Question 1

Which of the following is NOT an example of job-market signaling?

Accepted Answer

A)  educational investments 
B)  reference letters 
C)  career building 
D)  extra-curricular activities 
E)  volunteer work 
A)  educational investments 
B)  reference letters 
C)  career building 
D)  extra-curricular activities 
E)  volunteer work B

Question 2

In a screening model,______ carefully design(s)______ to exploit the strengths of some groups and the weaknesses of others.

Accepted Answer

A)  employers;job packages 
B)  the government;labor market legislation 
C)  workers;job packages 
D)  workers;educational attainment 
E)  the government;job packages 
A)  employers;job packages 
B)  the government;labor market legislation 
C)  workers;job packages 
D)  workers;educational attainment 
E)  the government;job packages A

Question 3

If worker ability differs along a single dimension,their earnings are usually:

Accepted Answer

A)  unrelated to ability. 
B)  homogeneous. 
C)  heterogeneous. 
D)  proportional to their ability-unadjusted productivities. 
E)  proportional to their ability-adjusted productivities. 
A)  unrelated to ability. 
B)  homogeneous. 
C)  heterogeneous. 
D)  proportional to their ability-unadjusted productivities. 
E)  proportional to their ability-adjusted productivities. D

Question 4

Michael Spence posits that high-ability workers are able to choose just the right amount of education to signal that they are high-ability because:

Accepted Answer

A)  high-ability workers find it less costly to acquire education than low-ability workers. 
B)  high-ability workers have greater productivity gains from education than low-ability workers. 
C)  employers value education in and of itself. 
D)  high-ability workers enjoy school more than low-ability workers. 
E)  low-ability workers value leisure more than high-ability workers. 
A)  high-ability workers find it less costly to acquire education than low-ability workers. 
B)  high-ability workers have greater productivity gains from education than low-ability workers. 
C)  employers value education in and of itself. 
D)  high-ability workers enjoy school more than low-ability workers. 
E)  low-ability workers value leisure more than high-ability workers.

Question 5

In a situation where workers have more information about their own talents than do employers,workers cannot simply announce their relative abilities because:

Accepted Answer

A)  both high- and low-ability workers have an incentive to announce they are high ability. 
B)  firms are incapable of screening workers. 
C)  workers cannot signal. 
D)  signaling is costly. 
E)  announcing these abilities is costly. 
A)  both high- and low-ability workers have an incentive to announce they are high ability. 
B)  firms are incapable of screening workers. 
C)  workers cannot signal. 
D)  signaling is costly. 
E)  announcing these abilities is costly.

Question 6

Which of the following is an example of asymmetric information in which workers know their own abilities but firms do not?

Accepted Answer

A)  a seasoned athlete 
B)  an established actor 
C)  a recent college graduate 
D)  an assistant professor 
E)  a high school student 
A)  a seasoned athlete 
B)  an established actor 
C)  a recent college graduate 
D)  an assistant professor 
E)  a high school student

Question 7

Suppose a competitive labor market is populated by equal numbers of high-ability (H)and low-ability (L)workers.Each high-ability worker produces output valued at $100 and each low-ability worker produces output valued at $20.In terms of time for their effort,it costs $60 for high-ability students to acquire a college degree while it costs low-ability students $75 to acquire a college degree.High-ability students ______ acquire a college degree and will be paid ______.

Accepted Answer

A)  will not;$60 
B)  will not;$100 
C)  will;$60 
D)  will;$100 
E)  will;$10 
A)  will not;$60 
B)  will not;$100 
C)  will;$60 
D)  will;$100 
E)  will;$10

Question 8

Which of the following is NOT an example of a screening mechanism?

Accepted Answer

A)  reference letters 
B)  résumés 
C)  candidate testing 
D)  educational investments 
E)  interviews 
A)  reference letters 
B)  résumés 
C)  candidate testing 
D)  educational investments 
E)  interviews

Question 9

Assume that there are two types of workers: safe and risky.At the beginning of the first period a firm must decide to hire a safe or risky worker.Safe workers have constant ability worth $200 per period.There is a 50 percent chance a risky worker will have ability worth $300 per period and a 50 percent chance a risky worker will have ability worth $100 per period.What is the risky worker's average productivity?

Accepted Answer

A)  $100 
B)  $200 
C)  $300 
D)  $400 
E)  $500 
A)  $100 
B)  $200 
C)  $300 
D)  $400 
E)  $500

Question 10

Which of the following is an example of a situation in which each worker's ability is public information and is observed by workers and firms?

