Question 1

Which of the following is not true about specific training?

Accepted Answer

A)   The wage is constant for both the incumbent firm and the spot market firm.
B)   The initial wage of an individual has no relationship to the costs of training.
C)   In the early stages of his career,a worker earns his MRP.
D)   Late in her career,a worker still earns his MRP.
E)   The training causes the MRP of the worker to increase for only the incumbent firm. D

Question 2

Specific 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. B

Question 3

Fewer women are taking time off to raise their children.What does this imply about their labor market activities?

Accepted Answer

A)   Women will acquire less on-the-job training and earn less over their lifetime.
B)   Women will acquire less on-the-job training and earn more their lifetime.
C)   Women will acquire less on-the-job training and earn the same earnings over their lifetime.
D)   Women will acquire more on-the-job training and earn less over their lifetime.
E)   Women will acquire more on-the-job training and earn more over their lifetime. E

Question 4

In a model with turnover,when a worker quits the value of specific training is lost.This could be avoided if

Accepted Answer

A)   the firm pays for all training costs.
B)   the firm forces the worker to always receive the same wage.
C)   the firm refuses to pay for any type of training other than general training.
D)   the firm pays the worker more in the second period.
E)   the firm pays the worker less in the second period.

Question 5

Learning by doing

Accepted Answer

A)   requires a worker to take a course.
B)   occurs over informal conversations.
C)   is only applicable to one specific type of job.
D)   is always general training.
E)   may be obtained as a by-product of the production process.

Question 6

A worker's wage increases over the course of her career for which type of training?

Accepted Answer

A)   formal
B)   informal
C)   general
D)   specific
E)   on-site

Question 7

If training is efficient,then it will be carried out and pay for investments.

Accepted Answer

A)   workers,specific
B)   workers,general
C)   firms,formal
D)   firms,informal
E)   firms,general

Question 8

Suppose a worker receives firm specific training,but his wages do not increase afterward.Why?

Accepted Answer

A)   Specific training has no value to the firm.
B)   Specific training does not increase the worker's productivity.
C)   Specific training does not increase the leverage a worker can use to raise his wage.
D)   Specific training is inefficient.
E)   The worker receives the benefit by the employer paying for the costs of training.

Question 9

Which of the following is an example of general training?

Accepted Answer

A)   A worker takes a course on how to use Excel,a commonly used program.
B)   A mechanical engineer takes an advanced graduate course in engineering.
C)   Two workers have a discussion about how to best use a new machine in the office.
D)   An accounting student studies for the CPA.
E)   A college student interested in medicine volunteers at a hospital.

Question 10

Which of the following is an example of learning-by-doing?

Accepted Answer

A)   An individual who wants to become an account studies for the CPA exam.
B)   A parent helps a child with his math homework.
C)   A student takes an engineering course in order to obtain an engineering degree.
D)   A prelaw student obtains a summer internship at a law firm and learns how to write a brief.
E)   An adult goes to the doctor to make sure she is ready to work after surgery.

Question 11

Which of the following is an example of informal training?

Accepted Answer

A)   A worker chooses to take a course at a local community college.
B)   An employer requires all workers to take an on-line course.
C)   Over lunch,a senior employee explains a difficult concept to a new worker.
D)   Through experience,a worker learns a more efficient way to do his job.
E)   The supervisor schedules a meeting with a worker to discuss better ways to perform a job.

Question 12

For training,a worker's starting wage depends on the costs of training.For training,a worker's wage does not depend on the costs of training.

Accepted Answer

A)   general,specific
B)   general,general
C)   specific,general
D)   specific,specific
E)   informal,formal

Question 13

If the training is firm specific,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.

Question 14

For training,workers receive their MRPs during the early stages of their careers,but for training,they receive less than their MRPs during the latter stages.

Accepted Answer

A)   general,specific
B)   general,general
C)   specific,general
D)   specific,specific
E)   informal,formal

Question 15

An individual's age-earnings profile decreases over his lifetime.Which of the following would explain this phenomenon?

Accepted Answer

A)   On-the-job training stops completely after the first few years of work.
B)   On-the-job training declines over an individual's career.
C)   Firms discriminate against older workers and pay them less since they are closer to retirement.
D)   The human capital he acquires over all those years of employment decreases his productivity.
E)   Workers cut back on hours to spend more time at home.

Question 16

Suppose a worker can earn $25,000.He obtains specific training,raising his value by $10,000.If the worker can negotiate after the training,which of the following may be his wage?

Accepted Answer

A)   $15,000
B)   $20,000
C)   $25,000
D)   $30,000
E)   $40,000

Question 17

The cost sharing arrangement is when:

Accepted Answer

A)   a worker initially pays for training and then receives higher wages.
B)   a firm initially pays for training and then the worker receives higher wages.
C)   a worker initially pays for training and then receives lower wages.
D)   a firm initially pays for training and then the worker receives lower wages.
E)   firms cover the entire costs of training and a worker receives his MRP.

Question 18

The hold up problem arises

Accepted Answer

A)   if firms invest in specific capital and so have incurred a sunk cost which is vulnerable to expropriation.
B)   if firms invest in general capital and so have incurred a sunk cost which is vulnerable to expropriation.
C)   if firms invest in specific capital and so workers have an incentive to leave the firm and waste the investment.
D)   if firms invest in general capital and so workers have an incentive to leave the firm and waste the investment.
E)   if specific investments made by the firm will create inefficiencies.

Question 19

Formal training is training that

Accepted Answer

A)   raises a worker's productivity at all firms.
B)   is only useful at one firm.
C)   is only useful for one industry.
D)   is planned,such as a training seminar.
E)   is gained through information conversations.

Question 20

Which type of investment results in a steep age-earnings profile?

Accepted Answer

A)   on-the-job training
B)   formal training
C)   informal training
D)   general training
E)   specific training

Exam 6: On-The-Job Training