Question 1

In a labor market free from discrimination, wages for workers that are employed by the same company will still differ.

Accepted Answer

A) True 
 B)False

Question 2

A compensating differential refers to a difference in wages that arises from nonmonetary characteristics.

Accepted Answer

A) True 
 B)False

Question 3

Suppose that a company hires recent college graduates for two types of jobs, sales people and credit analysts. The hours worked and skill levels are the same for both positions. The sales people get to travel to several desirable locations, whereas the credit analysts do not leave the home office. When comparing the salaries of the two positions, it is likely that the company pays the

Accepted Answer

A)  sales people less as a compensating differential. 
B)  credit analysts less as a compensating differential. 
C)  same salary for both positions because they require the same skill level. 
D)  same salary for both positions because it would be illegal to do otherwise. 
A)  sales people less as a compensating differential. 
B)  credit analysts less as a compensating differential. 
C)  same salary for both positions because they require the same skill level. 
D)  same salary for both positions because it would be illegal to do otherwise.

Question 4

The wage difference between jobs that require education and those that don't

Accepted Answer

A)  is not likely to be related to productivity differences. 
B)  is a barrier to obtaining an education. 
C)  does not affect the supply of workers in the different labor markets. 
D)  encourages workers to bear the cost of acquiring education. 
A)  is not likely to be related to productivity differences. 
B)  is a barrier to obtaining an education. 
C)  does not affect the supply of workers in the different labor markets. 
D)  encourages workers to bear the cost of acquiring education.

Question 5

Discrimination is an emotionally charged issue that is impossible to study objectively.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following explains the "beauty premium" differences in wages?

Accepted Answer

A)  People who spend time on their personal appearance may send a signal that they are more productive workers. 
B)  Personal appearance and intelligence are inversely related. 
C)  The "superstar phenomenon" explains the "beauty premium." 
D)  Better-looking people are more efficient; thus, they are paid an efficiency wage. 
A)  People who spend time on their personal appearance may send a signal that they are more productive workers. 
B)  Personal appearance and intelligence are inversely related. 
C)  The "superstar phenomenon" explains the "beauty premium." 
D)  Better-looking people are more efficient; thus, they are paid an efficiency wage.

Question 7

Profit-maximizing, competitive firms will not discriminate in the hiring of workers unless consumers exercise a preference for discrimination in product markets or governments mandate discrimination.

Accepted Answer

A) True 
 B)False

Question 8

In the early 20th century, streetcars in many southern cities required that white passengers sit in the front of the car while black passengers sat in the back. The firms that ran the streetcars were

Accepted Answer

A)  in favor of the segregation laws because they lowered costs and increased profits. 
B)  against the segregation laws because they increased costs and lowered profits. 
C)  lobbied local governments to enact such laws because their customers were willing to pay more for service in order to maintain the segregation. 
D)  concerned about the effects of smoking. Since blacks smoked more than whites, they were supportive of the segregation laws. 
A)  in favor of the segregation laws because they lowered costs and increased profits. 
B)  against the segregation laws because they increased costs and lowered profits. 
C)  lobbied local governments to enact such laws because their customers were willing to pay more for service in order to maintain the segregation. 
D)  concerned about the effects of smoking. Since blacks smoked more than whites, they were supportive of the segregation laws.

Question 9

The signaling theory of education maintains that workers who complete specific levels of education signal their high productivity to potential employers.

Accepted Answer

A) True 
 B)False

Question 10

Which of these instances would constitute labor-market discrimination? Henry receives a higher wage than Ryan. Henry and Ryan are identical in all of their labor-market characteristics except that

Accepted Answer

A)  Henry is a college graduate, and Ryan has only a high school diploma. 
B)  Henry has 10 years of experience at his job, whereas Ryan has only five years of experience. 
C)  Henry is white and Ryan is Black. 
D)  by objective measures Henry consistently outperforms Ryan. 
A)  Henry is a college graduate, and Ryan has only a high school diploma. 
B)  Henry has 10 years of experience at his job, whereas Ryan has only five years of experience. 
C)  Henry is white and Ryan is Black. 
D)  by objective measures Henry consistently outperforms Ryan.

Question 11

Evidence from a 1988 study of the market for professional basketball players

Accepted Answer

A)  found no evidence of consumer-driven wage discrimination. 
B)  found some evidence of consumer-driven wage discrimination. 
C)  found that measurement of marginal productivity was very difficult for basketball players. 
D)  indicated that sports with strong player associations are unlikely to experience wage discrimination. 
A)  found no evidence of consumer-driven wage discrimination. 
B)  found some evidence of consumer-driven wage discrimination. 
C)  found that measurement of marginal productivity was very difficult for basketball players. 
D)  indicated that sports with strong player associations are unlikely to experience wage discrimination.

Question 12

Which of the following factors affects the marginal productivity of a worker?

