Question 1

A consensus view among economists regarding the possibility of labor-market discrimination is that

Accepted Answer

A)  most wage differences among groups are attributable to discrimination. 
B)  many employers use compensating differentials to hide discriminatory practices. 
C)  wage differences among groups are not sufficient by themselves to determine how much discrimination there is. 
D)  all wage differences among groups are attributable to differences in human capital and compensating differentials. 
A)  most wage differences among groups are attributable to discrimination. 
B)  many employers use compensating differentials to hide discriminatory practices. 
C)  wage differences among groups are not sufficient by themselves to determine how much discrimination there is. 
D)  all wage differences among groups are attributable to differences in human capital and compensating differentials.

Question 2

Figure 19-4  
-Refer to Figure 19-4. If a union is successful in reducing supply from S1 to S2, the wage will

Accepted Answer

A)  rise from $15 per hour to $18 per hour and 100 fewer people will be employed. 
B)  rise from $15 per hour to $18 per hour and 200 more people will be employed. 
C)  fall from $15 per hour to $12 per hour and 100 more people will be employed. 
D)  fall from $18 per hour to $15 per hour and 200 fewer people will be employed. 
A)  rise from $15 per hour to $18 per hour and 100 fewer people will be employed. 
B)  rise from $15 per hour to $18 per hour and 200 more people will be employed. 
C)  fall from $15 per hour to $12 per hour and 100 more people will be employed. 
D)  fall from $18 per hour to $15 per hour and 200 fewer people will be employed.

Question 3

A natural correction to employer discrimination in market economies is the

Accepted Answer

A)  threat of judicial review. 
B)  profit motive. 
C)  political process. 
D)  union movement. 
A)  threat of judicial review. 
B)  profit motive. 
C)  political process. 
D)  union movement.

Question 4

A plumber who specializes in cleaning plugged sewer lines is typically paid a higher wage than a plumber who works on installing water systems in new residential housing. Which of the following would push the wages of plumbers who work on sewer lines higher?

Accepted Answer

A)  Plumbers who work on new residential housing require more training than plumbers working on sewer lines. 
B)  Plumbing jobs that involve sewer lines are likely to have a high element of personal satisfaction. 
C)  Plumbers who work with sewer lines are more likely to work the day shift. 
D)  plumbers who work with sewer lines are likely to be perceived as having a "dirty" job. 
A)  Plumbers who work on new residential housing require more training than plumbers working on sewer lines. 
B)  Plumbing jobs that involve sewer lines are likely to have a high element of personal satisfaction. 
C)  Plumbers who work with sewer lines are more likely to work the day shift. 
D)  plumbers who work with sewer lines are likely to be perceived as having a "dirty" job.

Question 5

Economists generally agree that

Accepted Answer

A)  human capital theory provides the best explanation of discriminatory practices. 
B)  differences in average wages do not by themselves provide conclusive evidence about the magnitude of discrimination in labor markets. 
C)  discrimination is exclusively an economic, rather than political, phenomenon. 
D)  most of the wage differentials observed in the U.S. economy are due to discrimination. 
A)  human capital theory provides the best explanation of discriminatory practices. 
B)  differences in average wages do not by themselves provide conclusive evidence about the magnitude of discrimination in labor markets. 
C)  discrimination is exclusively an economic, rather than political, phenomenon. 
D)  most of the wage differentials observed in the U.S. economy are due to discrimination.

Question 6

Why is a construction worker never likely to earn as much as a famous athlete?

Accepted Answer

A)  Compensating differentials create a higher wage for professional athletes. 
B)  Technological progress has advanced less in the construction industry then in sports training. 
C)  Productivity levels are low in the construction industry due to the high number of people willing to be construction workers. 
D)  A construction worker can provide his services to only a limited number of customers. 
A)  Compensating differentials create a higher wage for professional athletes. 
B)  Technological progress has advanced less in the construction industry then in sports training. 
C)  Productivity levels are low in the construction industry due to the high number of people willing to be construction workers. 
D)  A construction worker can provide his services to only a limited number of customers.

