Question 1

Superstars arise in markets in which every customer in the market is able to enjoy the good supplied by the

Accepted Answer

The answer of Superstars arise in markets in which every...

Question 2

Bob, the manager and owner of a small company, believes in the theory of efficiency wages. As such, Bob would be most likely to agree with which of the following quotes?

Accepted Answer

A)  "The only place where success comes before work is in the dictionary." 
B)  "Work hard. Play harder." 
C)  "Pay a man for the job you want him to do." 
D)  "Imagination is more important than knowledge." 
A)  "The only place where success comes before work is in the dictionary." 
B)  "Work hard. Play harder." 
C)  "Pay a man for the job you want him to do." 
D)  "Imagination is more important than knowledge."

Question 3

Evidence of differences in the average wages of black workers compared to white workers

Accepted Answer

A)  does not alone provide conclusive evidence of discrimination. 
B)  clearly indicates differences in productivity between races. 
C)  is seldom used to provide evidence of discriminatory bias. 
D)  clearly indicates discrimination on the basis of race. 
A)  does not alone provide conclusive evidence of discrimination. 
B)  clearly indicates differences in productivity between races. 
C)  is seldom used to provide evidence of discriminatory bias. 
D)  clearly indicates discrimination on the basis of race.

Question 4

The competition experiment conducted by economists Muriel Niederle and Lise Vesterlund was consistent with the results of Terry Odean which were that

Accepted Answer

A)  men were better at math than women. 
B)  men chose competition more because they were better at sports than women. 
C)  men trade stocks excessively while women adopt a buy-and-hold strategy. 
D)  streetcar companies were not in favor of segregation because it hurt their profits. 
A)  men were better at math than women. 
B)  men chose competition more because they were better at sports than women. 
C)  men trade stocks excessively while women adopt a buy-and-hold strategy. 
D)  streetcar companies were not in favor of segregation because it hurt their profits.

Question 5

If the signaling theory of education is correct,

Accepted Answer

A)  education increases productivity and educated workers are paid more. 
B)  education increases productivity but educated workers are not paid more. 
C)  education does not increase productivity but educated workers earn more. 
D)  education does not increase productivity and educated workers do not earn more 
A)  education increases productivity and educated workers are paid more. 
B)  education increases productivity but educated workers are not paid more. 
C)  education does not increase productivity but educated workers earn more. 
D)  education does not increase productivity and educated workers do not earn more

Question 6

List the productivity factors that may explain the differences in pay between men and women in similar occupations. Do any of these factors arise as a result of cultural or social traditions? If so, describe how changes in social relationships will affect the pay gap over time.

Accepted Answer

Job experience, education, lif

Question 7

Figure 19-5  
-Refer to Figure 19-5. Given demand for labor, D1, and supply of labor, S2, which of the following could be considered an efficiency wage?

Accepted Answer

A)  $4 
B)  $5 
C)  $6 
D)  $7 
A)  $4 
B)  $5 
C)  $6 
D)  $7

Question 8

Figure 19-6  
-Refer to Figure 19-6. Given demand, D1, and supply, S1, how many workers are unemployed if a minimum wage of $8 per hour is imposed on this market?

Accepted Answer

The answer of Figure 19-6  
-Refer to Figure 19-6....

Question 9

After an employer pays the cost of educating a worker,

Accepted Answer

A)  the worker has a higher level of human capital. 
B)  the worker should become more productive. 
C)  the worker might look for another job unless his employer pays him more. 
D)  All of the above are correct. 
A)  the worker has a higher level of human capital. 
B)  the worker should become more productive. 
C)  the worker might look for another job unless his employer pays him more. 
D)  All of the above are correct.

Question 10

Construction work is much riskier than working as a server at a restaurant. As a result, we'd expect a difference in wages between the two jobs. The difference is known as

Accepted Answer

A)  an efficiency wage. 
B)  a compensating differential. 
C)  a wage adjustment. 
D)  a minimum wage. 
A)  an efficiency wage. 
B)  a compensating differential. 
C)  a wage adjustment. 
D)  a minimum wage.

