Question 1

Which of the following could explain the changing gap in income between unskilled and skilled workers in the United States?

Accepted Answer

A)   International trade has decreased the domestic demand for skilled labor and increased the domestic demand for unskilled labor.
B)   Certain technological changes such as the introduction of computers have increased the domestic demand for skilled labor and decreased the domestic demand for unskilled labor.
C)   Both a and b are correct.
D)   Neither a nor b is correct.E) A) and C)
F) B) and C)

Question 2

According to the signaling theory of education,

Accepted Answer

A)   schooling sends signals to employers in much the same way that advertising sends signals to consumers.
B)   a person becomes more productive by earning a college degree.
C)   education is less important than natural ability.
D)   All of the above are correct.E) A) and D)
F) A) and C)

Question 3

According to economists Hamermesh and Biddle, how much more do people who are deemed more attractive than average earn?

Accepted Answer

The answer of According to economists Hamermesh and Biddle, how...

Question 4

Human capital is

Accepted Answer

A)   a stock of equipment and structures.
B)   the result of investments workers make in themselves such as on-the-job training.
C)   a difference in wages that arises to offset the nonmonetary characteristics of different jobs.
D)   inversely related to the supply of workers.E) A) and D)
F) All of the above B

Question 5

A prestigious private high school requires each of its teachers to have a Ph.D. in the subject they teach. This requirement is likely to

Accepted Answer

A)   increase the supply of teachers to this school.
B)   increase wages for teachers at the private school relative to those at public schools.
C)   decrease the marginal product of teachers at the private school.
D)   All of the above are correct.E) A) and B)
F) All of the above

Question 6

When an employer pays the cost of educating a worker, it is likely that the employer

Accepted Answer

A)   is demonstrating altruistic motives.
B)   is pursuing some objective other than profit-maximization.
C)   hopes to recapture his investment in the form of increased labor productivity.
D)   receives reimbursement from the government for the cost of the education.E) A) and D)
F) All of the above

Question 7

In order to explain the changing gap in earnings between skilled and unskilled workers in recent years, economists have proposed two hypotheses. One hypothesis emphasizes

Accepted Answer

A)   compensating differentials.
B)   the increased recognition that a larger stock of human capital usually leads to higher earnings.
C)   the decreasing importance of labor unions.
D)   the increasing importance of international trade.E) None of the above
F) A) and C)

Question 8

A compensating differential is a difference in wages due to higher levels of education or other forms of human capital.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is an example of labor-market discrimination? You may assume that worker A and worker B have identical characteristics except for the ones listed. A firm offers a higher salary to worker A than worker B because worker A

Accepted Answer

A)   has more education.
B)   is willing to work the night shift.
C)   is a man, whereas worker B is a woman.
D)   has better performance reviews, indicating higher productivity.E) B) and C)
F) C) and D)

Question 10

Scenario 19-5
Jason works part-time at a grocery store after school. Jason has worked at the store for two years but still hasn't received a wage increase, even though newer employees have received raises. Jason has threatened his employer with a lawsuit if he doesn't get a raise in the next few weeks. Jason believes he is a victim of labor-market discrimination.
-Refer to Scenario 19-5. In a competitive market for grocery store employees, why might Jason's wage differential persist?

Accepted Answer

A)   Jason works harder than the other employees.
B)   Jason may choose to do tasks other workers find undesirable.
C)   Jason's amiable personality allows him to work well with his co­workers.
D)   None of the above is correct.E) A) and C)
F) None of the above

Question 11

In determining wages, ability, effort, and chance

Accepted Answer

A)   probably play no role whatsoever.
B)   play a role, but their importance is hard to gauge since ability, effort, and chance are hard to measure.
C)   play a role, and that role is fully captured in easy-to-measure factors such as human capital and age.
D)   play a role, and it is fully explained within the context of compensating differentials.E) B) and C)
F) All of the above

Question 12

Al and Steve are both reporters at the same newspaper. Al is black and Steve is white. Al earns less than Steve. Which of the following can explain why Al earns less?

Accepted Answer

A)   Although both have BA's in Journalism, Al's K­12 and college education were of a lower quality than Steve's.
B)   Al has greater experience.
C)   Al works the night shift and Steve works the day shift.
D)   Al writes editorials which are very popular with customers, while Steve covers the police report which fewer subscribers read.E) A) and D)
F) A) and C) A

Question 13

Scenario 19-3
In the small town of Hamilton, Montana, there is a local hardware store called Eddy's Hardware. There are only two types of workers who apply for jobs at Eddy's Hardware: cowboys and farm boys. Local politicians have received numerous complaints that Eddy's Hardware is practicing wage discrimination against farm boys. Eddy's Hardware denies the complaint and says the store is only trying to maximize profit.
-Refer to Scenario 19-3. Which of the following statements would weaken the discrimination complaint against Eddy's Hardware?

Accepted Answer

A)   Farm boys are more productive than cowboys.
B)   Farm boys work longer hours than cowboys and their effort is greater.
C)   Farm boys are generally less educated than cowboys in the field of hardware.
D)   All of the above would weaken the discrimination complaint.E) B) and C)
F) All of the above

Question 14

When the supply of workers is plentiful, one would predict that market wages would be

Accepted Answer

A)   determined outside the domain of economic theory.
B)   determined solely by factors that affect demand.
C)   low, other things equal.
D)   high, other things equal.E) None of the above
F) B) and D) C

Question 15

When discrimination occurs as a result of employer prejudice, discriminating firms do not maximize profits.