Question 7

One of the problems with calculating the true amount of discrimination that takes place in the market for labor is

Accepted Answer

A)  the inability to calculate wage differentials. 
B)  the inability to see changes in the wage differentials over a period of time. 
C)  the difficulty in measuring productivity differences between workers. 
D)  the difficulty in measuring female labor-force participation. 
A)  the inability to calculate wage differentials. 
B)  the inability to see changes in the wage differentials over a period of time. 
C)  the difficulty in measuring productivity differences between workers. 
D)  the difficulty in measuring female labor-force participation.

Question 8

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers offer two main hypotheses:

Accepted Answer

A)  one hypothesis emphasizes education, and the other emphasizes compensating differentials. 
B)  one hypothesis emphasizes education, and the other international trade. 
C)  one hypothesis emphasizes international trade, and the other emphasizes technology. 
D)  one hypothesis emphasizes technology, and the other emphasizes compensating differentials. 
A)  one hypothesis emphasizes education, and the other emphasizes compensating differentials. 
B)  one hypothesis emphasizes education, and the other international trade. 
C)  one hypothesis emphasizes international trade, and the other emphasizes technology. 
D)  one hypothesis emphasizes technology, and the other emphasizes compensating differentials.

Question 9

Among male workers over age 25, about what percent has a college degree? What is this percentage for black male workers over age 25?

Accepted Answer

The answer of Among male workers over age 25, about...

Question 10

The very high pay earned by the best actors and actresses is partially explained by the fact that

Accepted Answer

A)  they benefit from a compensating differential. 
B)  moviegoers all want to see the very best actors, not second-rate actors. 
C)  they have acting degrees from accredited acting schools. 
D)  the supply of good actors is very large. 
A)  they benefit from a compensating differential. 
B)  moviegoers all want to see the very best actors, not second-rate actors. 
C)  they have acting degrees from accredited acting schools. 
D)  the supply of good actors is very large.

Question 11

Table 19-2   Source: US Census Bureau and Mankiw's calculations
-Refer to Table 19-2. In 2011, on average how much more income would a man with a college degree earn than a man with a high school degree?

Accepted Answer

The answer of Table 19-2   Source: US Census...

Question 12

Why would a wage differential due to discrimination in hiring be unlikely to persist in a competitive labor market?

Accepted Answer

A)  There is a cost advantage for firms that do not discriminate. 
B)  Workers who are victims of discrimination will eventually drop out of the labor market. 
C)  Competing firms will hire fewer of the workers who are temporarily victimized by discrimination. 
D)  Discrimination cannot exist in markets. 
A)  There is a cost advantage for firms that do not discriminate. 
B)  Workers who are victims of discrimination will eventually drop out of the labor market. 
C)  Competing firms will hire fewer of the workers who are temporarily victimized by discrimination. 
D)  Discrimination cannot exist in markets.

Question 13

Name two occupations that have the two characteristics required for the superstar phenomenon.

Accepted Answer

The answer of Name two occupations that have the two...

Question 14

Figure 19-5  
-Refer to Figure 19-5. Suppose this market begins with demand for labor, D1, and supply of labor, S1, but the labor supply curve shifts to S2. Which of the following statements best describes the results?

Accepted Answer

A)  Fewer workers are employed, but those who are employed earn a higher wage. 
B)  More workers are employed but they earn a lower wage. 
C)  More workers are employed and they earn a higher wage. 
D)  The same number of workers are employed and they earn a higher wage. 
A)  Fewer workers are employed, but those who are employed earn a higher wage. 
B)  More workers are employed but they earn a lower wage. 
C)  More workers are employed and they earn a higher wage. 
D)  The same number of workers are employed and they earn a higher wage.

Question 15

Is measuring the effect of discrimination on wages relatively easy or relatively difficult? Explain?

