Question 1

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 B)
F) A) and C)

Question 2

The "superstar" phenomenon can apply to which of these jobs?

Accepted Answer

A)   high-school teacher
B)   author
C)   heart surgeon
D)   carpenterE) All of the above
F) A) and C)

Question 3

"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 D)
F) B) and C)

Question 4

Empirical evidence suggests that ability, effort, and chance are not likely to be significant contributors to wage differences.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is an example of discrimination in the labor market?

Accepted Answer

A)   Women earn less than men because women are more likely to be employed in occupations that pay less, such as elementary school teachers rather than electrical engineers.
B)   Women earn less than men because women have, on average, fewer years of experience in the labor force because women, on average, periodically leave the labor force to raise children.
C)   A pharmaceutical sales company pays women less than men because the company's customers, physicians and pharmacists, say that they prefer to deal with men rather than women.
D)   All of the above are examples of discrimination.E) A) and D)
F) A) and C)

Question 6

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

Question 7

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 D)
F) All of the above

Question 8

Which of the following is true of minimum-wage laws?

Accepted Answer

A)   They affect skilled workers' wages.
B)   They create above-equilibrium wages for some unskilled workers.
C)   They create a shortage of unskilled labor.
D)   They negatively affect the employment of skilled workers.E) A) and D)
F) None of the above

Question 9

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

Question 10

A cutting-edge biotech firm is hiring recent college graduates. To attract the very best applicants and to increase worker effort the firm is paying a wage 20% higher than the market wage for entry level employees in this industry. What is the term for the wage paid in this example?

Accepted Answer

The answer of A cutting-edge biotech firm is hiring recent...

Question 11

Suppose that an employer can hire workers with brown hair and workers with blonde hair. Each type of worker has the same productivity. Which of the following is correct if the employer discriminates by hiring only workers with brown hair?

Accepted Answer

A)   The employer will be just as efficient as a nondiscriminating employer.
B)   The employer will face higher costs than firms that focus only on maximizing profits.
C)   The employer will immediately go out of business because discrimination is illegal.
D)   The employer will face union strikes.E) B) and C)
F) A) and D)

Question 12

According to the superstar phenomenon, the most talented person in which of the following occupations is most likely to earn extremely high wages?

Accepted Answer

A)   an electrician
B)   a hair stylist
C)   a journalist
D)   an engineerE) A) and B)
F) C) and D)

Question 13

Which of the following can be used to help explain wage differences among different groups of workers?

Accepted Answer

A)   human capital and compensating differentials
B)   human capital but not compensating differentials
C)   compensating differentials but not human capital
D)   neither human capital nor compensating differentialsE) A) and D)
F) B) and C)

Question 14

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. Competition in the market for haircuts is consistent with which of the following statements?

Accepted Answer

A)   Firms hiring nonbald barbers will have a cost advantage, leading to an increase in the demand for nonbald barbers.
B)   All firms that hire only bald barbers will go out of business.
C)   Firms hiring bald barbers will enter the market, increasing the demand for bald barbers.
D)   Firms hiring nonbald barbers will enter the market, increasing the demand for nonbald barbers.E) B) and C)
F) A) and D)

Question 15

Which of the following is an example of customer discrimination?

Accepted Answer

A)   A foreign government prevents women from legally working as teachers.
B)   White theater goers prefer to watch movies with white stars rather than black stars.
C)   Customers prefer more experienced lawyers over less experienced ones.
D)   All of the above are correct.E) B) and C)
F) A) and B)

Question 16

Differences in human capital among workers can often be attributed to social or political processes rather than economic processes.

Accepted Answer

A) True 
 B)False

Question 17

When employers sort employment applications into high-ability and low-ability people based on whether or not the applicant has a college degree (irrespective of major) , they are providing evidence in support of the

Accepted Answer

A)   human-capital theory of education.
B)   signaling theory of education.
C)   principle that education reduces marginal productivity.
D)   principle that most business owners are more interested in discriminating against a particular group than in maximizing profits.E) None of the above
F) All of the above

Question 18

Harry is 40 and black. Dan is 40 and white. Both work as plumbers, but Harry earns more.

Accepted Answer

A)   Dan is being discriminated against.
B)   Harry might be discriminated against if he has more experience as a plumber.
C)   Harry might be discriminated against if he has less training as a plumber.
D)   Harry might be discriminated against if he works the day shift and Dan works the night shift.E) B) and D)
F) A) and B)

Question 19

The most important type of human capital is

Accepted Answer

The answer of The most important type of human capital...

