Question 1

Hunter is an ambitious, competitive person who has always tried to be the best at everything he does. Consider the following job options facing Hunter and choose the option that will likely afford him the highest wage.

Accepted Answer

A)  elementary school teacher who works 9 months of the year
B)  manager in a large firm who earns an annual salary with no potential for bonuses or commissions
C)  salesperson who earns a small base salary plus a percentage of the sales he makes
D)  local television news anchor who works during the dayE) A) and B)
F) A) and C)

Question 2

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

Question 3

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) None of the above
F) B) and C)

Question 4

In the signaling theory of education,

Accepted Answer

A)  discrimination does not affect wage differentials.
B)  schooling makes workers more productive in the long-run.
C)  schooling makes workers more productive in the short-run.
D)  the worker signals to the employer that he is a valuable employee because he was willing to spend time to get an education.E) B) and C)
F) A) and C)

Question 5

Discrimination occurs when the marketplace offers different opportunities to similar individuals who differ only by

Accepted Answer

A)  age.
B)  years of experience.
C)  years of education.
D)  All of the above are forms of discrimination.E) A) and B)
F) None of the above

Question 6

Attributing the gender wage gap to ongoing discrimination by employers will likely be incorrect because

Accepted Answer

A)  some of the wage gap is explained by efficiency wages.
B)  differences in years of work experience likely lead to productivity differences between men and women.
C)  compensating differentials usually lead to higher wages for women.
D)  All of the above are correct.E) C) and D)
F) A) and B)

Question 7

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 8

Over the past several years, the earnings gap between high-skilled and low-skilled workers has
(i) narrowed because the demand for unskilled labor has risen over time relative to the demand for skilled labor.
(ii) widened because the demand for skilled labor has risen over time relative to the demand for unskilled labor.
(iii) narrowed because the supply of unskilled labor has risen over time relative to the supply of skilled labor.
(iv) widened because the supply of skilled labor has risen over time relative to the supply of unskilled labor.

Accepted Answer

A)  (i)  only
B)  (ii)  only
C)  (i)  and (iii)  only
D)  (ii)  and (iv)  onlyE) A) and D)
F) All of the above

Question 9

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

Question 10

Over the last several years, the earnings gap between workers with college degrees and workers with high school degrees has

Accepted Answer

A)  remained roughly constant for both men and women.
B)  widened for both men and women.
C)  widened for men and narrowed for women.
D)  narrowed for men and widened for women.E) None of the above
F) C) and D)

Question 11

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

Question 12

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

Accepted Answer

A)  Two workers with different undergraduate majors earn different salaries.
B)  Two workers with different years of experience earn different salaries.
C)  Two workers whose jobs entail different risks earn different salaries.
D)  Two workers with different levels of personal attractiveness earn different salaries.E) A) and B)
F) A) and C)

Question 13

Suppose that a college student receives an offer for a summer internship with a stock brokerage firm. Unfortunately for the student, the internship is unpaid. Is it ever economically beneficial to accept an unpaid job?

Accepted Answer

A)  Yes, because the experience gained during the internship would increase the student's human capital.
B)  No, because the opportunity cost is too high.
C)  No, because the student is signaling to future employers that he or she is willing to accept low wages.
D)  Yes, because accepting an unpaid job signals to future employers that the student has stable personal finances.E) A) and B)
F) A) and C)

Question 14

Figure 19-1 
-Refer to Figure 19-1. Suppose the local labor market was in equilibrium to begin with but then the largest local employer decided to change its compensation scheme to $8 as shown. Which of the following compensation schemes could the graph be illustrating?

Accepted Answer

A)  An efficiency wage.
B)  Discrimination.
C)  A compensating differential.
D)  The superstar phenomenon.E) C) and D)
F) B) and D)

Question 15

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

Question 16

John has financial assets totaling $1.5 million, and he plans to use these assets to start his own business. Since John owns these funds and will not need to borrow to start his business, these assets are considered human capital.

Accepted Answer

A) True 
 B)False

Question 17

"The customer is always right" explains

Accepted Answer

A)  the higher wages paid to members of a union.
B)  compensating differentials.
C)  persistent wage discrimination based on consumer preferences.
D)  All of the above are correct.E) A) and B)
F) A) and C)

Question 18

Figure 19-6​ 
-Refer to Figure 19-6. This figure depicts labor demand and supply for the widget industry. The equilibrium market wage is $15. If a labor union forms within the widget industry and subsequently negotiates an hourly wage of $20.00, then there will be an

Accepted Answer

A)  excess demand of 50 labor hours.
B)  excess demand of 20 labor hours.
C)  excess supply of 20 labor hours.
D)  excess supply of 50 labor hours.E) B) and C)
F) A) and B)

