Question 1

One reason why better-looking workers may have higher earnings is that physical attractiveness is correlated with intelligence.

Accepted Answer

A) True 
 B)False

Question 2

In recent years,the amount of international trade in which the United States engages has increased.Which of the following accurately describes the effect(s) on labor demanded by firms in the United States?

Accepted Answer

A)   The demand for both skilled and unskilled labor has increased.
B)   The demand for both skilled and unskilled labor has decreased.
C)   The demand for skilled labor relative to unskilled labor has risen.
D)   The demand for unskilled labor relative to skilled labor has risen.E) B) and C)
F) A) and D)

Question 3

Most wage differences can be understood while maintaining the assumption of equilibrium in the labor market.We deviate from that assumption,however,when we consider

Accepted Answer

A)   the superstar phenomenon.
B)   the theory of efficiency wages.
C)   compensating differentials.
D)   differences in educational attainment.E) B) and D)
F) B) and C)

Question 4

Efficiency wages decrease employee turnover.

Accepted Answer

A) True 
 B)False

Question 5

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.E) None of the above
F) B) and D)

Question 6

Figure 19-1 
-Refer to Figure 19-1.What is the loss associated with wages moving from $8 to $10?

Accepted Answer

A)   2 million jobs.
B)   6 million jobs.
C)   8 million jobs.
D)   14 million jobs.E) B) and D)
F) A) and C)

Question 7

The signaling theory of education maintains that workers who complete specific levels of education enhance their productivity through education.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is not a consequence of above-equilibrium wages in a labor market?

Accepted Answer

A)   a surplus of labor
B)   unemployment
C)   more unionized jobs
D)   All of the above are consequences of above-equilibrium wages.E) B) and C)
F) A) and B)

Question 9

Which of the following statements is correct?

Accepted Answer

A)   Compensating wage differentials reflect different skills of workers.
B)   Discrimination by employers affects the marginal productivity of workers.
C)   The signaling theory of education suggests that schooling does not affect worker productivity.
D)   The superstar phenomenon explains why more talented entertainers earn more than less talented entertainers.E) C) and D)
F) A) and B)

Question 10

Which of the following statements is correct?

Accepted Answer

A)   Since the 1940s,the number of American workers employed in the manufacturing sector has declined from 30 percent to 10 percent.
B)   Since 1910,the number of Americans working as farmers has increased from 3 percent to 33 percent.
C)   Since 1995,global industrial output has fallen by more than 30 percent.
D)   Productivity decreases are one reason for the declining number of manufacturing jobs.E) A) and D)
F) B) and C)

Question 11

In the United States,the earnings gap between workers with college degrees and workers with high school degrees

Accepted Answer

A)   has never been documented by reliable evidence.
B)   is evident,but it has remained roughly constant over the past 20 years.
C)   is evident,but it has diminished over the last 20 years.
D)   is evident,and it has widened over the last 20 years.E) A) and D)
F) B) and C)

Question 12

The Asian Development Bank has been investing in education and training programs in the developing economies of Asia over the last five years.As a result of this investment,economists who adhere to the human capital view of education would predict

Accepted Answer

A)   rising wages as labor productivity is enhanced.
B)   falling wages as the labor market is saturated with too many educated workers.
C)   the marginal productivity of capital would not be affected.
D)   the marginal productivity of labor would not be affected.E) B) and D)
F) A) and B)

Question 13

If there is systematic discrimination against a group of workers,then the wage paid to those workers likely will be

Accepted Answer

A)   lower due to a higher supply of workers in that group.
B)   lower due to a lower demand for workers in that group.
C)   higher due to a lower supply of workers in that group.
D)   higher due to a higher demand for workers in that group.E) A) and D)
F) B) and C)

Question 14

The belief that education makes a person more productive and thereby raises his or her wage is referred to as the

Accepted Answer

A)   compensating-differential view of education.
B)   natural-ability view of education.
C)   unmeasured-variables view of education.
D)   human-capital view of education.E) B) and D)
F) A) and B)

Question 15

Karen is a black 21-year-old female,and Jessica is a black 41-year-old female.Both Karen and Jessica are accounting majors,and they graduated from the same college with the same GPA - Karen in 2008 and Jessica in 1988.Karen and Jessica are both financial advisers at the same mutual fund firm.Karen earns $45,000 a year,and Jessica earns $90,000 a year.Select the best explanation for this wage difference.

Accepted Answer

A)   Karen has more human capital than Jessica.
B)   Karen has less human capital than Jessica.
C)   Karen has been discriminated against because she is young.
D)   Jessica has been discriminated against because she is old.E) B) and C)
F) None of the above

Question 16

When differences in human capital among workers lead to discrimination,the differences are typically a result of social or political processes rather than economic processes.

Accepted Answer

A) True 
 B)False

Question 17

Jane and John are twins who attended grammar school through college together.Jane and John both got jobs at a brokerage firm after graduating from college with the same major.They both work equally hard.Jane earns $43,000 a year,and John earns $69,000 a year.Select the best explanation for this wage difference.