Question 20

In order to explain the changing gap in earnings between skilled and unskilled workers in recent years, economists have proposed two hypotheses. One hypothesis emphasizes

Accepted Answer

A)   compensating differentials.
B)   the increased recognition that a larger stock of human capital usually leads to higher earnings.
C)   the decreasing importance of labor unions.
D)   the increasing importance of international trade.E) C) and D)
F) None of the above

Exam 19: Earnings and Discrimination

Differences in human capital among workers can often be attributed to social or political processes rather than economic processes.

Correct Answer
verified

The "superstar" phenomenon can apply to which of these jobs?

Correct Answer
verified

Which of the following is true of minimum-wage laws?

Correct Answer
verified

In order to explain the changing gap in earnings between skilled and unskilled workers in recent years, economists have proposed two hypotheses. One hypothesis emphasizes

Correct Answer
verified

Correct Answer
verified

Empirical evidence suggests that ability, effort, and chance are not likely to be significant contributors to wage differences.

Correct Answer
verified

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

Correct Answer
verified

According to the superstar phenomenon, the most talented person in which of the following occupations is most likely to earn extremely high wages?

Correct Answer
verified

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

Correct Answer
verified

Which of the following is an example of customer discrimination?

Correct Answer
verified

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

Correct Answer
verified

Harry is 40 and black. Dan is 40 and white. Both work as plumbers, but Harry earns more.

Correct Answer
verified

Suppose that an employer can hire workers with brown hair and workers with blonde hair. Each type of worker has the same productivity. Which of the following is correct if the employer discriminates by hiring only workers with brown hair?

Correct Answer
verified

Which of the following is an example of discrimination in the labor market?

Correct Answer
verified

The most important type of human capital is

Correct Answer
verified

A cutting-edge biotech firm is hiring recent college graduates. To attract the very best applicants and to increase worker effort the firm is paying a wage 20% higher than the market wage for entry level employees in this industry. What is the term for the wage paid in this example?

Correct Answer
verified

"The customer is always right" explains

Correct Answer
verified

When employers sort employment applications into high-ability and low-ability people based on whether or not the applicant has a college degree (irrespective of major) , they are providing evidence in support of the

Correct Answer
verified

Effective minimum-wage laws will most likely

Correct Answer
verified

Which of the following can be used to help explain wage differences among different groups of workers?

Correct Answer
verified

Exam 19: Earnings and Discrimination

Differences in human capital among workers can often be attributed to social or political processes rather than economic processes.

Correct AnswerverifiedShow Answer

The "superstar" phenomenon can apply to which of these jobs?

Correct AnswerverifiedShow Answer

Which of the following is true of minimum-wage laws?

Correct AnswerverifiedShow Answer

In order to explain the changing gap in earnings between skilled and unskilled workers in recent years, economists have proposed two hypotheses. One hypothesis emphasizes

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Empirical evidence suggests that ability, effort, and chance are not likely to be significant contributors to wage differences.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

According to the superstar phenomenon, the most talented person in which of the following occupations is most likely to earn extremely high wages?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is an example of customer discrimination?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Harry is 40 and black. Dan is 40 and white. Both work as plumbers, but Harry earns more.

Correct AnswerverifiedShow Answer

Suppose that an employer can hire workers with brown hair and workers with blonde hair. Each type of worker has the same productivity. Which of the following is correct if the employer discriminates by hiring only workers with brown hair?

Correct AnswerverifiedShow Answer

Which of the following is an example of discrimination in the labor market?

Correct AnswerverifiedShow Answer

The most important type of human capital is

Correct AnswerverifiedShow Answer

A cutting-edge biotech firm is hiring recent college graduates. To attract the very best applicants and to increase worker effort the firm is paying a wage 20% higher than the market wage for entry level employees in this industry. What is the term for the wage paid in this example?

Correct AnswerverifiedShow Answer

"The customer is always right" explains

Correct AnswerverifiedShow Answer

When employers sort employment applications into high-ability and low-ability people based on whether or not the applicant has a college degree (irrespective of major) , they are providing evidence in support of the

Correct AnswerverifiedShow Answer

Effective minimum-wage laws will most likely

Correct AnswerverifiedShow Answer

Which of the following can be used to help explain wage differences among different groups of workers?

Correct AnswerverifiedShow Answer

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