Question 1

The economic theory of labor markets suggests that wages are determined by labor supply and labor demand.

Accepted Answer

A) True 
 B)False

Question 2

Discrimination by a manager in the hiring process

Accepted Answer

A)  decreases the firm's costs.
B)  increases the firm's costs.
C)  is evident if a white manager refuses to hire a Hispanic worker.
D)  is evident if a 30-year-old manager refuses to hire a 50-year-old worker.E) C) and D)
F) A) and D)

Question 3

Tom,the manager and owner of a small company,believes in the signaling theory of education,not the human capital theory.As such,Tom would be most likely to agree with which of the following quotes?

Accepted Answer

A)  "We encourage our employees to enroll in night classes to improve their on-the-job productivity."
B)  "We encourage our employees to participate in online seminars to learn new skills."
C)  "We pay higher wages to employees who have MBAs because,on average,their job performance is better than similar employees who do not have MBAs."
D)  "When we interview prospective employees at job fairs,we are looking for college graduates because they have the determination and follow-through to finish what they start."E) A) and C)
F) C) and D)

Question 4

When the supply of workers is plentiful,one would predict that market wages would be

Accepted Answer

A)  determined outside the domain of economic theory.
B)  determined solely by factors that affect demand.
C)  low,other things equal.
D)  high,other things equal.E) B) and C)
F) All of the above

Question 5

The time spent by students in college

Accepted Answer

A)  leads to lower lifetime earnings because opportunity costs are high.
B)  is an investment in human capital.
C)  decreases human capital by lowering work experience.
D)  increases as the wages paid to low-skilled workers rise.E) B) and D)
F) A) and C)

Question 6

One example of labor-market discrimination is that firms may be less likely to interview job-market candidates whose names suggest that they are members of a racial minority.

Accepted Answer

A) True 
 B)False

Question 7

If the signaling theory of education is correct,

Accepted Answer

A)  workers with more years of formal schooling will earn less than workers with fewer years of formal schooling.
B)  additional years of formal schooling do not increase a worker's productivity.
C)  workers with more years of formal schooling are less likely to be affected by ability,effort,and chance.
D)  men are more likely to earn more than women because men are more likely to have graduated from college.E) None of the above
F) All of the above

Question 8

Discrimination is usually not a profit-maximizing strategy.

Accepted Answer

A) True 
 B)False

Question 9

Superstars earn high incomes due to their ability to satisfy the demands of millions of people at once.

Accepted Answer

A) True 
 B)False

Question 10

Suppose that a company hires recent college graduates for two types of jobs,sales people and credit analysts.The hours worked and skill levels are the same for both positions.The sales people get to travel to several desirable locations,whereas the credit analysts do not leave the home office.When comparing the salaries of the two positions,it is likely that the company pays the

Accepted Answer

A)  sales people less as a compensating differential.
B)  credit analysts less as a compensating differential.
C)  Same salary for both positions because they require the same skill level.
D)  Same salary for both positions because it would be illegal to do otherwise.E) All of the above
F) A) and D)

Question 11

Coal mining is a dangerous and dirty job.Suppose someone developed new machinery that made coal mining safer and cleaner; at the same time,suppose it made coal miners more productive.We would expect that the wages of coal miners would

Accepted Answer

A)  rise.
B)  fall.
C)  stay exactly the same.
D)  rise,fall,or stay the same.E) None of the above
F) B) and C)

Question 12

Workers whose skills become obsolete as a result of technological change are often paid a lower wage as a result of

Accepted Answer

A)  natural ability.
B)  geographic location of employment.
C)  chance.
D)  work effort.E) None of the above
F) All of the above

Question 13

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 14

A union's major source of power is its

Accepted Answer

A)  high-profile leadership.
B)  ability to increase productivity.
C)  ability to threaten a strike.
D)  ability to deny employers the opportunity to bargain over wages.E) A) and B)
F) A) and C)

Question 15

Discrimination by a manager in the hiring process may be consistent with the decision to maximize profits if

Accepted Answer

A)  customers are willing to pay higher prices in order to maintain the discrimination.
B)  the discrimination is based on race but not gender.
C)  the discrimination is based on gender but not race.
D)  Discrimination is never consistent with profit maximization.E) None of the above
F) A) and D)

Question 16

Technology is an important factor in explaining the high incomes of superstars because

Accepted Answer

A)  technology accounts for differences in incomes within all occupations.
B)  technology makes it possible for the best producer to supply every customer at low cost.
C)  technology that can limit access to the superstars is available.
D)  only technologically-literate superstars can earn super incomes.E) All of the above
F) A) and B)

Question 17

Which of the following sets of circumstances is likely to provide the best evidence in support of the theory of efficiency wages?