Question 11

In the signaling theory of education,

Accepted Answer

A)  discrimination does not affect wage differentials. 
B)  schooling makes workers more productive in the long-run. 
C)  schooling makes workers more productive in the short-run. 
D)  the worker signals to the employer that he is a valuable employee because he was willing to spend time to get an education. 
A)  discrimination does not affect wage differentials. 
B)  schooling makes workers more productive in the long-run. 
C)  schooling makes workers more productive in the short-run. 
D)  the worker signals to the employer that he is a valuable employee because he was willing to spend time to get an education.

Question 12

Which of the following is not considered human capital?

Accepted Answer

A)  the golf clubs a professional golfer uses to play golf 
B)  the skills a professional golfer has gained by practicing on the driving range 
C)  the professional golfer's knowledge of how to play a better game learned from talking with other players 
D)  none of the above would be considered human capital 
A)  the golf clubs a professional golfer uses to play golf 
B)  the skills a professional golfer has gained by practicing on the driving range 
C)  the professional golfer's knowledge of how to play a better game learned from talking with other players 
D)  none of the above would be considered human capital

Question 13

Figure 19-7  
-Refer to Figure 19-7. The figure shows labor demand and labor supply in a non-unionized labor market. If the current labor demand is D1 and the current labor supply is S1, when a minimum wage of $18 per hour is imposed in this market, how many unemployed workers result?

Accepted Answer

The answer of Figure 19-7  
-Refer to Figure 19-7....

Question 14

The human-capital theory explanation for why people invest in education has been challenged by a theory that suggests

Accepted Answer

A)  schooling acts only as a signal of ability. 
B)  humans cannot be considered "capital." 
C)  productivity is not linked to wages. 
D)  ability, effort, and chance matter more. 
A)  schooling acts only as a signal of ability. 
B)  humans cannot be considered "capital." 
C)  productivity is not linked to wages. 
D)  ability, effort, and chance matter more.

Question 15

Marcia is a white 23-year-old female, and Joan is a black 23-year-old female. Both Marcia and Joan were economics majors, and they graduated from the same college in the same year with the same GPA. Marcia and Joan both got identical jobs at a brokerage firm after graduating from college. They both work equally hard. Marcia earns $38,000 a year, and Joan earns $30,000 a year. Select the best explanation for this wage difference.

Accepted Answer

A)  Marcia has less human capital than Joan. 
B)  Marcia receives a compensating wage differential that Joan does not. 
C)  Joan has been discriminated against because she is black. 
D)  Marcia has been discriminated against because she is white. 
A)  Marcia has less human capital than Joan. 
B)  Marcia receives a compensating wage differential that Joan does not. 
C)  Joan has been discriminated against because she is black. 
D)  Marcia has been discriminated against because she is white.

Question 16

A study using data from the late 1960s showed that black baseball players earned less than comparable white players. Studies of more recent salaries in baseball, however, have found no evidence of discriminatory wage differentials.

Accepted Answer

A) True 
 B)False

Question 17

Scenario 19-3
In the small town of Hamilton, Montana, there is a local hardware store called Eddy's Hardware. There are only two types of workers who apply for jobs at Eddy's Hardware: cowboys and farm boys. Local politicians have received numerous complaints that Eddy's Hardware is practicing wage discrimination against farm boys. Eddy's Hardware denies the complaint and says the store is only trying to maximize profit.
-Refer to Scenario 19-3. Which of the following statements would strengthen the discrimination complaint against Eddy's Hardware?

Accepted Answer

A)  Cowboys call in sick to work more often than farm boys. 
B)  Farm boys are more likely than cowboys to work the day shift rather than the night shift. 
C)  Cowboys' experience using hardware generally exceeds farm boys' experience using it. 
D)  On average farm boys have less experience working at the hardware store than cowboys. 
A)  Cowboys call in sick to work more often than farm boys. 
B)  Farm boys are more likely than cowboys to work the day shift rather than the night shift. 
C)  Cowboys' experience using hardware generally exceeds farm boys' experience using it. 
D)  On average farm boys have less experience working at the hardware store than cowboys.

