Question 1

Which of the following statements is not correct?

Accepted Answer

A)   Both the human capital theory and the signaling theory of education could explain why college graduates earn more than high school graduates.
B)   The signaling theory of education suggests that the ability to complete a college degree is correlated with the ability to perform well in the labor market.
C)   If the human capital theory of education is correct, a government policy that pays for additional schooling for all workers would not increase wages.
D)   If the signaling theory of education is correct, a government policy that pays for additional schooling for all workers would not increase wages.E) A) and D)
F) All of the above

Question 2

Evidence from a study of the market for baseball players using 1960s data

Accepted Answer

A)   indicated that sports with strong player associations are unlikely to experience wage discrimination.
B)   suggested that government regulation had eliminated most evidence of wage discrimination.
C)   found some evidence of consumer-driven wage discrimination.
D)   found that measurement of marginal productivity was very difficult for baseball players.E) C) and D)
F) All of the above

Question 3

Sometimes wages are set above the equilibrium level when firms pay

Accepted Answer

A)   workers with more seniority higher wages than newly-hired workers.
B)   efficiency wages to reduce turnover.
C)   compensating differentials to workers who work the night shift.
D)   more attractive salespeople higher wages than less attractive salespeople.E) A) and D)
F) None of the above

Question 4

The wage gap between skilled and unskilled worker has

Accepted Answer

A)   risen; economists argue that this may be due in part to technological progress.
B)   risen; economists argue that none of the rise is due to technological progress.
C)   fallen; economists argue that this may be due in part to technological progress.
D)   fallen; economists argue that none of the fall is due to technological progress.E) C) and D)
F) A) and B)

Question 5

Dan and Dave are both college graduates. Dan is a patrolman and Dave is a detective in the same police precinct. While Dan's job is inherently more dangerous than Dave's, Dave passed a difficult exam to gain promotion to detective. Dave earns more than Dan because

Accepted Answer

A)   Dave's job is less dangerous.
B)   of efficiency wages.
C)   of education as a signal.
D)   Dave has more human capital.E) C) and D)
F) A) and B)

Question 6

James earns a degree from a top university and is hired by a prominent firm because executives at the firm believe that graduates of this university must have a high ability level or they would not have graduated. Which of the following theories of education do the executives believe?

Accepted Answer

A)   signaling theory
B)   human-capital theory
C)   compensating-differentials theory
D)   All of the above are correct.E) None of the above
F) All of the above

Question 7

It is likely that efficiency wages will decrease employee effort.

Accepted Answer

A) True 
 B)False

Question 8

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) C) and D)

Question 9

Dr. Benson is regarded as, by far, the best dentist in his part of the country, yet his income is not significantly higher than the average income for a dentist in his area. In contrast, Bo Johnson, the best baseball player in that region, earns five times the average salary of all baseball players. The most likely explanation is that

Accepted Answer

A)   the widespread perception that Dr. Benson is a great dentist is, in fact, incorrect.
B)   the baseball players' union is more powerful than the professional association of dentists.
C)   Bo Johnson, unlike Dr. Benson, can provide his services to millions of people simultaneously.
D)   chance plays a role in determining people's incomes, resulting in earnings discrepancies that are hard to explain or justify.E) All of the above
F) C) and D)

Question 10

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 11

In the early 20th century, segregation of street cars made streetcar companies

Accepted Answer

A)   more profitable and was supported by private streetcar companies.
B)   more profitable but was opposed by private streetcar companies.
C)   less profitable but was supported by private streetcar companies.
D)   less profitable and was opposed by private streetcar companies.E) A) and D)
F) B) and D)

Question 12

The wage difference between jobs that require education and those that don't

Accepted Answer

A)   is not likely to be related to productivity differences.
B)   is a barrier to obtaining an education.
C)   does not affect the supply of workers in the different labor markets.
D)   encourages workers to bear the cost of acquiring education.E) C) and D)
F) A) and B)

Question 13

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

Question 14

Explain how compensating differentials could contribute to differences between the average wages of men and women.

Accepted Answer

Men and women may, on average, select di...

Question 15

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

Question 16

One reason why better-looking workers may have higher earnings is that physical attractiveness is correlated with intelligence.

Accepted Answer

A) True 
 B)False

Question 17

Differences in human capital among groups of workers is possibly a reflection of past discrimination.