Accepted Answer

A)  Workers in the market are unskilled and not represented by a union,and their wage exceeds both the equilibrium wage and the minimum wage.
B)  Workers in the market are highly skilled and not represented by a union,and their wage exceeds the minimum wage.
C)  Workers in the market are highly skilled and represented by a union,and their wage exceeds the equilibrium wage.
D)  Employers in the market are known for reducing the workers' wage whenever they get an opportunity to do so.E) A) and B)
F) A) and C)

Question 18

Which of the following statements is correct?

Accepted Answer

A)  Compensating wage differentials reflect different skills of workers.
B)  Discrimination by employers affects the marginal productivity of workers.
C)  The signaling theory of education suggests that schooling does not affect worker productivity.
D)  The superstar phenomenon explains why more talented entertainers earn more than less talented entertainers.E) A) and B)
F) B) and D)

Question 19

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

Question 20

If there is systematic discrimination against a group of workers,then the wage paid to those workers likely will be

Accepted Answer

A)  lower due to a higher supply of workers in that group.
B)  lower due to a lower demand for workers in that group.
C)  higher due to a lower supply of workers in that group.
D)  higher due to a higher demand for workers in that group.E) A) and C)
F) None of the above

Exam 19: Earnings and Discrimination

Discrimination is usually not a profit-maximizing strategy.

Correct Answer
verified

Technology is an important factor in explaining the high incomes of superstars because

Correct Answer
verified

Workers whose skills become obsolete as a result of technological change are often paid a lower wage as a result of

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

Discrimination by a manager in the hiring process

Correct Answer
verified

If the signaling theory of education is correct,

Correct Answer
verified

The economic theory of labor markets suggests that wages are determined by labor supply and labor demand.

Correct Answer
verified

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

Correct Answer
verified

A union's major source of power is its

Correct Answer
verified

Which of the following sets of circumstances is likely to provide the best evidence in support of the theory of efficiency wages?

Correct Answer
verified

When the supply of workers is plentiful,one would predict that market wages would be

Correct Answer
verified

Discrimination by a manager in the hiring process may be consistent with the decision to maximize profits if

Correct Answer
verified

One example of labor-market discrimination is that firms may be less likely to interview job-market candidates whose names suggest that they are members of a racial minority.

Correct Answer
verified

Superstars earn high incomes due to their ability to satisfy the demands of millions of people at once.

Correct Answer
verified

Coal mining is a dangerous and dirty job.Suppose someone developed new machinery that made coal mining safer and cleaner; at the same time,suppose it made coal miners more productive.We would expect that the wages of coal miners would

Correct Answer
verified

If there is systematic discrimination against a group of workers,then the wage paid to those workers likely will be

Correct Answer
verified

Tom,the manager and owner of a small company,believes in the signaling theory of education,not the human capital theory.As such,Tom would be most likely to agree with which of the following quotes?

Correct Answer
verified

The time spent by students in college

Correct Answer
verified

Exam 19: Earnings and Discrimination

Discrimination is usually not a profit-maximizing strategy.

Correct AnswerverifiedShow Answer

Technology is an important factor in explaining the high incomes of superstars because

Correct AnswerverifiedShow Answer

Workers whose skills become obsolete as a result of technological change are often paid a lower wage as a result of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Discrimination by a manager in the hiring process

Correct AnswerverifiedShow Answer

If the signaling theory of education is correct,

Correct AnswerverifiedShow Answer

The economic theory of labor markets suggests that wages are determined by labor supply and labor demand.

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

A union's major source of power is its

Correct AnswerverifiedShow Answer

Which of the following sets of circumstances is likely to provide the best evidence in support of the theory of efficiency wages?

Correct AnswerverifiedShow Answer

When the supply of workers is plentiful,one would predict that market wages would be

Correct AnswerverifiedShow Answer

Discrimination by a manager in the hiring process may be consistent with the decision to maximize profits if

Correct AnswerverifiedShow Answer

One example of labor-market discrimination is that firms may be less likely to interview job-market candidates whose names suggest that they are members of a racial minority.

Correct AnswerverifiedShow Answer

Superstars earn high incomes due to their ability to satisfy the demands of millions of people at once.

Correct AnswerverifiedShow Answer

Coal mining is a dangerous and dirty job.Suppose someone developed new machinery that made coal mining safer and cleaner; at the same time,suppose it made coal miners more productive.We would expect that the wages of coal miners would

Correct AnswerverifiedShow Answer

If there is systematic discrimination against a group of workers,then the wage paid to those workers likely will be

Correct AnswerverifiedShow Answer

Tom,the manager and owner of a small company,believes in the signaling theory of education,not the human capital theory.As such,Tom would be most likely to agree with which of the following quotes?

Correct AnswerverifiedShow Answer

The time spent by students in college

Correct AnswerverifiedShow Answer

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