Question 18

Compensating differentials are differences in wages related to the characteristics of a job.

Accepted Answer

A) True 
 B)False

Question 19

When comparing average wages for male and female workers in the United States, wages paid to females have been about 40 percent less than those paid to male workers.

Accepted Answer

A) True 
 B)False

Question 20

Suppose that Philip is the best contractor in town, and he makes $400,000 a year. Suppose that Julia Roberts is the best and highest paid actress in Hollywood, and she makes $13 million per movie. Both are the best in their respective fields of work. One reason for the significant difference in incomes has to do with the nature of the service each offers. Philip's contracting services

Accepted Answer

A)  can be provided to an unlimited number of customers in a year, but Julia's work is sold to only a few individuals in a year. 
B)  can only be provided to a limited number of customers in a year, but Julia's work is sold to millions of individuals in a year - i.e., to anyone who has the willingness and ability to pay for admission to her movies. 
C)  can be provided to a unlimited number of customers in a year, and Julia's work is sold to millions of individuals in a year - i.e., to anyone who has the willingness and ability to pay for admission to her movies. 
D)  can only be provided to a limited number of customers in a year, and Julia's work is sold to only a few individuals in a year. 
A)  can be provided to an unlimited number of customers in a year, but Julia's work is sold to only a few individuals in a year. 
B)  can only be provided to a limited number of customers in a year, but Julia's work is sold to millions of individuals in a year - i.e., to anyone who has the willingness and ability to pay for admission to her movies. 
C)  can be provided to a unlimited number of customers in a year, and Julia's work is sold to millions of individuals in a year - i.e., to anyone who has the willingness and ability to pay for admission to her movies. 
D)  can only be provided to a limited number of customers in a year, and Julia's work is sold to only a few individuals in a year.

Exam 19: Earnings and Discrimination

Superstars arise in markets in which every customer in the market is able to enjoy the good supplied by the

Bob, the manager and owner of a small company, believes in the theory of efficiency wages. As such, Bob would be most likely to agree with which of the following quotes?

Evidence of differences in the average wages of black workers compared to white workers

The competition experiment conducted by economists Muriel Niederle and Lise Vesterlund was consistent with the results of Terry Odean which were that

If the signaling theory of education is correct,

List the productivity factors that may explain the differences in pay between men and women in similar occupations. Do any of these factors arise as a result of cultural or social traditions? If so, describe how changes in social relationships will affect the pay gap over time.

Figure 19-5 -Refer to Figure 19-5. Given demand for labor, D1, and supply of labor, S2, which of the following could be considered an efficiency wage?

Figure 19-6 -Refer to Figure 19-6. Given demand, D1, and supply, S1, how many workers are unemployed if a minimum wage of $8 per hour is imposed on this market?

After an employer pays the cost of educating a worker,

Construction work is much riskier than working as a server at a restaurant. As a result, we'd expect a difference in wages between the two jobs. The difference is known as

In the signaling theory of education,

Which of the following is not considered human capital?

Figure 19-7 -Refer to Figure 19-7. The figure shows labor demand and labor supply in a non-unionized labor market. If the current labor demand is D1 and the current labor supply is S1, when a minimum wage of $18 per hour is imposed in this market, how many unemployed workers result?

The human-capital theory explanation for why people invest in education has been challenged by a theory that suggests

A study using data from the late 1960s showed that black baseball players earned less than comparable white players. Studies of more recent salaries in baseball, however, have found no evidence of discriminatory wage differentials.

Compensating differentials are differences in wages related to the characteristics of a job.

When comparing average wages for male and female workers in the United States, wages paid to females have been about 40 percent less than those paid to male workers.

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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