Question 1

Explain the role that consumers play in perpetuating discrimination in labor markets.

Accepted Answer

Consumers are able to exercise their bia...

Question 2

The superstar phenomenon explains why professional athletes earn more than amateur athletes.

Accepted Answer

A) True 
 B)False

Question 3

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 differentialsE) A) and B)
F) A) and C)

Question 4

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) A) and C)
F) A) and D)

Question 5

According to economic historians, streetcars in southern cities in the early 1900s were racially segregated because the owners of the firms believed that segregation raised the firms' profits.

Accepted Answer

A) True 
 B)False

Question 6

Figure 19-6 
-Refer to Figure 19-6. Given demand, D1, and supply, S1, how much more do workers earn per hour if the supply curve shifts to S2?

Accepted Answer

The answer of Figure 19-6 
-Refer to Figure 19-6. Given...

Question 7

Nancy and Sheila are both loan officers who graduated from the same university with bachelors' degrees in economics, and achieved similar performance reviews. Nancy started working one year before Sheila. If Nancy earns a higher annual salary than Sheila because she has more experience, the employer is

Accepted Answer

A)  rewarding increases in human capital.
B)  paying efficiency wages.
C)  practicing discrimination.
D)  paying a compensating differential.E) All of the above
F) A) and B)

Question 8

Some discriminatory hiring practices can be expected, even if markets are competitive, as a result of

Accepted Answer

A)  unrestricted entry and exit in markets.
B)  lower costs of hiring.
C)  a perfectly elastic market demand.
D)  customer preferences.E) B) and C)
F) A) and B)

Question 9

Which of the following is an example of a compensating differential?

Accepted Answer

A)  paying workers with more years of experience higher wages than workers with fewer years of experience, all else equal
B)  paying workers who work on the day shift lower wages than workers who work the night shift, all else equal
C)  paying accountants who have passed the Certified Public Accountant exam higher wages than accountants who have not passed it, all else equal
D)  All of the above are examples of compensating differentials.E) A) and B)
F) A) and C)

Question 10

Since measurable factors such as years of experience and years of education explain less than half of the variation in wages, ability, effort, and chance must play a significant role in determining wages.

Accepted Answer

A) True 
 B)False

Question 11

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

Question 12

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 C)

Question 13

The signaling theory of education suggests that when people earn a college degree they do not become more productive, but they do signal their high ability to prospective employers.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following would be considered human capital?

Accepted Answer

A)  the financial capital a person earns over a lifetime of investing
B)  the machinery a worker uses to produce a product
C)  the training a worker receives when starting a new job
D)  the break room in a factory where employees go to have coffeeE) C) and D)
F) A) and B)

Question 15

Figure 19-2 
-Refer to Figure 19-2. This figure depicts labor demand and supply in a nonunionized labor market. If the minimum wage were $7.50, employment in this market would be

Accepted Answer

A)  400
B)  500
C)  600
D)  700E) None of the above
F) C) and D)

Question 16

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) A) and B)
F) A) and C)

Question 17

Superstars arise in markets in which every customer in the market is able to enjoy the good supplied by the

Accepted Answer

The answer of Superstars arise in markets in which every...

Question 18

Paul and David work for the same company and have the same job title, education, work experience, and are equally skilled at what they do. Paul works the night shift and is paid $60,000 a year, while David works a regular day shift and is paid $55,000 a year. Which of the following is the best explanation for why Paul earns more than David?

Accepted Answer

A)  Paul has more human capital than David.
B)  David has more human capital than Paul.
C)  Paul has received a compensating differential.
D)  Aside from pay, the night shift is more desirable than the day shift.E) None of the above
F) B) and C)

Question 19

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 D)
F) A) and B)

Question 20

Effective minimum-wage laws will most likely

Accepted Answer

A)  increase demand for labor.
B)  create a surplus of labor.
C)  increase incomes for all unskilled workers.
D)  decrease incomes for all unskilled workers.E) A) and C)
F) A) and D)

Exam 19: Earnings and Discrimination

Explain the role that consumers play in perpetuating discrimination in labor markets.

Correct Answer
verified
Consumers are able to exercise their bia...
View Answer

Figure 19-6 -Refer to Figure 19-6. Given demand, D1, and supply, S1, how much more do workers earn per hour if the supply curve shifts to S2?

Correct Answer
verified

The superstar phenomenon explains why professional athletes earn more than amateur athletes.

Correct Answer
verified

According to economic historians, streetcars in southern cities in the early 1900s were racially segregated because the owners of the firms believed that segregation raised the firms' profits.

Correct Answer
verified

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

Correct Answer
verified

Since measurable factors such as years of experience and years of education explain less than half of the variation in wages, ability, effort, and chance must play a significant role in determining wages.

Correct Answer
verified

Which of the following would be considered human capital?

Correct Answer
verified

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

Correct Answer
verified

The signaling theory of education suggests that when people earn a college degree they do not become more productive, but they do signal their high ability to prospective employers.

Correct Answer
verified

Which of the following is an example of a compensating differential?

Correct Answer
verified

Some discriminatory hiring practices can be expected, even if markets are competitive, as a result of

Correct Answer
verified

Correct Answer
verified

Figure 19-2 -Refer to Figure 19-2. This figure depicts labor demand and supply in a nonunionized labor market. If the minimum wage were $7.50, employment in this market would be

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

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 Answer
verified

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

Correct Answer
verified

Correct Answer
verified

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

Superstars arise in markets in which every customer in the market is able to enjoy the good supplied by the

Correct Answer
verified

Effective minimum-wage laws will most likely

Correct Answer
verified

Exam 19: Earnings and Discrimination

Explain the role that consumers play in perpetuating discrimination in labor markets.

Correct AnswerverifiedConsumers are able to exercise their bia...View AnswerShow Answer

Figure 19-6 -Refer to Figure 19-6. Given demand, D1, and supply, S1, how much more do workers earn per hour if the supply curve shifts to S2?

Correct AnswerverifiedShow Answer

The superstar phenomenon explains why professional athletes earn more than amateur athletes.

Correct AnswerverifiedShow Answer

According to economic historians, streetcars in southern cities in the early 1900s were racially segregated because the owners of the firms believed that segregation raised the firms' profits.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Since measurable factors such as years of experience and years of education explain less than half of the variation in wages, ability, effort, and chance must play a significant role in determining wages.

Correct AnswerverifiedShow Answer

Which of the following would be considered human capital?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The signaling theory of education suggests that when people earn a college degree they do not become more productive, but they do signal their high ability to prospective employers.

Correct AnswerverifiedShow Answer

Which of the following is an example of a compensating differential?

Correct AnswerverifiedShow Answer

Some discriminatory hiring practices can be expected, even if markets are competitive, as a result of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 19-2 -Refer to Figure 19-2. This figure depicts labor demand and supply in a nonunionized labor market. If the minimum wage were $7.50, employment in this market would be

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

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

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Superstars arise in markets in which every customer in the market is able to enjoy the good supplied by the

Correct AnswerverifiedShow Answer

Effective minimum-wage laws will most likely

Correct AnswerverifiedShow Answer

Correct Answer
verified
Consumers are able to exercise their bia...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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