Accepted Answer

A) True 
 B)False

Question 18

Figure 19-6 
-Refer to Figure 19-6. Given demand, D1, and supply, S1, if wages adjust to balance labor supply and labor demand, what are the wage and quantity of labor?

Accepted Answer

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

Question 19

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) C) and D)

Question 20

A difference in wages that reflects differences in the nonpay features of two jobs is called

Accepted Answer

A)   a compensating differential.
B)   a wage adjustment.
C)   an efficiency wage.
D)   a minimum wage.E) B) and C)
F) B) and D)

Exam 19: Earnings and Discrimination

Figure 19-6 -Refer to Figure 19-6. Given demand, D1, and supply, S1, if wages adjust to balance labor supply and labor demand, what are the wage and quantity of labor?

Correct Answer
verified

Evidence from a study of the market for baseball players using 1960s data

Correct Answer
verified

Which of the following statements is not correct?

Correct Answer
verified

The time spent by students in college

Correct Answer
verified

It is likely that efficiency wages will decrease employee effort.

Correct Answer
verified

Dan and Dave are both college graduates. Dan is a patrolman and Dave is a detective in the same police precinct. While Dan's job is inherently more dangerous than Dave's, Dave passed a difficult exam to gain promotion to detective. Dave earns more than Dan because

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

James earns a degree from a top university and is hired by a prominent firm because executives at the firm believe that graduates of this university must have a high ability level or they would not have graduated. Which of the following theories of education do the executives believe?

Correct Answer
verified

A difference in wages that reflects differences in the nonpay features of two jobs is called

Correct Answer
verified

One reason why better-looking workers may have higher earnings is that physical attractiveness is correlated with intelligence.

Correct Answer
verified

Explain how compensating differentials could contribute to differences between the average wages of men and women.

Correct Answer
verified
Men and women may, on average, select di...
View Answer

The wage difference between jobs that require education and those that don't

Correct Answer
verified

A union's major source of power is its

Correct Answer
verified

Sometimes wages are set above the equilibrium level when firms pay

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

In the early 20th century, segregation of street cars made streetcar companies

Correct Answer
verified

The wage gap between skilled and unskilled worker has

Correct Answer
verified

Differences in human capital among groups of workers is possibly a reflection of past discrimination.

Correct Answer
verified

Exam 19: Earnings and Discrimination

Figure 19-6 -Refer to Figure 19-6. Given demand, D1, and supply, S1, if wages adjust to balance labor supply and labor demand, what are the wage and quantity of labor?

Correct AnswerverifiedShow Answer

Evidence from a study of the market for baseball players using 1960s data

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

The time spent by students in college

Correct AnswerverifiedShow Answer

It is likely that efficiency wages will decrease employee effort.

Correct AnswerverifiedShow Answer

Dan and Dave are both college graduates. Dan is a patrolman and Dave is a detective in the same police precinct. While Dan's job is inherently more dangerous than Dave's, Dave passed a difficult exam to gain promotion to detective. Dave earns more than Dan because

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

James earns a degree from a top university and is hired by a prominent firm because executives at the firm believe that graduates of this university must have a high ability level or they would not have graduated. Which of the following theories of education do the executives believe?

Correct AnswerverifiedShow Answer

A difference in wages that reflects differences in the nonpay features of two jobs is called

Correct AnswerverifiedShow Answer

One reason why better-looking workers may have higher earnings is that physical attractiveness is correlated with intelligence.

Correct AnswerverifiedShow Answer

Explain how compensating differentials could contribute to differences between the average wages of men and women.

Correct AnswerverifiedMen and women may, on average, select di...View AnswerShow Answer

The wage difference between jobs that require education and those that don't

Correct AnswerverifiedShow Answer

A union's major source of power is its

Correct AnswerverifiedShow Answer

Sometimes wages are set above the equilibrium level when firms pay

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

In the early 20th century, segregation of street cars made streetcar companies

Correct AnswerverifiedShow Answer

The wage gap between skilled and unskilled worker has

Correct AnswerverifiedShow Answer

Differences in human capital among groups of workers is possibly a reflection of past discrimination.

Correct AnswerverifiedShow Answer

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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Men and women may, on average, select di...
View Answer

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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Correct Answer
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