Question 1

Which of the following statements is correct?

Accepted Answer

A)   Differences in human capital may explain differences in wages between blacks and whites.
B)   Racial discrimination is the strongest explanation for differences in wages between blacks and whites.
C)   Gender discrimination is the strongest explanation for differences in wages between blacks and whites.
D)   None of the above statements is correct.E) A) and D)
F) All of the above

Question 2

Jake and Bill are both college graduates.Jake is a patrolman and Bill is a detective in the same police precint.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) C) and D)

Question 3

Scenario 19-5
Billy works for the local piano moving company part-time after school.Billy has worked for the company for two years but still hasn't received a wage increase,even though newer employees have received raises.Billy has threatened his employer with a lawsuit if he doesn't get a raise in the next few weeks.Billy believes he is a victim of labor-market discrimination.
-Refer to Scenario 19-5.Why might an economist be skeptical of Billy's discrimination complaint?

Accepted Answer

A)   Through antitrust laws,discriminating firms can be penalized with large fees.
B)   In a competitive market,employers pay employees based on their value to the firm.
C)   Discrimination leads to profit maximization.
D)   Only cost minimizers practice discrimination.E) C) and D)
F) B) and C)

Question 4

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 some consumers in the market for haircuts have a strong preference for having their hair cut by a barber who is not going bald,then

Accepted Answer

A)   the difference in wages will eventually disappear since a haircut is a homogeneous good.
B)   barbershops that hire barbers with hair will be able to charge a higher price for a haircut to those consumers who have a strong preference for barbers with hair.
C)   barbershops that hire barbers with hair will always be much more profitable.
D)   barbershops that hire bald barbers will always be much more profitable.E) A) and D)
F) B) and C)

Question 5

The statement "the rich get richer and the poor get poorer" is evident in the fact that

Accepted Answer

A)   the earnings gap between high-skill jobs and low-skill jobs has increased over the last several years.
B)   developing countries do not pay workers the value of their marginal product.
C)   developed economies export high-skill jobs to developing countries.
D)   All of the above are correct.E) A) and C)
F) A) and B)

Question 6

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)   competitive pressure in the market for haircuts will eventually cause the equilibrium wage in both markets to be identical.
B)   the equilibrium wage in the "bald" market will eventually fall.
C)   the equilibrium wage in the "hairy" market will eventually rise.
D)   wages in the market for barbers can never be in equilibrium.E) A) and B)
F) None of the above

Question 7

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 D)
F) All of the above

Question 8

Men and women tend to choose different types of occupations,and so

Accepted Answer

A)   a source of wage differences between men and women is differences in human capital.
B)   a source of wage differences between men and women is compensating differentials.
C)   the gap between the earnings of men and the earnings of women is likely even more significant than the data alone indicate.
D)   we should expect the earnings of women to rise relative to the earnings of men,in order to induce women to accept jobs that they have been reluctant to accept in the past.E) B) and C)
F) A) and D)

Question 9

If an employer pays a man a higher wage than a woman,the employer

Accepted Answer

A)   is discriminating against the woman but is still maximizing profit.
B)   is not discriminating against the woman.
C)   may or may not be discriminating against the woman.
D)   is discriminating against the woman and is not maximizing profit.E) C) and D)
F) B) and C)

Question 10

Over the last 20 years or so,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) C) and D)
F) A) and D)

Question 11

If the signaling theory of education is correct,then education is correlated with higher earnings because people with higher levels of education are more productive.

Accepted Answer

A) True 
 B)False

Question 12

In general,the higher a person's education level,

Accepted Answer

A)   the higher the person's earnings.
B)   the more physically attractive the person is likely to be.
C)   the more socially outgoing the person is likely to be.
D)   All of the above are correct.E) None of the above
F) All of the above

Question 13

Scenario 19-5
Billy works for the local piano moving company part-time after school.Billy has worked for the company for two years but still hasn't received a wage increase,even though newer employees have received raises.Billy has threatened his employer with a lawsuit if he doesn't get a raise in the next few weeks.Billy believes he is a victim of labor-market discrimination.
-Refer to Scenario 19-5.In a competitive market for piano movers,why might Billy's wage differential persist?

Accepted Answer

A)   Billy workers harder than the other employees.
B)   Billy joins a labor union.
C)   Billy's amiable personality allows him to work well with his co-workers.
D)   Customers do not like Billy because he has a bad attitude.E) B) and C)
F) A) and C)

Question 14

People are willing to invest in human capital because

Accepted Answer

A)   the demand for skilled labor is higher than for unskilled labor.
B)   it increases the marginal product of their labor.
C)   firms are willing to pay more for more productive workers.
D)   All of the above are correct.E) A) and B)
F) B) and C)

Question 15

Above-equilibrium wages caused by efficiency wages will most likely result in

Accepted Answer

A)   a shortage of labor.
B)   increased unemployment.
C)   compensating wage differentials.
D)   an decrease in the quantity of labor supplied.E) A) and D)
F) None of the above

Question 16

If a worker is indifferent between a job with a wage of $12 per hour and a job with a wage of $15 per hour,then the

Accepted Answer

A)   higher-paying job has a compensating wage differential of $3 per hour.
B)   higher-paying job has a compensating wage differential of $15 per hour.
C)   higher-paying job is intrinsically more attractive than the lower-paying job.
D)   worker's preferences are not rational.E) B) and C)
F) C) and D)

Question 17

A computer is an example of productivity-enhancing human capital.

