Exam 19: Earnings and Discrimination

If unskilled labor is relatively plentiful and cheap in many foreign countries, then as the United States expands its trade with these foreign countries, the domestic demand for

Jake and Zach are identical twins who attended grammar school through college together. Jake took a job as an engineer who does not have to travel out of the state. Zach took a job as an engineer who must travel out of state once a week. Jake earns $125,000 a year, and Zach earns $155,000 a year. Select the best explanation for this wage difference.

Which of the following statements is not correct?

Tom, the manager and owner of a small company, believes in the signaling theory of education, not the human capital theory. As such, Tom would be most likely to agree with which of the following quotes?

How does the theory of efficiency wages explain above-equilibrium wages?

Which of the following explains why soccer players make millions of dollars in Europe but do not in the United States?

Dr. Benson is regarded as, by far, the best dentist in his part of the country, yet his income is not significantly higher than the average income for a dentist in his area. In contrast, Bo Johnson, the best baseball player in that region, earns five times the average salary of all baseball players. The most likely explanation is that

The accumulation of investments in people is called

When discrimination occurs as a result of employer prejudice, discriminating firms do not maximize profits.

The theory of efficiency wages suggests that firms may pay above-equilibrium wages

Which of the following is not an example of efficiency wages?

If we were to observe above-equilibrium wages in a particular labor market, then a possible explanation might be that

People are willing to invest in human capital because

Figure 19-5 -Refer to Figure 19-5. Given demand for labor, D1, and supply of labor, S1, what is the quantity demanded of labor if a minimum wage of $8 per hour is imposed on this market?

Which of the following statements is not correct?

Figure 19-3 The manufacturing labor market. -Refer to Figure 19-3. Suppose the manufacturing labor market, which is non-unionized, is in equilibrium at a wage equal to $25. Suppose now that the AFL-CIO (a labor organization) organizes the workers in the manufacturing market and negotiates a wage of $30 per hour. Because of the union,

Expenditures on human capital

Explain why the following situation is likely to persist: soccer players in Europe are the highest paid athletes and in the US they are among the lowest paid athletes.

Daryn and Nick work for two different companies, but each performs the same job working on a loading dock. Daryn, however, earns a higher salary than his friend Nick The difference in salary could illustrate union wages if Daryn's annual salary is covered by a collective bargaining agreement and Nick's is not.

Why do college graduates earn more in wages than workers with only a high school diploma?