Question 1

Technology is an important factor in explaining the high incomes of some athletes primarily because

Accepted Answer

A)   technology accounts for differences in incomes within all occupations.
B)   technology makes it possible for very large numbers of people to watch athletes perform.
C)   technology improves the performance of athletes.
D)   technology requires human capital to use it efficiently.E) B) and C)
F) All of the above

Question 2

Labor unions will raise the quantity of labor demanded.

Accepted Answer

A) True 
 B)False

Question 3

Evidence of discrimination in labor markets

Accepted Answer

A)   applies only to race and gender.
B)   is conclusively identified by 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) A) and B)
F) None of the above

Question 4

If employers are profit-maximizers, then

Accepted Answer

A)   competition will always eventually eliminate employment discrimination.
B)   employment discrimination may persist if consumers discriminate.
C)   employment discrimination will persist because it is always profitable.
D)   compensating differentials cannot exist.E) All of the above
F) B) and C)

Question 5

The statement that "the rich get richer, and the poor get poorer" is supported by evidence of an expanding wage gap between high-skill and low-skill workers.

Accepted Answer

A) True 
 B)False

Question 6

Nurses who work in hospitals often are required to work on weekends, whereas nurses who work in doctors' offices generally only work Monday through Friday. Hospital nurses who must work on weekends are usually paid more than nurses working in doctors' offices for the same work even if they have the same skills and education. This difference in pay is attributed to

Accepted Answer

A)   an efficiency wage.
B)   compensating differential.
C)   differences in the marginal product of labor.
D)   differences in human capital.E) C) and D)
F) A) and C)

Question 7

Which of the following professionals is most likely to generate the income of a superstar?

Accepted Answer

A)   the best teacher
B)   the best dentist
C)   the best guitar player
D)   the best airplane pilotE) B) and C)
F) None of the above

Question 8

Discrimination may persist even in competitive markets when the source of the discrimination is

Accepted Answer

A)   employer prejudice.
B)   customer prejudice.
C)   wage prejudice.
D)   employee prejudice.E) B) and C)
F) A) and B)

Question 9

Which of the following statements accurately explains the superstar phenomenon in wages?

Accepted Answer

A)   Better carpenters earn more than average carpenters because people are willing to pay higher prices for higher-quality work.
B)   The more productive an author is, the more books she can write each year, so the more she earns.
C)   Talented movie stars earn more than equally talented mechanics because technology allows the delivery of the services provided by the movie stars to all interested customers.
D)   Athletes get paid for performing services that everyday people perform as hobbies.E) A) and B)
F) A) and C)

Question 10

Which of the following is considered human capital?

Accepted Answer

A)   the ingredients a chef uses to prepare meals
B)   the pots and pans and other tools a chef uses to prepare meals
C)   the financial capital a chef uses to start his own restaurant
D)   the skills a chef learns when attending a class about cake decoratingE) B) and D)
F) All of the above

Question 11

Of the theories listed below, which do the best job of explaining why educated people are paid more than uneducated people?

Accepted Answer

A)   human-capital and price-fixing
B)   human-capital and signaling
C)   wage-differential and signaling
D)   wage-differential and compensating-differentialsE) B) and D)
F) B) and C)

Question 12

Which of the following theories explains why increased education translates into higher wages?

Accepted Answer

A)   human-capital theory
B)   the theory of compensating differentials
C)   the theory of supply and demand
D)   comparative advantageE) A) and B)
F) A) and C)

Question 13

Politicians often point to wage differentials as evidence of labor market discrimination against ethnic minorities and women. Economists, however, argue against this approach because

Accepted Answer

A)   they don't believe the wage differential really exists.
B)   they can't agree on a definition of the term "discrimination."
C)   they believe compensating differentials account for all wage differences.
D)   different people may have different wages for reasons unrelated to discrimination.E) None of the above
F) A) and D)

Question 14

Which of the following would tend to lessen the wage gap between a country's skilled and unskilled workers?

Accepted Answer

A)   technology increases the productivity of unskilled workers more than that of skilled workers
B)   the country increases trade with countries that have a higher proportion of skilled workers
C)   both A and B
D)   neither A nor BE) A) and C)
F) None of the above

Question 15

In the signaling theory of education,

Accepted Answer

A)   schooling itself does not lead to more productive workers.
B)   chance plays more of a role than in the human-capital theory.
C)   schooling enhances worker productivity.
D)   compensating differentials do not matter.E) A) and B)
F) C) and D)

Question 16

The term "compensating differential" refers to

Accepted Answer

A)   the fact that workers who do similar work should be paid the same wage.
B)   the fact that some workers live further from their jobs than do other workers.
C)   a wage difference that is due to unionization of some firms but not others.
D)   a wage difference that arises from nonmonetary characteristics of different jobs.E) A) and D)
F) A) and C)

Question 17

Which of the following statements does not accurately describe the market for labor?