Accepted Answer

A)  a seasoned athlete 
B)  a young soccer player 
C)  a recent college graduate 
D)  an assistant professor 
E)  a high school student 
A)  a seasoned athlete 
B)  a young soccer player 
C)  a recent college graduate 
D)  an assistant professor 
E)  a high school student

Question 11

In screening models ______ act first,while in signaling ______ models act first.

Accepted Answer

A)  firms;workers 
B)  firms;the government 
C)  workers;the government 
D)  workers;firms 
E)  workers;workers 
A)  firms;workers 
B)  firms;the government 
C)  workers;the government 
D)  workers;firms 
E)  workers;workers

Question 12

Which of the following is suggested by the risky worker hypothesis?

Accepted Answer

A)  Risky workers have worse option values than safe workers. 
B)  Firms minimize downside risk by terminating employment contracts. 
C)  The worst outcome for a firm is earning small positive profits. 
D)  The firm breaks even if the safe worker is a diamond in the rough. 
E)  Workers have higher expected value in this model than in the efficiency wage model. 
A)  Risky workers have worse option values than safe workers. 
B)  Firms minimize downside risk by terminating employment contracts. 
C)  The worst outcome for a firm is earning small positive profits. 
D)  The firm breaks even if the safe worker is a diamond in the rough. 
E)  Workers have higher expected value in this model than in the efficiency wage model.

Question 13

Which of the following is suggested by the person-specific information theory?

Accepted Answer

A)  Workers' earnings should be unrelated to experience. 
B)  Safe workers have constant productivity. 
C)  Workers' abilities are increasing in output. 
D)  Workers' productivities are constant over time. 
E)  Over time,workers will be assigned to more productive tasks within the firm. 
A)  Workers' earnings should be unrelated to experience. 
B)  Safe workers have constant productivity. 
C)  Workers' abilities are increasing in output. 
D)  Workers' productivities are constant over time. 
E)  Over time,workers will be assigned to more productive tasks within the firm.

Question 14

Under the Roy model,workers' heterogeneous abilities are:

Accepted Answer

A)  known by both workers and firms. 
B)  known only by workers. 
C)  known only by firms. 
D)  unknown by both workers and firms. 
E)  sometimes known by workers and always known by firms. 
A)  known by both workers and firms. 
B)  known only by workers. 
C)  known only by firms. 
D)  unknown by both workers and firms. 
E)  sometimes known by workers and always known by firms.

Question 15

Suppose a competitive labor market is populated by equal numbers of high-ability (H)and low-ability (L)workers.Each high-ability worker produces output valued at $100 and each low-ability worker produces output valued at $20.Without job market signaling,the equilibrium wage will be:

Accepted Answer

A)  $20. 
B)  $40. 
C)  $50. 
D)  $60. 
E)  $100. 
A)  $20. 
B)  $40. 
C)  $50. 
D)  $60. 
E)  $100.

Question 16

Assume that there are two types of workers: safe and risky.At the beginning of the first period a firm must decide to hire a safe or risky worker.Safe workers have constant ability worth $200 per period.There is a 50 percent chance a risky worker will have ability worth $300 per period and a 50 percent chance a risky worker will have ability worth $100 per period.What is the risky worker's average productivity?

Accepted Answer

A)  $100 
B)  $200 
C)  $300 
D)  $400 
E)  $500 
A)  $100 
B)  $200 
C)  $300 
D)  $400 
E)  $500

Question 17

Which of the following is NOT a true statement about the screening model?

Accepted Answer

A)  Screening is conducted by employers. 
B)  Screening induces workers to reveal private information. 
C)  Screening is used to judge workers' abilities. 
D)  Screening takes place before workers enter the labor market. 
E)  Screening exploits the strengths of some groups and the weaknesses of others. 
A)  Screening is conducted by employers. 
B)  Screening induces workers to reveal private information. 
C)  Screening is used to judge workers' abilities. 
D)  Screening takes place before workers enter the labor market. 
E)  Screening exploits the strengths of some groups and the weaknesses of others.

Question 18

Assume that there are two types of workers: safe and risky.At the beginning of the first period a firm must decide to hire a safe or risky worker.Safe workers have constant ability worth $200 per period.There is a 50 percent chance a risky worker will have ability worth $300 per period and a 50 percent chance a risky worker will have ability worth $100 per period.Safe workers can be hired for a per-period wage of $190 and risky workers can be hired for a per-period wage of $210.What are the firm's profits if it hires a safe worker?

Accepted Answer

A)  $5 
B)  $10 
C)  $20 
D)  $30 
E)  $50 
A)  $5 
B)  $10 
C)  $20 
D)  $30 
E)  $50

Question 19

Under the Roy model,each worker self-selects into a job on the basis of ______ and ______.

Accepted Answer

A)  comparative advantage;the prevailing prices in the market 
B)  single-dimension ability;the prevailing prices in the market 
C)  his bundle of skills;ability-unadjusted productivity 
D)  comparative advantage;ability-unadjusted productivity 
E)  single-dimension ability;his comparative advantage 
A)  comparative advantage;the prevailing prices in the market 
B)  single-dimension ability;the prevailing prices in the market 
C)  his bundle of skills;ability-unadjusted productivity 
D)  comparative advantage;ability-unadjusted productivity 
E)  single-dimension ability;his comparative advantage

Question 20

Suppose a competitive labor market is populated by 75% high-ability (H)workers and 25% low-ability (L)workers.Each high-ability worker produces output valued at $100 and each low-ability worker produces output valued at $20.Without job market signaling,the equilibrium wage will be:

Accepted Answer

A)  $20. 
B)  $40. 
C)  $50. 
D)  $60. 
E)  $100. 
A)  $20. 
B)  $40. 
C)  $50. 
D)  $60. 
E)  $100.

Which of the following is NOT an example of job-market signaling?

In a screening model, carefully design(s) to exploit the strengths of some groups and the weaknesses of others.

If worker ability differs along a single dimension,their earnings are usually:

Michael Spence posits that high-ability workers are able to choose just the right amount of education to signal that they are high-ability because:

In a situation where workers have more information about their own talents than do employers,workers cannot simply announce their relative abilities because:

Which of the following is an example of asymmetric information in which workers know their own abilities but firms do not?

Which of the following is NOT an example of a screening mechanism?

Which of the following is an example of a situation in which each worker's ability is public information and is observed by workers and firms?

In screening models act first,while in signaling models act first.

Which of the following is suggested by the risky worker hypothesis?

Which of the following is suggested by the person-specific information theory?

Under the Roy model,workers' heterogeneous abilities are:

Suppose a competitive labor market is populated by equal numbers of high-ability (H)and low-ability (L)workers.Each high-ability worker produces output valued at $100 and each low-ability worker produces output valued at $20.Without job market signaling,the equilibrium wage will be:

Which of the following is NOT a true statement about the screening model?

Under the Roy model,each worker self-selects into a job on the basis of and .

Suppose a competitive labor market is populated by 75% high-ability (H)workers and 25% low-ability (L)workers.Each high-ability worker produces output valued at $100 and each low-ability worker produces output valued at $20.Without job market signaling,the equilibrium wage will be:

Introduction

The Uslabor Market

The Short Run Demand for Labor

The Supply of Labor

Human Capital

On-The-Job Training

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

Incentives

Tasks,technologies,and Organizational Design

Careers and the Employment Relation

The Long Run Demand for Labor and Adjustment Costs

Filters

Exam 13: The Hiring Process

Which of the following is NOT an example of job-market signaling?

In a screening model,______ carefully design(s)______ to exploit the strengths of some groups and the weaknesses of others.

If worker ability differs along a single dimension,their earnings are usually:

Michael Spence posits that high-ability workers are able to choose just the right amount of education to signal that they are high-ability because:

In a situation where workers have more information about their own talents than do employers,workers cannot simply announce their relative abilities because:

Which of the following is an example of asymmetric information in which workers know their own abilities but firms do not?

Which of the following is NOT an example of a screening mechanism?

Which of the following is an example of a situation in which each worker's ability is public information and is observed by workers and firms?

In screening models ______ act first,while in signaling ______ models act first.

Which of the following is suggested by the risky worker hypothesis?

Which of the following is suggested by the person-specific information theory?

Under the Roy model,workers' heterogeneous abilities are:

Suppose a competitive labor market is populated by equal numbers of high-ability (H)and low-ability (L)workers.Each high-ability worker produces output valued at $100 and each low-ability worker produces output valued at $20.Without job market signaling,the equilibrium wage will be:

Which of the following is NOT a true statement about the screening model?

Under the Roy model,each worker self-selects into a job on the basis of ______ and ______.

Suppose a competitive labor market is populated by 75% high-ability (H)workers and 25% low-ability (L)workers.Each high-ability worker produces output valued at $100 and each low-ability worker produces output valued at $20.Without job market signaling,the equilibrium wage will be:

Introduction

The Uslabor Market

The Short Run Demand for Labor

The Supply of Labor

Human Capital

On-The-Job Training

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

Incentives

Tasks,technologies,and Organizational Design

Careers and the Employment Relation

The Long Run Demand for Labor and Adjustment Costs

Filters

In a screening model, carefully design(s) to exploit the strengths of some groups and the weaknesses of others.

In screening models act first,while in signaling models act first.

Under the Roy model,each worker self-selects into a job on the basis of and .