Question 1

What is the hold up problem?

Accepted Answer

A)  The ability of a worker to negotiate a wage increase causes deadweight loss. 
B)  Sunk investments in firm specific training are vulnerable to exploitation by workers. 
C)  Sunk investments in general training are vulnerable to exploitation by firms. 
D)  Workers do not spend enough obtaining general human capital. 
E)  Firms overinvest in firm specific human capital. 
A)  The ability of a worker to negotiate a wage increase causes deadweight loss. 
B)  Sunk investments in firm specific training are vulnerable to exploitation by workers. 
C)  Sunk investments in general training are vulnerable to exploitation by firms. 
D)  Workers do not spend enough obtaining general human capital. 
E)  Firms overinvest in firm specific human capital.

Question 2

If there are turnover costs,for specific training

Accepted Answer

A)  the firm will bear the full cost of the training. 
B)  the worker will bear the full cost of the training. 
C)  the worker receives less than his MRP early in his career. 
D)  wages decrease based on the costs of the investment. 
E)  the wage will be higher in order to avoid turnover of the workers. 
A)  the firm will bear the full cost of the training. 
B)  the worker will bear the full cost of the training. 
C)  the worker receives less than his MRP early in his career. 
D)  wages decrease based on the costs of the investment. 
E)  the wage will be higher in order to avoid turnover of the workers.

Question 3

Students in high school are generally paid the minimum wage.What is one explanation for this?

Accepted Answer

A)  Employers discriminate against young workers. 
B)  High school students are lazy. 
C)  Individuals who work while in high school have a very low MRP. 
D)  High school students have high turnover rates,so firms invest less in their training. 
E)  Young individuals are not qualified to effectively negotiate their wages. 
A)  Employers discriminate against young workers. 
B)  High school students are lazy. 
C)  Individuals who work while in high school have a very low MRP. 
D)  High school students have high turnover rates,so firms invest less in their training. 
E)  Young individuals are not qualified to effectively negotiate their wages.

Question 4

If the training is general,who will pay for the training?

Accepted Answer

A)  The individual will pay the full $60. 
B)  The firm will pay the full $60. 
C)  The firm will pay $40 and the individual will pay $20. 
D)  The firm will pay $20 and the individual will pay $40. 
E)  The individual will not receive training because the costs are greater than the benefits. 
A)  The individual will pay the full $60. 
B)  The firm will pay the full $60. 
C)  The firm will pay $40 and the individual will pay $20. 
D)  The firm will pay $20 and the individual will pay $40. 
E)  The individual will not receive training because the costs are greater than the benefits.

Question 5

Suppose labor is perfectly competitive and there are only two periods.For which values of the interest rate,r,costs of training,i,and value added by training,V,is the training opportunity inefficient?

Accepted Answer

A)  i = $50,V = $150,r = 10% 
B)  i = $40,V = $100,r = 10% 
C)  i = $60,V = $125,r = 5% 
D)  i = $90,V = $125,r = 5% 
E)  i = $90,V = $100,r = 15% 
A)  i = $50,V = $150,r = 10% 
B)  i = $40,V = $100,r = 10% 
C)  i = $60,V = $125,r = 5% 
D)  i = $90,V = $125,r = 5% 
E)  i = $90,V = $100,r = 15%

Question 6

General training is:

Accepted Answer

A)  training that raises a worker's productivity at all firms. 
B)  training that is only useful for one firm. 
C)  training that always occurs on site. 
D)  training that is always planned and off site. 
E)  training that is always gained through information conversations. 
A)  training that raises a worker's productivity at all firms. 
B)  training that is only useful for one firm. 
C)  training that always occurs on site. 
D)  training that is always planned and off site. 
E)  training that is always gained through information conversations.

Question 7

Which of the following is an industry-specific skill?

Accepted Answer

A)  Carl takes a course on using Microsoft Office,a commonly used operating system. 
B)  Sam trains Craig on how to use a new machine in the factory. 
C)  Mike obtains an engineering degree to become an engineer. 
D)  Kara talks with her boss about the possible uses of a new word processor. 
E)  Shelly exercises to stay healthy. 
A)  Carl takes a course on using Microsoft Office,a commonly used operating system. 
B)  Sam trains Craig on how to use a new machine in the factory. 
C)  Mike obtains an engineering degree to become an engineer. 
D)  Kara talks with her boss about the possible uses of a new word processor. 
E)  Shelly exercises to stay healthy.