Accepted Answer

A)   The characteristics of workers, such as their education and experience, the characteristics of jobs, such as their pleasantness or unpleasantness, and the presence or absence of discrimination by employers all determine equilibrium wages.
B)   Labor unions, minimum wage laws, and efficiency wages all may increase wages above their equilibrium level.
C)   Firms are willing to pay more for better-educated workers as long as there is an excess supply of this type of worker.
D)   Discrimination by employers against a group of workers may artificially lower wages for that group.E) A) and D)
F) All of the above

Question 18

Store clerks are known to have low wages. This is likely to reflect the fact that

Accepted Answer

A)   store clerk jobs are perceived to be relatively easy, thus attracting low-skill workers.
B)   store clerk jobs are perceived to be relatively difficult, thus attracting high-skill workers.
C)   many people perceive the job of store clerk as having significant risk of death on the job.
D)   store clerks are required to have a college degree.E) B) and C)
F) C) and D)

Question 19

Many economists believe that competitive, market economies provide a natural antidote to employer discrimination known as the

Accepted Answer

The answer of Many economists believe that competitive, market economies...

Question 20

Minimum wage laws

Accepted Answer

A)   creates a surplus of labor in markets where the equilibrium wage is above the minimum wage.
B)   cannot be valid unless labor unions are sufficiently powerful to force enactment of those laws in the first place.
C)   are likely to have a greater effect on unskilled-labor markets than on skilled-labor markets.
D)   All of the above are correct.E) A) and B)
F) C) and D)

Exam 19: Earnings and Discrimination

Labor unions will raise the quantity of labor demanded.

Correct Answer
verified

The statement that "the rich get richer, and the poor get poorer" is supported by evidence of an expanding wage gap between high-skill and low-skill workers.

Correct Answer
verified

Which of the following theories explains why increased education translates into higher wages?

Correct Answer
verified

If employers are profit-maximizers, then

Correct Answer
verified

Minimum wage laws

Correct Answer
verified

Which of the following statements does not accurately describe the market for labor?

Correct Answer
verified

Correct Answer
verified

Politicians often point to wage differentials as evidence of labor market discrimination against ethnic minorities and women. Economists, however, argue against this approach because

Correct Answer
verified

Which of the following would tend to lessen the wage gap between a country's skilled and unskilled workers?

Correct Answer
verified

Evidence of discrimination in labor markets

Correct Answer
verified

In the signaling theory of education,

Correct Answer
verified

Discrimination may persist even in competitive markets when the source of the discrimination is

Correct Answer
verified

Store clerks are known to have low wages. This is likely to reflect the fact that

Correct Answer
verified

Which of the following statements accurately explains the superstar phenomenon in wages?

Correct Answer
verified

Which of the following is considered human capital?

Correct Answer
verified

Technology is an important factor in explaining the high incomes of some athletes primarily because

Correct Answer
verified

Of the theories listed below, which do the best job of explaining why educated people are paid more than uneducated people?

Correct Answer
verified

Which of the following professionals is most likely to generate the income of a superstar?

Correct Answer
verified

The term "compensating differential" refers to

Correct Answer
verified

Many economists believe that competitive, market economies provide a natural antidote to employer discrimination known as the

Correct Answer
verified

Exam 19: Earnings and Discrimination

Labor unions will raise the quantity of labor demanded.

Correct AnswerverifiedShow Answer

The statement that "the rich get richer, and the poor get poorer" is supported by evidence of an expanding wage gap between high-skill and low-skill workers.

Correct AnswerverifiedShow Answer

Which of the following theories explains why increased education translates into higher wages?

Correct AnswerverifiedShow Answer

If employers are profit-maximizers, then

Correct AnswerverifiedShow Answer

Minimum wage laws

Correct AnswerverifiedShow Answer

Which of the following statements does not accurately describe the market for labor?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Politicians often point to wage differentials as evidence of labor market discrimination against ethnic minorities and women. Economists, however, argue against this approach because

Correct AnswerverifiedShow Answer

Which of the following would tend to lessen the wage gap between a country's skilled and unskilled workers?

Correct AnswerverifiedShow Answer

Evidence of discrimination in labor markets

Correct AnswerverifiedShow Answer

In the signaling theory of education,

Correct AnswerverifiedShow Answer

Discrimination may persist even in competitive markets when the source of the discrimination is

Correct AnswerverifiedShow Answer

Store clerks are known to have low wages. This is likely to reflect the fact that

Correct AnswerverifiedShow Answer

Which of the following statements accurately explains the superstar phenomenon in wages?

Correct AnswerverifiedShow Answer

Which of the following is considered human capital?

Correct AnswerverifiedShow Answer

Technology is an important factor in explaining the high incomes of some athletes primarily because

Correct AnswerverifiedShow Answer

Of the theories listed below, which do the best job of explaining why educated people are paid more than uneducated people?

Correct AnswerverifiedShow Answer

Which of the following professionals is most likely to generate the income of a superstar?

Correct AnswerverifiedShow Answer

The term "compensating differential" refers to

Correct AnswerverifiedShow Answer

Many economists believe that competitive, market economies provide a natural antidote to employer discrimination known as the

Correct AnswerverifiedShow Answer

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