Accepted Answer

A) True 
 B)False

Question 18

Which of these instances would constitute labor-market discrimination? Pat receives a higher wage than James.Pat and James are identical in all of their labor-market characteristics except that

Accepted Answer

A)   Pat is a college graduate,and James has only a high school diploma.
B)   Pat is a black ,and James is white.
C)   Pat has 15 years of experience at her job,whereas James has only five years of experience.
D)   Pat is more willing to accept dangerous working conditions than James.E) A) and C)
F) None of the above

Question 19

Evidence of differences in average wages of black workers compared to white workers

Accepted Answer

A)   does not alone provide conclusive evidence of discrimination.
B)   clearly indicates differences in productivity between races.
C)   is seldom used to provide evidence of discriminatory bias.
D)   clearly indicates discrimination on the basis of race.E) A) and D)
F) A) and C)

Question 20

The case study of segregated street cars in southern cities illustrates which of the following?

Accepted Answer

A)   Racial discrimination in the seating areas was an important catalyst in the Civil Rights movement.
B)   Segregation laws were supported by local business owners as well as patrons.
C)   Firms usually care more about maximizing profits than discriminating against certain customers.
D)   Racial discrimination was a precursor to gender discrimination.E) All of the above
F) B) and C)

Exam 19: Earnings and Discrimination

If a worker is indifferent between a job with a wage of $12 per hour and a job with a wage of $15 per hour,then the

Correct Answer
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Correct Answer
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The ownership of human capital

Correct Answer
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The case study of segregated street cars in southern cities illustrates which of the following?

Correct Answer
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People are willing to invest in human capital because

Correct Answer
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Over the last 20 years or so,the earnings gap between workers with college degrees and workers with high school degrees has

Correct Answer
verified

The statement "the rich get richer and the poor get poorer" is evident in the fact that

Correct Answer
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Jake and Bill are both college graduates.Jake is a patrolman and Bill is a detective in the same police precint.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 Answer
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Which of these instances would constitute labor-market discrimination? Pat receives a higher wage than James.Pat and James are identical in all of their labor-market characteristics except that

Correct Answer
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A computer is an example of productivity-enhancing human capital.

Correct Answer
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Correct Answer
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In general,the higher a person's education level,

Correct Answer
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Which of the following statements is correct?

Correct Answer
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Evidence of differences in average wages of black workers compared to white workers

Correct Answer
verified

Correct Answer
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Above-equilibrium wages caused by efficiency wages will most likely result in

Correct Answer
verified

If an employer pays a man a higher wage than a woman,the employer

Correct Answer
verified

If the signaling theory of education is correct,then education is correlated with higher earnings because people with higher levels of education are more productive.

Correct Answer
verified

Correct Answer
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Men and women tend to choose different types of occupations,and so

Correct Answer
verified

Exam 19: Earnings and Discrimination

If a worker is indifferent between a job with a wage of $12 per hour and a job with a wage of $15 per hour,then the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The ownership of human capital

Correct AnswerverifiedShow Answer

The case study of segregated street cars in southern cities illustrates which of the following?

Correct AnswerverifiedShow Answer

People are willing to invest in human capital because

Correct AnswerverifiedShow Answer

Over the last 20 years or so,the earnings gap between workers with college degrees and workers with high school degrees has

Correct AnswerverifiedShow Answer

The statement "the rich get richer and the poor get poorer" is evident in the fact that

Correct AnswerverifiedShow Answer

Jake and Bill are both college graduates.Jake is a patrolman and Bill is a detective in the same police precint.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 these instances would constitute labor-market discrimination? Pat receives a higher wage than James.Pat and James are identical in all of their labor-market characteristics except that

Correct AnswerverifiedShow Answer

A computer is an example of productivity-enhancing human capital.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In general,the higher a person's education level,

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Evidence of differences in average wages of black workers compared to white workers

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Above-equilibrium wages caused by efficiency wages will most likely result in

Correct AnswerverifiedShow Answer

If an employer pays a man a higher wage than a woman,the employer

Correct AnswerverifiedShow Answer

If the signaling theory of education is correct,then education is correlated with higher earnings because people with higher levels of education are more productive.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Men and women tend to choose different types of occupations,and so

Correct AnswerverifiedShow Answer

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