Question 1

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers offer two main hypotheses:

Accepted Answer

A)   One hypothesis emphasizes education,and the other emphasizes random influences.
B)   One hypothesis emphasizes education,and the other emphasizes supply and demand.
C)   One hypothesis emphasizes international trade,and the other emphasizes technology.
D)   One hypothesis emphasizes signaling,and the other emphasizes education.E) All of the above
F) A) and B)

Question 2

The theory of efficiency wages challenges the assumption that

Accepted Answer

A)   workers are efficient.
B)   workers have an incentive to shirk their responsibilities to their employers.
C)   wages adjust to balance labor supply and labor demand.
D)   firms sometimes choose to pay their workers above-equilibrium wages.E) B) and C)
F) B) and D)

Question 3

Some economists are skeptical of the argument that employers are responsible for discriminatory wage differences.They argue that market economies provide a natural remedy to employer discrimination,and that remedy is

Accepted Answer

A)   social responsibility.
B)   the profit motive.
C)   fear of reprisal from groups that suffer from those wage differences.
D)   fear of reprisal from government in the form of prosecution.E) C) and D)
F) B) and C)

Question 4

The most popular movie stars have high incomes for a number of reasons.One such reason is

Accepted Answer

A)   an ability for almost everyone to enjoy movies at a relatively low cost.
B)   the above-average intellect of the average movie star.
C)   a compensating differential.
D)   a lack of technological advances in the movie industry.E) C) and D)
F) A) and B)

Question 5

Suppose that a college student receives an offer for a summer internship with a stock brokerage firm.Unfortunately for the student,the internship is unpaid.Is it ever economically beneficial to accept an unpaid job?

Accepted Answer

A)   Yes,because the experience gained during the internship would increase the student's human capital.
B)   No,because the opportunity cost is too high.
C)   No,because the student is signaling to future employers that he or she is willing to accept low wages.
D)   Yes,because accepting an unpaid job signals to future employers that the student has stable personal finances.E) A) and B)
F) C) and D)

Question 6

Which of the following factors does not affect the value of a worker's marginal product?

Accepted Answer

A)   Discrimination against a particular group of workers by a firm's customers.
B)   A worker's level of disposable income.
C)   A worker's level of human capital.
D)   Compensating wage differentials.E) C) and D)
F) A) and B)

Question 7

Which of the following factors does not affect the value of a worker's marginal product?

Accepted Answer

A)   Discrimination against a particular group of workers by a firm's customers.
B)   A worker's level of disposable income.
C)   A worker's level of human capital.
D)   Compensating wage differentials.E) All of the above
F) A) and B)

Question 8

Discrimination is an emotionally charged issue that is impossible to study objectively.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements is not correct?

Accepted Answer

A)   Both the human capital theory and the signaling theory of education could explain why college graduates earn more than high school graduates.
B)   The signaling theory of education suggests that the ability to complete a college degree is correlated with the ability to perform well in the labor market.
C)   If the human capital theory of education is correct,a government policy that pays for additional schooling for all workers would not increase wages.
D)   If the signaling theory of education is correct,a government policy that pays for additional schooling for all workers would not increase wages.E) None of the above
F) B) and C)

Question 10

The theory of efficiency wages asserts that

Accepted Answer

A)   unions are often successful in forcing employers to pay higher wages.
B)   employers strive to hold wages below equilibrium levels.
C)   employers may find it profitable to pay above-equilibrium wages.
D)   efficient workers actually earn lower wages than those earned by inefficient workers.E) None of the above
F) C) and D)

Question 11

Which of the following statements is not correct?

Accepted Answer

A)   Some firms pay wages that are above the equilibrium wage.
B)   Workers sometimes form labor unions to push their wages up.
C)   Wages never deviate from the balance of supply and demand in the market for labor.
D)   The federal government mandates that employers pay their workers at least as much as the minimum wage.E) A) and B)
F) All of the above

Question 12

Philip is an average contractor in town,and he earns $40,000 a year.Billy is the best contractor in town,and he earns $480,000 a year.Philip's contracting services

Accepted Answer

A)   are valued more by the market relative to Billy's and that explains why his income is higher than Billy's.
B)   are valued less by the market relative to Billy's and that explains why his income is higher than Billy's.
C)   are valued less by the market relative to Billy's and that explains why his income is lower than Billy's.
D)   are more expensive because he receives a compensating differential.E) A) and D)
F) A) and C)

Question 13

Discrimination occurs when the marketplace offers different opportunities to similar individuals who differ only by

Accepted Answer

A)   race.
B)   level of education.
C)   attitudes toward risk.
D)   attitude toward the tradeoff between labor and leisure.E) C) and D)
F) All of the above

Question 14

Which of the following is an economic explanation for the "beauty premium"?