Accepted Answer

A)   Jane has less human capital than John.
B)   Jane has more human capital than John.
C)   John has been discriminated against because he is male.
D)   Jane has been discriminated against because she is female.E) A) and C)
F) None of the above

Question 18

The fact that movie star Julia Roberts' salary is much higher than the salary earned by a Nobel prize winning economics professor can best be explained by the

Accepted Answer

A)   failure of the market to reward talent fairly.
B)   fact that wage rates cannot reflect the influence of education properly.
C)   willingness of some people to accept a lower wage rate in order to do what they like most to do.
D)   superstar phenomenon.E) None of the above
F) B) and C)

Question 19

Scenario 19-1
Ferris B. ,a student at a community college,is considering what he should do for summer employment.Two recruiters show up at his school in search of summer workers.Recruiter A is looking for lifeguards to patrol the beach at an exclusive island resort in the Caribbean.Recruiter B is looking for workers to staff positions at a summer youth camp.
-Refer to Scenario 19-1.Ferris is carefully considering the options that each recruiter presents.On the basis of knowledge obtained in his economics class,Ferris concludes that

Accepted Answer

A)   wages are unlikely to be affected by job requirements.
B)   since the lifeguard job would expose him to a threat of skin cancer,the wage will be low.
C)   if the lifeguard job has a requirement for special training or certification,the wage offer will be higher than otherwise.
D)   if the lifeguard job also requires a willingness to clean public restrooms,the wage offer will be lower than otherwise.E) A) and B)
F) A) and C)

Question 20

Evidence of discrimination in labor markets

Accepted Answer

A)   applies only to race and gender.
B)   is conclusively identified in large differences in average wages rates between men and women.
C)   is difficult to verify by reference to differences in average wage rates.
D)   is more easily identified on the basis of race than gender.E) B) and D)
F) A) and B)

Exam 19: Earnings and Discrimination

Studies of discrimination in baseball suggest that black players

Correct Answer
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Correct Answer
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When differences in human capital among workers lead to discrimination,the differences are typically a result of social or political processes rather than economic processes.

Correct Answer
verified

If there is systematic discrimination against a group of workers,then the wage paid to those workers likely will be

Correct Answer
verified

In the United States,the earnings gap between workers with college degrees and workers with high school degrees

Correct Answer
verified

The Asian Development Bank has been investing in education and training programs in the developing economies of Asia over the last five years.As a result of this investment,economists who adhere to the human capital view of education would predict

Correct Answer
verified

Correct Answer
verified

Most wage differences can be understood while maintaining the assumption of equilibrium in the labor market.We deviate from that assumption,however,when we consider

Correct Answer
verified

The fact that movie star Julia Roberts' salary is much higher than the salary earned by a Nobel prize winning economics professor can best be explained by the

Correct Answer
verified

Which of the following is not a consequence of above-equilibrium wages in a labor market?

Correct Answer
verified

One reason why better-looking workers may have higher earnings is that physical attractiveness is correlated with intelligence.

Correct Answer
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Which of the following statements is correct?

Correct Answer
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Figure 19-1 -Refer to Figure 19-1.What is the loss associated with wages moving from $8 to $10?

Correct Answer
verified

Correct Answer
verified

In recent years,the amount of international trade in which the United States engages has increased.Which of the following accurately describes the effect(s) on labor demanded by firms in the United States?

Correct Answer
verified

The signaling theory of education maintains that workers who complete specific levels of education enhance their productivity through education.

Correct Answer
verified

The belief that education makes a person more productive and thereby raises his or her wage is referred to as the

Correct Answer
verified

Evidence of discrimination in labor markets

Correct Answer
verified

Efficiency wages decrease employee turnover.

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

Exam 19: Earnings and Discrimination

Studies of discrimination in baseball suggest that black players

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When differences in human capital among workers lead to discrimination,the differences are typically a result of social or political processes rather than economic processes.

Correct AnswerverifiedShow Answer

If there is systematic discrimination against a group of workers,then the wage paid to those workers likely will be

Correct AnswerverifiedShow Answer

In the United States,the earnings gap between workers with college degrees and workers with high school degrees

Correct AnswerverifiedShow Answer

The Asian Development Bank has been investing in education and training programs in the developing economies of Asia over the last five years.As a result of this investment,economists who adhere to the human capital view of education would predict

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Most wage differences can be understood while maintaining the assumption of equilibrium in the labor market.We deviate from that assumption,however,when we consider

Correct AnswerverifiedShow Answer

The fact that movie star Julia Roberts' salary is much higher than the salary earned by a Nobel prize winning economics professor can best be explained by the

Correct AnswerverifiedShow Answer

Which of the following is not a consequence of above-equilibrium wages in a labor market?

Correct AnswerverifiedShow Answer

One reason why better-looking workers may have higher earnings is that physical attractiveness is correlated with intelligence.

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Figure 19-1 -Refer to Figure 19-1.What is the loss associated with wages moving from $8 to $10?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In recent years,the amount of international trade in which the United States engages has increased.Which of the following accurately describes the effect(s) on labor demanded by firms in the United States?

Correct AnswerverifiedShow Answer

The signaling theory of education maintains that workers who complete specific levels of education enhance their productivity through education.

Correct AnswerverifiedShow Answer

The belief that education makes a person more productive and thereby raises his or her wage is referred to as the

Correct AnswerverifiedShow Answer

Evidence of discrimination in labor markets

Correct AnswerverifiedShow Answer

Efficiency wages decrease employee turnover.

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

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