Accepted Answer

A)  human capital 
B)  the worker's disposable income 
C)  compensating wage differentials 
D)  discrimination based on age, race, or gender 
A)  human capital 
B)  the worker's disposable income 
C)  compensating wage differentials 
D)  discrimination based on age, race, or gender

Question 13

Table 19-1   Source: US Census Bureau and Mankiw's calculations
-Refer to Table 19-1. From 1975 to 2011, the salary gap among women who graduate from college compared to those who complete only high school

Accepted Answer

A)  increased by 35% while the salary gap among men increased by 42%. 
B)  more than doubled while the salary gap among men rose significantly but less than doubled. 
C)  increased, but the salary gap among men decreased. 
D)  decreased, but the salary gap among men increased. 
A)  increased by 35% while the salary gap among men increased by 42%. 
B)  more than doubled while the salary gap among men rose significantly but less than doubled. 
C)  increased, but the salary gap among men decreased. 
D)  decreased, but the salary gap among men increased.

Question 14

Politicians often point to wage differentials as evidence of labor-market discrimination against ethnic minorities and women; however, economists argue against this approach because people differ in the amount of human capital they have and the kinds of work they are willing and able to do.

Accepted Answer

A) True 
 B)False

Question 15

Explain the role of job experience in explaining the differences between the average wages of men and women.

Accepted Answer

Women, who have primary responsibility f

Question 16

Which of the following would be considered an investment in human capital?

Accepted Answer

A)  education 
B)  a teacher's blackboard 
C)  the purchase of a new computer to enhance labor productivity 
D)  All of the above are correct. 
A)  education 
B)  a teacher's blackboard 
C)  the purchase of a new computer to enhance labor productivity 
D)  All of the above are correct.

Question 17

Which of the following theories would suggest that attending school does not improve productivity but that high- ability people are more likely to stay in school?

Accepted Answer

A)  physical-capital theory 
B)  human-capital theory 
C)  signaling theory 
D)  neoclassical theory 
A)  physical-capital theory 
B)  human-capital theory 
C)  signaling theory 
D)  neoclassical theory

Question 18

Customer discrimination is illegal in the United States.

Accepted Answer

A) True 
 B)False

Question 19

Efficiency wages may decrease employee turnover.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is the most likely outcome of raising the minimum wage?

Accepted Answer

A)  an increase in both the quantity of labor supplied by workers and the quantity of labor demanded by firms 
B)  an increase in the quantity of labor supplied by workers and a decrease in the quantity of labor demanded by firms 
C)  a decrease in the quantity of labor supplied by workers and an increase in the quantity of labor demanded by firms 
D)  a decrease in both the quantity of labor supplied by workers and the quantity of labor demanded by firms 
A)  an increase in both the quantity of labor supplied by workers and the quantity of labor demanded by firms 
B)  an increase in the quantity of labor supplied by workers and a decrease in the quantity of labor demanded by firms 
C)  a decrease in the quantity of labor supplied by workers and an increase in the quantity of labor demanded by firms 
D)  a decrease in both the quantity of labor supplied by workers and the quantity of labor demanded by firms

Exam 19: Earnings and Discrimination

In a labor market free from discrimination, wages for workers that are employed by the same company will still differ.

A compensating differential refers to a difference in wages that arises from nonmonetary characteristics.

The wage difference between jobs that require education and those that don't

Discrimination is an emotionally charged issue that is impossible to study objectively.

Which of the following explains the "beauty premium" differences in wages?

Profit-maximizing, competitive firms will not discriminate in the hiring of workers unless consumers exercise a preference for discrimination in product markets or governments mandate discrimination.

In the early 20th century, streetcars in many southern cities required that white passengers sit in the front of the car while black passengers sat in the back. The firms that ran the streetcars were

The signaling theory of education maintains that workers who complete specific levels of education signal their high productivity to potential employers.

Which of these instances would constitute labor-market discrimination? Henry receives a higher wage than Ryan. Henry and Ryan are identical in all of their labor-market characteristics except that

Evidence from a 1988 study of the market for professional basketball players

Which of the following factors affects the marginal productivity of a worker?

Table 19-1 Source: US Census Bureau and Mankiw's calculations -Refer to Table 19-1. From 1975 to 2011, the salary gap among women who graduate from college compared to those who complete only high school

Politicians often point to wage differentials as evidence of labor-market discrimination against ethnic minorities and women; however, economists argue against this approach because people differ in the amount of human capital they have and the kinds of work they are willing and able to do.

Explain the role of job experience in explaining the differences between the average wages of men and women.

Which of the following would be considered an investment in human capital?

Which of the following theories would suggest that attending school does not improve productivity but that high- ability people are more likely to stay in school?

Customer discrimination is illegal in the United States.

Efficiency wages may decrease employee turnover.

Which of the following is the most likely outcome of raising the minimum wage?

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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