Accepted Answer

A)   Employers pay very attractive women less than average-looking women because they believe them to be less intelligent.
B)   Employers pay above-average-looking men more than above-average-looking women.
C)   Employers pay above-average-looking women more than average-looking women because customers prefer to deal with better-looking women.
D)   Employers pay above-average-looking men more because they signal to the market that they are willing to spend more money on personal grooming,a sign of wealth and stability.E) A) and D)
F) B) and C)

Question 15

Evidence from a study of the market for baseball players using 1960s data

Accepted Answer

A)   indicated that sports with strong player associations are unlikely to experience wage discrimination.
B)   suggested that government regulation had eliminated most evidence of wage discrimination.
C)   found some evidence of consumer-driven wage discrimination.
D)   found that measurement of marginal productivity was very difficult for baseball players.E) B) and D)
F) B) and C)

Question 16

Evaluate the following statement: "The gender pay gap provides evidence of widespread,severe,ongoing discrimination by employers and fellow workers."

Accepted Answer

There are many explanations of the gende...

Question 17

A natural correction to employer discrimination in market economies is the

Accepted Answer

A)   threat of judicial review.
B)   profit motive.
C)   political process.
D)   union movement.E) B) and D)
F) None of the above

Question 18

The job of night watchman at the Punxsutawny Phil Groundhog museum is known to have a high wage.This can be partially explained by the fact that the job is likely to

Accepted Answer

A)   require specialized skills.
B)   be difficult.
C)   be incredibly dull.
D)   have minimal risk of injury.E) All of the above
F) A) and B)

Question 19

Profit-maximizing,competitive firms will not discriminate in the hiring of workers unless consumers exercise a preference for discrimination in product markets or governments mandate discrimination.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following statements is true of wages,educational attainment,and gender?

Accepted Answer

A)   Male workers are compensated for attending college,while female workers generally are not.
B)   Female workers are compensated for attending college,while male workers generally are not.
C)   Both genders receive a higher wage for attending college.
D)   Neither gender receives a higher wage for attending college.E) A) and D)
F) A) and C)

Exam 19: Earnings and Discrimination

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

Suppose that a college student receives an offer for a summer internship with a stock brokerage firm.Unfortunately for the student,the internship is unpaid.Is it ever economically beneficial to accept an unpaid job?

Correct AnswerverifiedShow Answer

Evidence from a study of the market for baseball players using 1960s data

Correct AnswerverifiedShow Answer

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers offer two main hypotheses:

Correct AnswerverifiedShow Answer

Discrimination occurs when the marketplace offers different opportunities to similar individuals who differ only by

Correct AnswerverifiedShow Answer

Discrimination is an emotionally charged issue that is impossible to study objectively.

Correct AnswerverifiedShow Answer

Profit-maximizing,competitive firms will not discriminate in the hiring of workers unless consumers exercise a preference for discrimination in product markets or governments mandate discrimination.

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

Philip is an average contractor in town,and he earns $40,000 a year.Billy is the best contractor in town,and he earns $480,000 a year.Philip's contracting services

Correct AnswerverifiedShow Answer

The theory of efficiency wages asserts that

Correct AnswerverifiedShow Answer

Some economists are skeptical of the argument that employers are responsible for discriminatory wage differences.They argue that market economies provide a natural remedy to employer discrimination,and that remedy is

Correct AnswerverifiedShow Answer

Which of the following is an economic explanation for the "beauty premium"?

Correct AnswerverifiedShow Answer

A natural correction to employer discrimination in market economies is the

Correct AnswerverifiedShow Answer

Which of the following factors does not affect the value of a worker's marginal product?

Correct AnswerverifiedShow Answer

Evaluate the following statement: "The gender pay gap provides evidence of widespread,severe,ongoing discrimination by employers and fellow workers."

Correct AnswerverifiedThere are many explanations of the gende...View AnswerShow Answer

Which of the following factors does not affect the value of a worker's marginal product?

Correct AnswerverifiedShow Answer

The theory of efficiency wages challenges the assumption that

Correct AnswerverifiedShow Answer

The most popular movie stars have high incomes for a number of reasons.One such reason is

Correct AnswerverifiedShow Answer

The job of night watchman at the Punxsutawny Phil Groundhog museum is known to have a high wage.This can be partially explained by the fact that the job is likely to

Correct AnswerverifiedShow Answer

Which of the following statements is true of wages,educational attainment,and gender?

Correct AnswerverifiedShow Answer

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There are many explanations of the gende...
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