Accepted Answer

A) True 
 B)False

Question 16

Economists who study labor markets have discovered that

Accepted Answer

A)   only about 5 percent of wage differences are related to chance.
B)   ability is not difficult to measure but is largely insignificant in explaining wage differences.
C)   work effort is difficult to measure but is not likely to contribute much to an explanation of wage differences.
D)   ability, effort, and chance are likely to be significant contributors to wage differences.E) A) and B)
F) B) and C)

Question 17

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.E) A) and B)
F) C) and D)

Question 18

Human capital is

Accepted Answer

A)   a stock of equipment and structures.
B)   the result of investments workers make in themselves such as education.
C)   a difference in wages that arises to offset the nonmonetary characteristics of different jobs.
D)   a characteristic that affects a worker's self­esteem but not her wages.E) All of the above
F) None of the above

Question 19

Which of the following is an example of customer discrimination?

Accepted Answer

A)   European soccer players earn more than U.S. soccer players since soccer is more popular in Europe.
B)   Male basketball players in the NBA earn higher salaries than female basketball players in the WNBA since viewers prefer watching NBA games.
C)   Golfers on the men's PGA tour earn more than golfers on the women's LPGA tour since people prefer watching the men play golf.
D)   All of the above are examples of customer discrimination.E) B) and D)
F) None of the above

Question 20

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

garbage co...

Exam 19: Earnings and Discrimination

Which of the following could explain the changing gap in income between unskilled and skilled workers in the United States?

Correct Answer
verified

According to the signaling theory of education,

Correct Answer
verified

According to economists Hamermesh and Biddle, how much more do people who are deemed more attractive than average earn?

Correct Answer
verified

Human capital is

Correct Answer
verified
B

A prestigious private high school requires each of its teachers to have a Ph.D. in the subject they teach. This requirement is likely to

Correct Answer
verified

When an employer pays the cost of educating a worker, it is likely that the employer

Correct Answer
verified

In order to explain the changing gap in earnings between skilled and unskilled workers in recent years, economists have proposed two hypotheses. One hypothesis emphasizes

Correct Answer
verified

A compensating differential is a difference in wages due to higher levels of education or other forms of human capital.

Correct Answer
verified

Which of the following is an example of labor-market discrimination? You may assume that worker A and worker B have identical characteristics except for the ones listed. A firm offers a higher salary to worker A than worker B because worker A

Correct Answer
verified

Correct Answer
verified

In determining wages, ability, effort, and chance

Correct Answer
verified

Al and Steve are both reporters at the same newspaper. Al is black and Steve is white. Al earns less than Steve. Which of the following can explain why Al earns less?

Correct Answer
verified
A

Correct Answer
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When the supply of workers is plentiful, one would predict that market wages would be

Correct Answer
verified
C

When discrimination occurs as a result of employer prejudice, discriminating firms do not maximize profits.

Correct Answer
verified

Economists who study labor markets have discovered that

Correct Answer
verified

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

Correct Answer
verified

Human capital is

Correct Answer
verified

Which of the following is an example of customer discrimination?

Correct Answer
verified

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?

Correct Answer
verified
garbage co...
View Answer

Exam 19: Earnings and Discrimination

Which of the following could explain the changing gap in income between unskilled and skilled workers in the United States?

Correct AnswerverifiedShow Answer

According to the signaling theory of education,

Correct AnswerverifiedShow Answer

According to economists Hamermesh and Biddle, how much more do people who are deemed more attractive than average earn?

Correct AnswerverifiedShow Answer

Human capital is

Correct AnswerverifiedB

A prestigious private high school requires each of its teachers to have a Ph.D. in the subject they teach. This requirement is likely to

Correct AnswerverifiedShow Answer

When an employer pays the cost of educating a worker, it is likely that the employer

Correct AnswerverifiedShow Answer

In order to explain the changing gap in earnings between skilled and unskilled workers in recent years, economists have proposed two hypotheses. One hypothesis emphasizes

Correct AnswerverifiedShow Answer

A compensating differential is a difference in wages due to higher levels of education or other forms of human capital.

Correct AnswerverifiedShow Answer

Which of the following is an example of labor-market discrimination? You may assume that worker A and worker B have identical characteristics except for the ones listed. A firm offers a higher salary to worker A than worker B because worker A

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In determining wages, ability, effort, and chance

Correct AnswerverifiedShow Answer

Al and Steve are both reporters at the same newspaper. Al is black and Steve is white. Al earns less than Steve. Which of the following can explain why Al earns less?

Correct AnswerverifiedA

Correct AnswerverifiedShow Answer

When the supply of workers is plentiful, one would predict that market wages would be

Correct AnswerverifiedC

When discrimination occurs as a result of employer prejudice, discriminating firms do not maximize profits.

Correct AnswerverifiedShow Answer

Economists who study labor markets have discovered that

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Human capital is

Correct AnswerverifiedShow Answer

Which of the following is an example of customer discrimination?

Correct AnswerverifiedShow Answer

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?

Correct Answerverifiedgarbage co...View AnswerShow Answer

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B

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A

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C

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garbage co...
View Answer