Question 1

Table 19-1  Source: US Census Bureau and Mankiw's calculations
-Refer to Table 19-1. From 1975 to 2011, the salary gap among women who graduate from college compared to those who complete only high school

Accepted Answer

A)  increased by 35% while the salary gap among men increased by 42%.
B)  more than doubled while the salary gap among men rose significantly but less than doubled.
C)  increased, but the salary gap among men decreased.
D)  decreased, but the salary gap among men increased.E) All of the above
F) B) and C)

Question 2

A worker association that bargains with employers over wages and working conditions is called

Accepted Answer

A)  a strike.
B)  an oligopoly.
C)  a firm.
D)  a union.E) A) and B)
F) B) and C)

Question 3

Jake and Zach are identical twins who attended grammar school through college together. Jake took a job as an engineer who does not have to travel out of the state. Zach took a job as an engineer who must travel out of state once a week. Jake earns $125,000 a year, and Zach earns $155,000 a year. Select the best explanation for this wage difference.

Accepted Answer

A)  Zach puts in less effort than Jake.
B)  Zach has less human capital than Jake.
C)  Zach receives a higher wage to compensate for the disagreeable nature of business travel.
D)  Jake's lower salary supports the signaling theory of education.E) A) and B)
F) C) and D)

Question 4

A study using data from the late 1960s showed that black baseball players earned less than comparable white players. Studies of more recent salaries in baseball, however, have found no evidence of discriminatory wage differentials.

Accepted Answer

A) True 
 B)False

Question 5

Table 19-1  Source: US Census Bureau and Mankiw's calculations
-Refer to Table 19-1. Economists suspect that the increase in the earnings gap between skilled and unskilled workers is likely due to

Accepted Answer

A)  an increase in the demand for skilled labor relative to the demand for unskilled labor.
B)  an increase in international trade.
C)  improvements in technology.
D)  All of the above are correct.E) B) and C)
F) None of the above

Question 6

Philip is an average contractor in town, and he earns $40,000 a year. Billy is the best contractor in town, and he earns $480,000 a year. Philip's contracting services

Accepted Answer

A)  are valued more by the market relative to Billy's and that explains why his income is higher than Billy's.
B)  are valued less by the market relative to Billy's and that explains why his income is higher than Billy's.
C)  are valued less by the market relative to Billy's and that explains why his income is lower than Billy's.
D)  are more expensive because he receives a compensating differential.E) A) and B)
F) None of the above

Question 7

Discrimination is usually not a profit-maximizing strategy.

Accepted Answer

A) True 
 B)False

Question 8

Profit-maximizing, competitive firms will not discriminate in the hiring of workers unless consumers exercise a preference for discrimination in product markets or governments mandate discrimination.

Accepted Answer

A) True 
 B)False

Question 9

Other things the same, we'd expect that a job with less pleasant working conditions pays

Accepted Answer

A)  more; this is known as an efficiency wage.
B)  more; this is known as a compensating differential.
C)  less; this is known as an efficiency wage.
D)  less; this is known as a compensating differential.E) All of the above
F) None of the above

Question 10

Which of the following is an example of human capital?

Accepted Answer

A)  Machines built by people.
B)  Formal education acquired in schools.
C)  On-the-job training.
D)  Both b and c are correct.E) All of the above
F) A) and B)

Question 11

Workers who work the night shift are often paid more than those who do identical work on the day shift. This is referred to as a

Accepted Answer

A)  discriminatory wage practice.
B)  compensating differential.
C)  wage inequity.
D)  a market inefficiency.E) A) and B)
F) A) and C)

Question 12

Which of the following might explain the beauty premium found by labor economists Hamermesh and Biddle?

Accepted Answer

A)  Good looks are an innate ability for some jobs, which results in higher productivity and higher wages.
B)  Good looks may be an indirect measure of other types of ability such as attention to detail.
C)  If better-looking people earn more than average-looking people, employers may be discriminating based on personal appearance.
D)  All of the above could explain the beauty premium.E) All of the above
F) A) and B)

Question 13

When employers pay an efficiency wage above the market equilibrium wage, this will likely result in

Accepted Answer

A)  a surplus of labor.
B)  no unemployment.
C)  an increase in the number of people employed.
D)  an decrease in the quantity of labor supplied.E) A) and B)
F) A) and C)

Question 14

Job A is hard, dull, and dangerous. Job B is easy, fun, and safe. All else equal, we would expect Job A to pay

Accepted Answer

A)  higher wages than Job B because the labor supplied for Job B will be greater.
B)  lower wages than Job B because the labor supplied for Job B will be greater.
C)  higher wages than Job B because the labor supplied for Job A will be greater.
D)  lower wages than Job B because the labor supplied for Job A will be greater.E) A) and C)
F) All of the above

Question 15

On average, electricians who work on dangerous high-voltage power lines earn more per hour than similarly skilled electricians who don't work on dangerous high-voltage power lines. The difference in pay is attributed to

Accepted Answer

A)  the marginal product of labor.
B)  the marginal product of capital.
C)  diminishing marginal returns.
D)  a compensating differential.E) C) and D)
F) A) and D)

Question 16

Which of the following statements represents the idea behind signaling in education?

Accepted Answer

A)  Education can turn an unproductive person into a productive person.
B)  Education increases the marginal productivity of naturally productive workers.
C)  More productive people are more inclined to educate themselves.
D)  All of the above are correct.E) B) and D)
F) A) and B)

Question 17

The profit motive counteracts

Accepted Answer

A)  consumer discrimination.
B)  discrimination in sports.
C)  the beauty premium.
D)  None of the above is correct.E) B) and D)
F) A) and B)

Question 18

Efficiency wages may decrease employee turnover.