Question 19

If we were to observe above-equilibrium wages in a particular labor market, then a possible explanation might be that

Accepted Answer

A)  the theory of efficiency wages holds true for that market.
B)  there is a powerful labor union representing workers in that market.
C)  workers are largely unskilled and/or inexperienced and minimum-wage laws are effectively holding wages up in that market.
D)  All of the above are correct.E) All of the above
F) A) and D)

Question 20

Discrimination occurs when the marketplace offers different opportunities to similar individuals who differ only by

Accepted Answer

A)  race.
B)  level of education.
C)  attitudes toward risk.
D)  All of the above are forms of discrimination.E) None of the above
F) A) and B)

Exam 19: Earnings and Discrimination

Hunter is an ambitious, competitive person who has always tried to be the best at everything he does. Consider the following job options facing Hunter and choose the option that will likely afford him the highest wage.

Correct Answer
verified

Suppose that a college student receives an offer for a summer internship with a stock brokerage firm. Unfortunately for the student, the internship is unpaid. Is it ever economically beneficial to accept an unpaid job?

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

John has financial assets totaling $1.5 million, and he plans to use these assets to start his own business. Since John owns these funds and will not need to borrow to start his business, these assets are considered human capital.

Correct Answer
verified

Figure 19-1 -Refer to Figure 19-1. Suppose the local labor market was in equilibrium to begin with but then the largest local employer decided to change its compensation scheme to $8 as shown. Which of the following compensation schemes could the graph be illustrating?

Correct Answer
verified

Figure 19-6 -Refer to Figure 19-6. This figure depicts labor demand and supply for the widget industry. The equilibrium market wage is $15. If a labor union forms within the widget industry and subsequently negotiates an hourly wage of $20.00, then there will be an

Correct Answer
verified

Correct Answer
verified

Over the last several years, the earnings gap between workers with college degrees and workers with high school degrees has

Correct Answer
verified

In the signaling theory of education,

Correct Answer
verified

Correct Answer
verified

If we were to observe above-equilibrium wages in a particular labor market, then a possible explanation might be that

Correct Answer
verified

Attributing the gender wage gap to ongoing discrimination by employers will likely be incorrect because

Correct Answer
verified

Discrimination occurs when the marketplace offers different opportunities to similar individuals who differ only by

Correct Answer
verified

"The customer is always right" explains

Correct Answer
verified

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

Correct Answer
verified

Discrimination occurs when the marketplace offers different opportunities to similar individuals who differ only by

Correct Answer
verified

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

Correct Answer
verified

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

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

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

Correct Answer
verified

Exam 19: Earnings and Discrimination

Hunter is an ambitious, competitive person who has always tried to be the best at everything he does. Consider the following job options facing Hunter and choose the option that will likely afford him the highest wage.

Correct AnswerverifiedShow Answer

Suppose that a college student receives an offer for a summer internship with a stock brokerage firm. Unfortunately for the student, the internship is unpaid. Is it ever economically beneficial to accept an unpaid job?

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

John has financial assets totaling $1.5 million, and he plans to use these assets to start his own business. Since John owns these funds and will not need to borrow to start his business, these assets are considered human capital.

Correct AnswerverifiedShow Answer

Figure 19-1 -Refer to Figure 19-1. Suppose the local labor market was in equilibrium to begin with but then the largest local employer decided to change its compensation scheme to $8 as shown. Which of the following compensation schemes could the graph be illustrating?

Correct AnswerverifiedShow Answer

Figure 19-6​ -Refer to Figure 19-6. This figure depicts labor demand and supply for the widget industry. The equilibrium market wage is $15. If a labor union forms within the widget industry and subsequently negotiates an hourly wage of $20.00, then there will be an

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Over the last several years, the earnings gap between workers with college degrees and workers with high school degrees has

Correct AnswerverifiedShow Answer

In the signaling theory of education,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If we were to observe above-equilibrium wages in a particular labor market, then a possible explanation might be that

Correct AnswerverifiedShow Answer

Attributing the gender wage gap to ongoing discrimination by employers will likely be incorrect because

Correct AnswerverifiedShow Answer

Discrimination occurs when the marketplace offers different opportunities to similar individuals who differ only by

Correct AnswerverifiedShow Answer

"The customer is always right" explains

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

Discrimination occurs when the marketplace offers different opportunities to similar individuals who differ only by

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

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

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

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Figure 19-6 -Refer to Figure 19-6. This figure depicts labor demand and supply for the widget industry. The equilibrium market wage is $15. If a labor union forms within the widget industry and subsequently negotiates an hourly wage of $20.00, then there will be an

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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