Question 1

Table 19-2
  Source: US Census Bureau and Mankiw's calculations
-Refer to Table 19-2. What are two possible hypotheses to explain the changes in relative demand for high-skilled workers and low-skilled workers in recent years?

Accepted Answer

increased internatio...

Question 2

Nancy and Sheila are both loan officers who started working for their current employer during the same year, graduated from the same university with bachelors' degrees in economics, and achieved similar performance reviews. Nancy earned a master's degree last year. If Nancy earns a higher annual salary than Sheila because she has more formal education, the employer is

Accepted Answer

A)   basing pay on experience.
B)   paying efficiency wages.
C)   practicing discrimination.
D)   rewarding increases in human capital.E) C) and D)
F) B) and D)

Question 3

Adam and Bob are identical twins who attended grammar school through high school together. Adam got a job after high school, and Bob got a job after graduating from college. Adam earns $36,000 a year, and Bob earns $69,000 a year. Select the best explanation for this wage difference.

Accepted Answer

A)   Adam has less human capital than Bob.
B)   Bob has less human capital than Adam.
C)   Adam has received a compensating differential
D)   Adam is a member of a union.E) B) and C)
F) A) and C)

Question 4

In the early 20th century, streetcars in many southern cities required that white passengers sit in the front of the car while black passengers sat in the back. The firms that ran the streetcars were

Accepted Answer

A)   in favor of the segregation laws because they lowered costs and increased profits.
B)   against the segregation laws because they increased costs and lowered profits.
C)   lobbied local governments to enact such laws because their customers were willing to pay more for service in order to maintain the segregation.
D)   concerned about the effects of smoking. Since blacks smoked more than whites, they were supportive of the segregation laws.E) A) and B)
F) A) and C)

Question 5

One reason why better-looking workers may have higher earnings is that physical attractiveness may enhance a worker's productivity for certain jobs, especially for those workers who deal with the public.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following scenarios would serve to decrease the demand for unskilled labor in the U.S.?

Accepted Answer

A)   increased productivity gains among unskilled laborers
B)   increased demand for goods produced by unskilled laborers
C)   increased international trade with countries where unskilled labor is more plentiful
D)   increased supply of migrant workersE) None of the above
F) B) and C)

Question 7

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 8

The economic theory of labor markets suggests that wages are determined by labor supply and labor demand.

Accepted Answer

A) True 
 B)False

Question 9

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 correctE) None of the above
F) All of the above

Question 10

Which of the following moves the wage above its equilibrium value?

Accepted Answer

A)   both compensating differentials and efficiency wages
B)   compensating differentials but not efficiency wages
C)   efficiency wages but not compensating differentials
D)   neither compensating differentials nor efficiency wagesE) All of the above
F) None of the above

Question 11

As a result of an increase in the earnings gap between skilled and unskilled jobs, the incentive to get a college education has been declining.

Accepted Answer

A) True 
 B)False

Question 12

The theory of efficiency wages suggests that firms may pay above-equilibrium wages

Accepted Answer

A)   to reduce employee turnover.
B)   to prevent unions from recruiting members.
C)   to reduce the need for minimum wage laws.
D)   to increase the demand for better-skilled workers.E) None of the above
F) All of the above

Question 13

The primary economic explanation as to why a world-renowned architect cannot attain the "superstar" status that an athlete or actor can attain is that

Accepted Answer

A)   architects' services are not as highly valued by society as are the services of athletes and actors.
B)   only physically attractive people can become superstars, and it would be a coincidence if a highly talented architect were also physically attractive.
C)   government regulations place restrictions on the incomes of architects, but there are no such restrictions on the incomes of athletes or actors.
D)   it is impossible, currently, for an architect to supply his or her services at low cost to every customer.E) A) and B)
F) None of the above

Question 14

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. Which of the following statements would weaken Jason's case against his employer?

Accepted Answer

A)   Jason only works part-time; as a result, he has fewer hours of experience even though he has been with the company longer.
B)   Jason doesn't accomplish as much in an hour as other workers doing the same job.
C)   Other workers that got raises moved to the night shift or agreed to work weekends.
D)   All of the above statements would weaken Jason's case.E) A) and B)
F) None of the above

Question 15

Which of the following does not explain the "beauty premium" differences in wages?

Accepted Answer

A)   Better-looking people are preferred by customers; thus, employers will pay them higher wages than average- looking people.
B)   Beauty may be an indirect measure of other abilities that employers value.
C)   Average-looking people are preferred by customers; thus, employers will pay them higher wages than better- looking people.
D)   Employers discriminate in favor of better-looking people.E) A) and C)
F) A) and B)

Question 16

Scenario 19-4
Assume that the labor market for barbers is competitive and that it is differentiated into two groups: barbers who are bald (or going bald)  and those who have a full head of hair. Assume that the barbers in this market have identical hair-cutting ability, regardless of whether they are bald or not. Currently the equilibrium wage in the bald barber market is lower than that in the nonbald market. Further assume that the market for haircuts is competitive.
-Refer to Scenario 19-4. If consumers do not discriminate between bald barbers and barbers with hair, then

Accepted Answer

A)   all barbershops now earn a normal economic profit.
B)   competition will ensure the difference in wages will persist.
C)   barbershops that hire barbers with hair will be more profitable than those that don't.
D)   barbershops that hire bald barbers will be more profitable than those that don't.E) B) and C)
F) All of the above

Question 17

In a labor market free from discrimination, wages for workers that are employed by the same company will still differ.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following comparisons best illustrates a compensating differential?

