Question 1

Experimental evidence indicates women choose less competitive environments than men.

Accepted Answer

A) True 
 B)False

Question 2

Given that the median male is better paid than the median female,which of the following is a valid explanation for wage differences?

Accepted Answer

A)   compensating differentials
B)   differences in human capital
C)   discrimination
D)   All of the above can be a partial explanation.E) A) and B)
F) None of the above

Question 3

Which of the following is not an example of a compensating differential?

Accepted Answer

A)   Chris is a consultant who is paid more than other workers with similar skills because he is required to travel 80% of the time.
B)   Abby is a teacher who is paid less than other workers with similar skills because she does not have to work during the summer months.
C)   Ben is a businessman who is paid more than other workers with similar skills because he graduated from a prestigious university with honors.
D)   Daphne is a skyscraper window-washer who is paid more than other workers with similar skills because of the risk she faces in her daily job.E) C) and D)
F) B) and D)

Question 4

It is likely that,if we could measure the quality as well as the quantity of education,

Accepted Answer

A)   the human-capital argument would become less compelling as a means of explaining wage differentials between white workers and black workers.
B)   the human-capital argument would become less compelling as a means of explaining wage differentials between male workers and female workers.
C)   wage differentials between white workers and black workers would be more puzzling than they are now.
D)   wage differentials between white workers and black workers would be more fully explained.E) B) and D)
F) A) and D)

Question 5

The market wage could be higher than the equilibrium wage if a worker

Accepted Answer

A)   belongs to a labor union.
B)   is covered by a minimum-wage law.
C)   is paid an efficiency wage.
D)   All of the above are correct.E) A) and D)
F) All of the above

Question 6

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) B) and C)
F) C) and D)

Question 7

Firms that operate in competitive product markets and choose to practice discrimination in hiring workers

Accepted Answer

A)   will survive if they increase production and garner a larger market share.
B)   will eventually earn zero economic profits.
C)   will survive as long as they are willing to have a smaller market share.
D)   are likely to eventually go out of business.E) A) and B)
F) B) and C)

Question 8

Park rangers at Yellowstone National Park are known to have low wages.This is probably because

Accepted Answer

A)   park rangers are required to be college graduates.
B)   park rangers don't need much money to live.
C)   park ranger jobs are perceived to be dangerous.
D)   park ranger jobs are perceived to be "fun."E) All of the above
F) B) and C)

Question 9

Jake and Bill are both college graduates.Jake is a patrolman and Bill is a detective in the same police precinct.While Jake's job is inherently more dangerous than Bill's,Bill passed a difficult exam to gain promotion to detective.Bill earns more than Jake because

Accepted Answer

A)   of a compensating differential.
B)   of efficiency wages.
C)   of education as a signal.
D)   Bill has more human capital.E) A) and B)
F) A) and C)

Question 10

Which of the following theories would suggest that attending school does not improve productivity but that high-ability people are more likely to stay in school?

Accepted Answer

A)   physical-capital theory
B)   human-capital theory
C)   signaling theory
D)   neoclassical theoryE) A) and B)
F) A) and C)

Question 11

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers in the United States offer two main hypotheses.Both hypotheses

Accepted Answer

A)   suggest that demand and supply conditions have played a less important role in determining workers' wages in recent years.
B)   suggest that,over time,the demand for skilled labor has risen relative to the demand for unskilled labor.
C)   emphasize the shrinking importance of international trade in recent years.
D)   emphasize the growing importance of women and teenagers in the workforce in recent years.E) B) and C)
F) A) and D)

Question 12

Which of the following might explain the beauty premium found by labor economists Hamermesh and Biddle?

Accepted Answer

A)   Good looks are an innate ability for some jobs,which results in higher productivity and higher wages.
B)   Good looks may be an indirect measure of other types of ability such as attention to detail.
C)   If better-looking people earn more than average-looking people,employers may be discriminating based on personal appearance.
D)   All of the above could explain the beauty premium.E) All of the above
F) C) and D)

Question 13

Consumers are often a primary source of discrimination in labor markets.

Accepted Answer

A) True 
 B)False

Question 14

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) None of the above
F) A) and D)

Question 15

If an older worker earns less than a younger worker for the same job,we have proof of age discrimination.

Accepted Answer

A) True 
 B)False

Question 16

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) C) and D)
F) All of the above

Question 17

Certain factors that are probably important in determining wages are nevertheless difficult to measure.Consequently,labor economists find those factors difficult to incorporate into their studies of labor markets and wages.Those factors include

Accepted Answer

A)   effort and natural ability.
B)   natural ability and years of experience.
C)   years of experience and job characteristics.
D)   race and job characteristics.E) A) and D)
F) B) and C)

Question 18

The ownership of human capital

Accepted Answer

A)   is typically embodied in related physical capital.
B)   may be subject to government restrictions on transferability.
C)   is not easily transferable.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 19

According to evidence provided by the U.S.government,the median black

Accepted Answer

A)   man earns more than the median black woman.
B)   woman earns less than the median white woman
C)   man earns less than the median white man.
D)   All of the above are correct.E) A) and D)
F) C) and D)

Question 20

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 B)
F) A) and C)

Exam 19: Earnings and Discrimination

The market wage could be higher than the equilibrium wage if a worker

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Jake and Bill are both college graduates.Jake is a patrolman and Bill is a detective in the same police precinct.While Jake's job is inherently more dangerous than Bill's,Bill passed a difficult exam to gain promotion to detective.Bill earns more than Jake because

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The ownership of human capital

Correct AnswerverifiedShow Answer

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers in the United States offer two main hypotheses.Both hypotheses

Correct AnswerverifiedShow Answer

Which of the following theories would suggest that attending school does not improve productivity but that high-ability people are more likely to stay in school?

Correct AnswerverifiedShow Answer

Which of the following might explain the beauty premium found by labor economists Hamermesh and Biddle?

Correct AnswerverifiedShow Answer

According to the signaling theory of education,

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Which of the following is not an example of a compensating differential?

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Firms that operate in competitive product markets and choose to practice discrimination in hiring workers

Correct AnswerverifiedShow Answer

If an older worker earns less than a younger worker for the same job,we have proof of age discrimination.

Correct AnswerverifiedShow Answer

Consumers are often a primary source of discrimination in labor markets.

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

Given that the median male is better paid than the median female,which of the following is a valid explanation for wage differences?

Correct AnswerverifiedShow Answer

According to evidence provided by the U.S.government,the median black

Correct AnswerverifiedShow Answer

Experimental evidence indicates women choose less competitive environments than men.

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

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Park rangers at Yellowstone National Park are known to have low wages.This is probably because

Correct AnswerverifiedShow Answer

Certain factors that are probably important in determining wages are nevertheless difficult to measure.Consequently,labor economists find those factors difficult to incorporate into their studies of labor markets and wages.Those factors include

Correct AnswerverifiedShow Answer

It is likely that,if we could measure the quality as well as the quantity of education,

Correct AnswerverifiedShow Answer

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