely pay:

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

A crime scene cleaner earns about three to four times more than an office cleaner, even though neither job requires a college degree. This difference in wages:

If Bob's wages ______ and he works ______ hours, his labor supply curve slopes downward.

The individual supply curve for labor:

Figure: Marginal Product of Labor The firm in this figure will hire ______ worker(s) at a wage of $10 and 2 workers at a wage of _______.

If a union forms in a market that is currently in equilibrium:

Statistical discrimination is:

A firm should be willing to pay $20 to hire a worker with a marginal product of $15.

With the aid of a graph, explain how unions raise wages in unionized industries.

The advent of office computers is thought by some economists to have ______ the returns to education.

Discrimination by customers:

Labor market issues give firms an incentive to increase safety only if:

Economic growth will lead to safer workplaces, as workers use their increased wealth to buy more safety.

Labor market issues are:

Evidence from studies by some economists on professional basketball found there has been:

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

If Bob's wages and he works hours, his labor supply curve slopes downward.

Figure: Marginal Product of Labor The firm in this figure will hire worker(s) at a wage of $10 and 2 workers at a wage of _.