Accepted Answer

A) True 
 B)False

Question 19

Over the past 30 years, the number of jobs in the United States requiring skilled labor has been declining as foreign countries steal these jobs away from the U.S. As a result, the domestic demand for skilled labor has been falling and the wage gap between skilled and unskilled labor has been narrowing.

Accepted Answer

A) True 
 B)False

Question 20

The Asian Development Bank has been investing in education and training programs in the developing economies of Asia over the last five years. As a result of this investment, economists who adhere to the human capital view of education would predict

Accepted Answer

A)  rising wages as labor productivity is enhanced.
B)  falling wages as the labor market is saturated with too many educated workers.
C)  the marginal productivity of capital would not be affected.
D)  the marginal productivity of labor would not be affected.E) B) and D)
F) B) and C)

Exam 19: Earnings and Discrimination

Workers who work the night shift are often paid more than those who do identical work on the day shift. This is referred to as a

Correct Answer
verified

Which of the following statements represents the idea behind signaling in education?

Correct Answer
verified

Correct Answer
verified

Which of the following is an example of human capital?

Correct Answer
verified

When employers pay an efficiency wage above the market equilibrium wage, this will likely result in

Correct Answer
verified

The profit motive counteracts

Correct Answer
verified

Table 19-1 Source: US Census Bureau and Mankiw's calculations -Refer to Table 19-1. Economists suspect that the increase in the earnings gap between skilled and unskilled workers is likely due to

Correct Answer
verified

A worker association that bargains with employers over wages and working conditions is called

Correct Answer
verified

Correct Answer
verified

A study using data from the late 1960s showed that black baseball players earned less than comparable white players. Studies of more recent salaries in baseball, however, have found no evidence of discriminatory wage differentials.

Correct Answer
verified

Discrimination is usually not a profit-maximizing strategy.

Correct Answer
verified

Profit-maximizing, competitive firms will not discriminate in the hiring of workers unless consumers exercise a preference for discrimination in product markets or governments mandate discrimination.

Correct Answer
verified

Table 19-1 Source: US Census Bureau and Mankiw's calculations -Refer to Table 19-1. From 1975 to 2011, the salary gap among women who graduate from college compared to those who complete only high school

Correct Answer
verified

Efficiency wages may decrease employee turnover.

Correct Answer
verified

Philip is an average contractor in town, and he earns $40,000 a year. Billy is the best contractor in town, and he earns $480,000 a year. Philip's contracting services

Correct Answer
verified

Other things the same, we'd expect that a job with less pleasant working conditions pays

Correct Answer
verified

Which of the following might explain the beauty premium found by labor economists Hamermesh and Biddle?

Correct Answer
verified

On average, electricians who work on dangerous high-voltage power lines earn more per hour than similarly skilled electricians who don't work on dangerous high-voltage power lines. The difference in pay is attributed to

Correct Answer
verified

Job A is hard, dull, and dangerous. Job B is easy, fun, and safe. All else equal, we would expect Job A to pay

Correct Answer
verified

The Asian Development Bank has been investing in education and training programs in the developing economies of Asia over the last five years. As a result of this investment, economists who adhere to the human capital view of education would predict

Correct Answer
verified

Exam 19: Earnings and Discrimination

Workers who work the night shift are often paid more than those who do identical work on the day shift. This is referred to as a

Correct AnswerverifiedShow Answer

Which of the following statements represents the idea behind signaling in education?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is an example of human capital?

Correct AnswerverifiedShow Answer

When employers pay an efficiency wage above the market equilibrium wage, this will likely result in

Correct AnswerverifiedShow Answer

The profit motive counteracts

Correct AnswerverifiedShow Answer

Table 19-1 Source: US Census Bureau and Mankiw's calculations -Refer to Table 19-1. Economists suspect that the increase in the earnings gap between skilled and unskilled workers is likely due to

Correct AnswerverifiedShow Answer

A worker association that bargains with employers over wages and working conditions is called

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A study using data from the late 1960s showed that black baseball players earned less than comparable white players. Studies of more recent salaries in baseball, however, have found no evidence of discriminatory wage differentials.

Correct AnswerverifiedShow Answer

Discrimination is usually not a profit-maximizing strategy.

Correct AnswerverifiedShow Answer

Profit-maximizing, competitive firms will not discriminate in the hiring of workers unless consumers exercise a preference for discrimination in product markets or governments mandate discrimination.

Correct AnswerverifiedShow Answer

Table 19-1 Source: US Census Bureau and Mankiw's calculations -Refer to Table 19-1. From 1975 to 2011, the salary gap among women who graduate from college compared to those who complete only high school

Correct AnswerverifiedShow Answer

Efficiency wages may decrease employee turnover.

Correct AnswerverifiedShow Answer

Philip is an average contractor in town, and he earns $40,000 a year. Billy is the best contractor in town, and he earns $480,000 a year. Philip's contracting services

Correct AnswerverifiedShow Answer

Other things the same, we'd expect that a job with less pleasant working conditions pays

Correct AnswerverifiedShow Answer

Which of the following might explain the beauty premium found by labor economists Hamermesh and Biddle?

Correct AnswerverifiedShow Answer

On average, electricians who work on dangerous high-voltage power lines earn more per hour than similarly skilled electricians who don't work on dangerous high-voltage power lines. The difference in pay is attributed to

Correct AnswerverifiedShow Answer

Job A is hard, dull, and dangerous. Job B is easy, fun, and safe. All else equal, we would expect Job A to pay

Correct AnswerverifiedShow Answer

The Asian Development Bank has been investing in education and training programs in the developing economies of Asia over the last five years. As a result of this investment, economists who adhere to the human capital view of education would predict

Correct AnswerverifiedShow Answer

Correct Answer
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