Accepted Answer

A)   John's wage is higher than Jane's because the value of John's marginal product is higher than Jane's.
B)   Karl's wage is higher than Kay's because Karl is very personable, and Kay is very gruff.
C)   Beth's wage is higher than Bill's because Beth's job may cause long-term health problems, and Bill's job will not impair his health.
D)   All of the above are good illustrations of compensating differentials.E) None of the above
F) All of the above

Question 19

Name two occupations that have the two characteristics required for the superstar phenomenon.

Accepted Answer

The answer of Name two occupations that have the two...

Question 20

Economists who study labor markets have documented

Accepted Answer

A)   a general decline in the wages of college graduates over the last decade.
B)   an increasing trend in U.S. labor markets for employers to pay all costs of education and training.
C)   a decrease in the earnings gap between low-skill and high-skill workers over the past two decades.
D)   an increase in the earnings gap between low-skill and high-skill workers over the past two decades.E) A) and C)
F) A) and B)

Exam 19: Earnings and Discrimination

In the early 20th century, streetcars in many southern cities required that white passengers sit in the front of the car while black passengers sat in the back. The firms that ran the streetcars were

Correct Answer
verified

Which of the following moves the wage above its equilibrium value?

Correct Answer
verified

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

Correct Answer
verified
There are many explanations of the gende...
View Answer

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

Correct Answer
verified

The theory of efficiency wages suggests that firms may pay above-equilibrium wages

Correct Answer
verified

Economists who study labor markets have documented

Correct Answer
verified

The economic theory of labor markets suggests that wages are determined by labor supply and labor demand.

Correct Answer
verified

Correct Answer
verified

One reason why better-looking workers may have higher earnings is that physical attractiveness may enhance a worker's productivity for certain jobs, especially for those workers who deal with the public.

Correct Answer
verified

Which of the following scenarios would serve to decrease the demand for unskilled labor in the U.S.?

Correct Answer
verified

Adam and Bob are identical twins who attended grammar school through high school together. Adam got a job after high school, and Bob got a job after graduating from college. Adam earns $36,000 a year, and Bob earns $69,000 a year. Select the best explanation for this wage difference.

Correct Answer
verified

In a labor market free from discrimination, wages for workers that are employed by the same company will still differ.

Correct Answer
verified

As a result of an increase in the earnings gap between skilled and unskilled jobs, the incentive to get a college education has been declining.

Correct Answer
verified

Table 19-2 Source: US Census Bureau and Mankiw's calculations -Refer to Table 19-2. What are two possible hypotheses to explain the changes in relative demand for high-skilled workers and low-skilled workers in recent years?

Correct Answer
verified
increased internatio...
View Answer

Which of the following comparisons best illustrates a compensating differential?

Correct Answer
verified

The primary economic explanation as to why a world-renowned architect cannot attain the "superstar" status that an athlete or actor can attain is that

Correct Answer
verified

Name two occupations that have the two characteristics required for the superstar phenomenon.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Which of the following does not explain the "beauty premium" differences in wages?

Correct Answer
verified

Exam 19: Earnings and Discrimination

In the early 20th century, streetcars in many southern cities required that white passengers sit in the front of the car while black passengers sat in the back. The firms that ran the streetcars were

Correct AnswerverifiedShow Answer

Which of the following moves the wage above its equilibrium value?

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

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

Correct AnswerverifiedShow Answer

The theory of efficiency wages suggests that firms may pay above-equilibrium wages

Correct AnswerverifiedShow Answer

Economists who study labor markets have documented

Correct AnswerverifiedShow Answer

The economic theory of labor markets suggests that wages are determined by labor supply and labor demand.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

One reason why better-looking workers may have higher earnings is that physical attractiveness may enhance a worker's productivity for certain jobs, especially for those workers who deal with the public.

Correct AnswerverifiedShow Answer

Which of the following scenarios would serve to decrease the demand for unskilled labor in the U.S.?

Correct AnswerverifiedShow Answer

Adam and Bob are identical twins who attended grammar school through high school together. Adam got a job after high school, and Bob got a job after graduating from college. Adam earns $36,000 a year, and Bob earns $69,000 a year. Select the best explanation for this wage difference.

Correct AnswerverifiedShow Answer

In a labor market free from discrimination, wages for workers that are employed by the same company will still differ.

Correct AnswerverifiedShow Answer

As a result of an increase in the earnings gap between skilled and unskilled jobs, the incentive to get a college education has been declining.

Correct AnswerverifiedShow Answer

Table 19-2 Source: US Census Bureau and Mankiw's calculations -Refer to Table 19-2. What are two possible hypotheses to explain the changes in relative demand for high-skilled workers and low-skilled workers in recent years?

Correct Answerverifiedincreased internatio...View AnswerShow Answer

Which of the following comparisons best illustrates a compensating differential?

Correct AnswerverifiedShow Answer

The primary economic explanation as to why a world-renowned architect cannot attain the "superstar" status that an athlete or actor can attain is that

Correct AnswerverifiedShow Answer

Name two occupations that have the two characteristics required for the superstar phenomenon.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following does not explain the "beauty premium" differences in wages?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
There are many explanations of the gende...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
increased internatio...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified