Question 1

Economic theory suggests that the standard of living of American workers would rise if

Accepted Answer

A)  the minimum wage were doubled. 
B)  the knowledge and skills of workers improved. 
C)  older workers were forced to retire earlier, opening up jobs for younger workers. 
D)  technological setbacks lowered output per worker hour, increasing the number of jobs.

Question 2

Working conditions, prestige, variety, location, employee freedom, and employee responsibilities are all examples of

Accepted Answer

A)  the tools of employment discrimination. 
B)  sociological factors affecting employment. 
C)  pecuniary job characteristics. 
D)  non-pecuniary job characteristics.

Question 3

Given the amount of time and other costs of investing in human capital that it takes to earn a Ph.D., why are college professors paid less than other occupations that require similar or lesser amounts of human capital?

Accepted Answer

The answer of Given the amount of time and other...

Question 4

Which of the following is true about earnings and productivity?

Accepted Answer

A)  When workers are more productive, the demand for their services will be higher. 
B)  In order to earn a large income, one must provide large benefits to others. 
C)  High productivity (a large output per hour worked) is the key to high earnings for both individuals and countries. 
D)  All of the above are true.

Question 5

The fact that wage differentials continue to exist across different groups of workers leads economists to believe that

Accepted Answer

A)  discrimination by customers is the most common type of economic discrimination. 
B)  differences in human capital and job characteristics must be important in explaining the differences in wages. 
C)  firms apparently are not profit maximizers. 
D)  the market has failed to properly allocate wages to different workers.

Question 6

Which of the following is the clearest evidence of employment discrimination against minority employees?

Accepted Answer

A)  The average wages of minority workers are lower than the average wages of whites. 
B)  The average wages of minority employees are lower than the average wages of whites with similar productivity characteristics. 
C)  The mean number of years of schooling of minority workers is lower than that of whites. 
D)  The average hours worked by minority employees exceeds the hours worked by whites.

Question 7

Economic theory suggests that the standard of living of American workers would rise if

Accepted Answer

A)  technological change increased output per worker. 
B)  the minimum wage were doubled. 
C)  automation were outlawed. 
D)  a larger proportion of the labor force was unionized.

Question 8

Which of the following is true about millionaires?

Accepted Answer

A)  The majority of millionaires received most of their wealth through an inheritance. 
B)  The percentage of the population that are millionaires in inflation-adjusted dollars has been stable since the 1970s. 
C)  About one-third of millionaires have college degrees. 
D)  More than 75 percent of American millionaires have college degrees.

Question 9

Millionaires tend to be older than the general population because

Accepted Answer

A)  older workers generally have more education than younger workers. 
B)  many achieve millionaire status by saving from a relatively modest income, and this will take a lengthy period of time. 
C)  the earnings of most people peak during the retirement phase of life. 
D)  older people have less to do, and therefore, they have more time to come up with innovative ideas.

Question 10

Economic models suggest that movie stars have salaries that

Accepted Answer

A)  greatly exceed their marginal contribution to the movie studio's revenue. 
B)  understate their full contribution to the movie studio's revenue-as the celebrities are the main reason that people go to see movies. 
C)  are about equal to their marginal revenue products. 
D)  can only be explained by looking at specific movie stars and their individual salaries.

Question 11

If carpentry positions A and B required identical skill levels, other things constant, which one of the following would most likely increase the wage rate of position A relative to position B?

Accepted Answer

A)  The work place of position A is in the intense heat of the sun, whereas the work place of B is air-conditioned. 
B)  Position A is a safe office job; position B requires the employee to operate a dangerous saw. 
C)  Position A offers steady employment, whereas employees holding position B are often laid off. 
D)  Position A offers more sick leave and more paid holidays.

Question 12

Ethyl does not like redheads and refuses to hire any at her business. Paul was the perfect job candidate on paper, but the personal interview revealed that he was a redhead. Are there any costs to Ethyl for not hiring Paul?

Accepted Answer

The answer of Ethyl does not like redheads and refuses...