Accepted Answer

It can be relatively difficult

Question 16

If government regulations make a certain job less dangerous, then we'd expect that the supply of labor for that job would

Accepted Answer

A)  increase, which by itself would raise the wage for that job. 
B)  increase, which by itself would reduce the wage for that job. 
C)  decrease, which by itself would raise the wage for that job. 
D)  decrease, which by itself would reduce the wage for that job. 
A)  increase, which by itself would raise the wage for that job. 
B)  increase, which by itself would reduce the wage for that job. 
C)  decrease, which by itself would raise the wage for that job. 
D)  decrease, which by itself would reduce the wage for that job.

Question 17

It is likely that, if we could measure the quality as well as the quantity of education,

Accepted Answer

A)  the human-capital argument would become less compelling as a means of explaining wage differentials between white workers and black workers. 
B)  the human-capital argument would become less compelling as a means of explaining wage differentials between male workers and female workers. 
C)  wage differentials between white workers and black workers would be more puzzling than they are now. 
D)  wage differentials between white workers and black workers would be more fully explained. 
A)  the human-capital argument would become less compelling as a means of explaining wage differentials between white workers and black workers. 
B)  the human-capital argument would become less compelling as a means of explaining wage differentials between male workers and female workers. 
C)  wage differentials between white workers and black workers would be more puzzling than they are now. 
D)  wage differentials between white workers and black workers would be more fully explained.

Question 18

Figure 19-5  
-Refer to Figure 19-5. Given demand for labor, D1, and supply of labor, S2, what is the surplus of labor if a minimum wage of $8 per hour is imposed on this market?

Accepted Answer

A)  100 
B)  200 
C)  300 
D)  400 
A)  100 
B)  200 
C)  300 
D)  400

Question 19

Workers with more human capital on average earn substantially higher pay than workers with less human capital in

Accepted Answer

A)  most countries but not in the United States. 
B)  the United States but not in most other countries. 
C)  the United States and in most other countries. 
D)  None of the above is correct; the evidence fails to indicate that human capital is a significant factor in determining earnings anywhere in the world. 
A)  most countries but not in the United States. 
B)  the United States but not in most other countries. 
C)  the United States and in most other countries. 
D)  None of the above is correct; the evidence fails to indicate that human capital is a significant factor in determining earnings anywhere in the world.

Question 20

The superstar phenomenon explains why professional athletes earn more than amateur athletes.

Accepted Answer

A) True 
 B)False

Exam 19: Earnings and Discrimination

A consensus view among economists regarding the possibility of labor-market discrimination is that

Figure 19-4 -Refer to Figure 19-4. If a union is successful in reducing supply from S1 to S2, the wage will

A natural correction to employer discrimination in market economies is the

A plumber who specializes in cleaning plugged sewer lines is typically paid a higher wage than a plumber who works on installing water systems in new residential housing. Which of the following would push the wages of plumbers who work on sewer lines higher?

Economists generally agree that

Why is a construction worker never likely to earn as much as a famous athlete?

One of the problems with calculating the true amount of discrimination that takes place in the market for labor is

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers offer two main hypotheses:

Among male workers over age 25, about what percent has a college degree? What is this percentage for black male workers over age 25?

The very high pay earned by the best actors and actresses is partially explained by the fact that

Table 19-2 Source: US Census Bureau and Mankiw's calculations -Refer to Table 19-2. In 2011, on average how much more income would a man with a college degree earn than a man with a high school degree?

Why would a wage differential due to discrimination in hiring be unlikely to persist in a competitive labor market?

Name two occupations that have the two characteristics required for the superstar phenomenon.

Figure 19-5 -Refer to Figure 19-5. Suppose this market begins with demand for labor, D1, and supply of labor, S1, but the labor supply curve shifts to S2. Which of the following statements best describes the results?

Is measuring the effect of discrimination on wages relatively easy or relatively difficult? Explain?

If government regulations make a certain job less dangerous, then we'd expect that the supply of labor for that job would

It is likely that, if we could measure the quality as well as the quantity of education,

Figure 19-5 -Refer to Figure 19-5. Given demand for labor, D1, and supply of labor, S2, what is the surplus of labor if a minimum wage of $8 per hour is imposed on this market?

Workers with more human capital on average earn substantially higher pay than workers with less human capital in

The superstar phenomenon explains why professional athletes earn more than amateur athletes.

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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