Question 8

If there is turnover in the market,

Accepted Answer

A)  a firm will pay the full cost of specific training. 
B)  a worker will pay the full cost of specific training. 
C)  a worker and firm will share the costs of specific training. 
D)  a firm will pay the full cost of general training. 
E)  a worker will pay the full cost of general training. 
A)  a firm will pay the full cost of specific training. 
B)  a worker will pay the full cost of specific training. 
C)  a worker and firm will share the costs of specific training. 
D)  a firm will pay the full cost of general training. 
E)  a worker will pay the full cost of general training.

Question 9

Which of the following is not true about general training?

Accepted Answer

A)  The greater the costs of training,the lower the initial wage. 
B)  Training causes the worker's MRP to increase equally for the incumbent firm,as well as spot market firms. 
C)  The worker always receives his MRP. 
D)  For the first few years,workers are paid less than their MRP. 
E)  After training is complete,the workers receive their MRP. 
A)  The greater the costs of training,the lower the initial wage. 
B)  Training causes the worker's MRP to increase equally for the incumbent firm,as well as spot market firms. 
C)  The worker always receives his MRP. 
D)  For the first few years,workers are paid less than their MRP. 
E)  After training is complete,the workers receive their MRP.

Question 10

What problem does turnover create for firm specific training?

Accepted Answer

A)  Human capital is destroyed if the worker quits the firm. 
B)  The worker pays more for human capital than is efficient. 
C)  The workers are underpaid to correct a market inefficiency. 
D)  Firms underinvest in human capital. 
E)  Turnover does not cause a problem because of contracts. 
A)  Human capital is destroyed if the worker quits the firm. 
B)  The worker pays more for human capital than is efficient. 
C)  The workers are underpaid to correct a market inefficiency. 
D)  Firms underinvest in human capital. 
E)  Turnover does not cause a problem because of contracts.

What is the hold up problem?

If there are turnover costs,for specific training

Students in high school are generally paid the minimum wage.What is one explanation for this?

If the training is general,who will pay for the training?

Suppose labor is perfectly competitive and there are only two periods.For which values of the interest rate,r,costs of training,i,and value added by training,V,is the training opportunity inefficient?

General training is:

Which of the following is an industry-specific skill?

If there is turnover in the market,

Which of the following is not true about general training?

What problem does turnover create for firm specific training?

Introduction

The Uslabor Market

The Short Run Demand for Labor

The Supply of Labor

Human Capital

Competitive Equilibrium

Policy Application: the Minimum Wage

Policy Application: the War on Poverty

Death and Injury in the Usworkplace-A Hedonic Analysis

Discrimination I: Theory

Discrimination Ii: Evidence and Policy

The Hiring Process

Incentives

Tasks,technologies,and Organizational Design

Careers and the Employment Relation

The Long Run Demand for Labor and Adjustment Costs

Filters

Exam 6: On-The-Job Training

What is the hold up problem?

If there are turnover costs,for specific training

Students in high school are generally paid the minimum wage.What is one explanation for this?

If the training is general,who will pay for the training?

Suppose labor is perfectly competitive and there are only two periods.For which values of the interest rate,r,costs of training,i,and value added by training,V,is the training opportunity inefficient?

General training is:

Which of the following is an industry-specific skill?

If there is turnover in the market,

Which of the following is not true about general training?

What problem does turnover create for firm specific training?

Introduction

The Uslabor Market

The Short Run Demand for Labor

The Supply of Labor

Human Capital

Competitive Equilibrium

Policy Application: the Minimum Wage

Policy Application: the War on Poverty

Death and Injury in the Usworkplace-A Hedonic Analysis

Discrimination I: Theory

Discrimination Ii: Evidence and Policy

The Hiring Process

Incentives

Tasks,technologies,and Organizational Design

Careers and the Employment Relation

The Long Run Demand for Labor and Adjustment Costs

Filters