Question 1

Which of the following examples best describes the signaling theory of education?

Accepted Answer

A)  The hiring manager offers a job to a recent college graduate because she is more beautiful than the rest of the applicants. 
B)  The hiring manager offers a job to a recent college graduate because she is expected to be more productive than other applicants due to her educational attainment. 
C)  The hiring manager offers a job to a recent college graduate because the hiring manager has a bias toward people with college degrees. 
D)  The hiring manager offers a job to a recent college graduate because education is correlated with natural ability.

Question 2

Consider two groups of workers of equal skill level and experience: those who collect garbage and those who stuff envelopes with campaign fliers. Which group is likely to be paid more and why?

Accepted Answer

The answer of Consider two groups of workers of equal...

Question 3

Some discriminatory hiring practices can be expected, even if markets are competitive, as a result of

Accepted Answer

A)  unrestricted entry and exit in markets. 
B)  lower costs of hiring. 
C)  a perfectly elastic market demand. 
D)  customer preferences.

Question 4

In discussing discrimination and the wage differences that exist between men and women and between blacks and whites, it has been said that "the disease is political even if the symptom is economic." What does this mean?

Accepted Answer

A)  Wage differences persist because the political system has failed to enact laws to equalize wages among all groups. 
B)  Wage differences exist because of past discrimination on the part of political bodies such as city councils and school boards. 
C)  Wage differences exist because of the differences in the political views of the different groups. 
D)  Wage differences exist because the political system is biased against paying compensating differentials.

Question 5

Since measurable factors such as years of experience and years of education explain less than half of the variation in wages, ability, effort, and chance must play a significant role in determining wages.

Accepted Answer

A) True 
 B)False

Question 6

Figure 19-2 
-Refer to Figure 19-2. This figure depicts labor demand and supply in a nonunionized labor market. If the minimum wage were $7.50, employment in this market would be

Accepted Answer

A)  400 
B)  500 
C)  600 
D)  700

Question 7

Studies of discrimination in baseball suggest that black players

Accepted Answer

A)  suffered from discriminatory wage differentials several decades ago and those wage differentials persist today. 
B)  suffered from discriminatory wage differentials several decades ago but those wage differentials have been eliminated. 
C)  did not suffer from discriminatory wage differentials several decades ago but in recent years wage differentials have become evident. 
D)  did not suffer from discriminatory wage differentials in the past and they do not suffer from wage differentials today.

Question 8

Job A is hard, dull, and dangerous. Job B is easy, fun, and safe. All else equal, we would expect Job A to pay

Accepted Answer

A)  higher wages than Job B because the labor supplied for Job B will be greater. 
B)  lower wages than Job B because the labor supplied for Job B will be greater. 
C)  higher wages than Job B because the labor supplied for Job A will be greater. 
D)  lower wages than Job B because the labor supplied for Job A will be greater.

Question 9

The return to investment in human capital is observed

Accepted Answer

A)  only when workers are assigned identical tasks. 
B)  in the wage differential between workers. 
C)  in the high school dropout rate in inner-city urban school districts. 
D)  in the low wages of educated factory workers.

Question 10

Figure 19-2 
-Refer to Figure 19-2. This figure depicts labor demand and supply in a nonunionized labor market. The original equilibrium wage is $10. If a labor union subsequently establishes a union shop and negotiates an hourly wage of $12.50, then there will be an excess

Accepted Answer

A)  demand of 100 workers. 
B)  demand of 300 workers. 
C)  supply of 100 workers. 
D)  supply of 300 workers.

Question 11

In the experiment conducted by economists Muriel Niederle and Lise Vesterlund

Accepted Answer

A)  men were better at adding than women. 
B)  women chose the tournament payoff scheme more than men. 
C)  men thought they won the four-player tournament part of the experiment more often than women thought they won the four-player tournament. 
D)  the researchers demonstrated that women face significant wage discrimination in stock brokerages.

Question 12

Which term do economists use to refer to a difference in wages that arises from nonmonetary characteristics of different jobs?

Accepted Answer

A)  non-pecuniary differentials 
B)  compensating differentials 
C)  fundamental differences 
D)  idiosyncratic differences

Question 13

Increases in international trade and technological change have been offered as explanations for the

Accepted Answer

A)  increase in demand for both skilled and unskilled workers in the United States. 
B)  increase in demand for skilled workers and decrease in demand for unskilled workers in the United States. 
C)  decrease in demand for skilled workers and increase in demand for skilled workers in the United States. 
D)  decrease in demand for both skilled and unskilled workers.

Question 14

Callie has just graduated from Hairs-R-Us Beauty School with a license to cut hair. She can earn $15 an hour styling hair at the local hair salon or $20 an hour styling hair at the local funeral home. The higher wage offered by the funeral home is an example of

Accepted Answer

A)  a human capital differential. 
B)  a compensating differential. 
C)  signaling theory. 
D)  the superstar phenomenon.

Question 15

If, as some economists believe, changes in technology over recent decades have brought about changes in labor markets, then those changes likely have resulted in

Accepted Answer

A)  reduced emphasis on compensating differentials as an explanation for wage differences. 
B)  a reduced emphasis on human-capital differences among workers as an explanation for wage differences. 
C)  a narrowing of the earnings gap between high-skilled workers and low-skilled workers. 
D)  a widening of the earnings gap between high-skilled workers and low-skilled workers.

Question 16

A union's major source of power is its

Accepted Answer

A)  high-profile leadership. 
B)  ability to increase productivity. 
C)  ability to threaten a strike. 
D)  ability to deny employers the opportunity to bargain over wages.

Question 17

Figure 19-6 
-Refer to Figure 19-6. Given demand, D1, and supply, S2, how many fewer people are employed if a minimum wage of $8 per hour is imposed on this market as compared to allowing wages to adjust to balance labor demand and labor supply?

Accepted Answer

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

Question 18

On average professors of finance earn more than professors of economics. Other things the same, what does this imply about the supply of each type of professor?

Accepted Answer

The answer of On average professors of finance earn more...

Question 19

Other things equal, one would predict that market wages would be relatively high when

Accepted Answer

A)  the supply of labor is high. 
B)  the demand for labor is low. 
C)  the supply of labor is low. 
D)  Both (a.) and (b.) are correct

Question 20

Efficiency wages will raise the quantity of labor supplied to the market.

Accepted Answer