Question 13

The earnings of all employees in a competitive economy would be equal if

Accepted Answer

A)  all individuals were homogeneous. 
B)  all jobs were equally attractive. 
C)  workers were perfectly mobile among jobs. 
D)  all of the above are true.

Question 14

Which of the following is most likely to increase the market wage rate in a job category?

Accepted Answer

A)  The employer provides a generous pension plan. 
B)  The work is widely viewed as safe and not stressful. 
C)  The job is widely viewed as interesting and prestigious. 
D)  The job requires employees to move from city to city quite often.

Question 15

Everything else equal, wages are likely to be higher when

Accepted Answer

A)  the location of the job is more desirable. 
B)  the work environment is more prestigious. 
C)  more skill is required to perform well on the job. 
D)  the work is safer.

Question 16

Economic theory suggests that the standard of living of American workers would rise if

Accepted Answer

A)  the minimum wage were doubled. 
B)  the knowledge and skills of workers improved. 
C)  older workers were forced to retire earlier, opening up jobs for younger workers. 
D)  people bought only American products.

Question 17

The major determinant of an individual's income is

Accepted Answer

A)  whether or not his family is wealthy. 
B)  his personality-if the coworkers and the boss like him. 
C)  how productive he is combined with demand for what he produces. 
D)  if he earns a salary or if he is paid by the hour.

Question 18

Happyland is a country devoted to consumption. The inhabitants spend all of their income on pleasurable things and virtually none on capital investment, human or otherwise. Seriousland is frugal, spending very little on consumption and a great deal on human and physical capital. Ten years from now, which country would you prefer to inhabit?

Accepted Answer

The answer of Happyland is a country devoted to consumption....

Question 19

When comparisons are made between the earnings of whites and minorities with the same age, quantity of schooling, marital status, sector of employment, union and industry status, regional location, and annual hours worked, recent studies indicate that

Accepted Answer

A)  the corrected earnings of minority men are about two-thirds the earnings of white men. 
B)  earnings differentials between whites and minorities are due almost exclusively to employment discrimination. 
C)  the corrected earnings of Mexican-Americans, Asian-Americans, and American Indians were between 7 and 9 percent less than the earnings of similar white men. 
D)  most minority men now have higher earnings than white men.

Question 20

Assume that empirical evidence shows a difference in mean earnings between two groups, say, majority and minority workers. What conclusion may be drawn?

Accepted Answer

A)  The group with the lower earnings is being discriminated against. 
B)  The group with the lower earnings is less productive. 
C)  The group with the lower earnings has less human capital. 
D)  Any of the above statements could, either partially or entirely, explain this difference.

Exam 13: Earnings, Productivity, and the Job Market

Economic theory suggests that the standard of living of American workers would rise if

Working conditions, prestige, variety, location, employee freedom, and employee responsibilities are all examples of

Given the amount of time and other costs of investing in human capital that it takes to earn a Ph.D., why are college professors paid less than other occupations that require similar or lesser amounts of human capital?

Which of the following is true about earnings and productivity?

The fact that wage differentials continue to exist across different groups of workers leads economists to believe that

Which of the following is the clearest evidence of employment discrimination against minority employees?

Economic theory suggests that the standard of living of American workers would rise if

Which of the following is true about millionaires?

Millionaires tend to be older than the general population because

Economic models suggest that movie stars have salaries that

If carpentry positions A and B required identical skill levels, other things constant, which one of the following would most likely increase the wage rate of position A relative to position B?

Ethyl does not like redheads and refuses to hire any at her business. Paul was the perfect job candidate on paper, but the personal interview revealed that he was a redhead. Are there any costs to Ethyl for not hiring Paul?

The earnings of all employees in a competitive economy would be equal if

Which of the following is most likely to increase the market wage rate in a job category?

Everything else equal, wages are likely to be higher when

Economic theory suggests that the standard of living of American workers would rise if

The major determinant of an individual's income is

When comparisons are made between the earnings of whites and minorities with the same age, quantity of schooling, marital status, sector of employment, union and industry status, regional location, and annual hours worked, recent studies indicate that

Assume that empirical evidence shows a difference in mean earnings between two groups, say, majority and minority workers. What conclusion may be drawn?