Question 1

Which of the following is an example of compensating differentials affecting wages?

Accepted Answer

A)   a lawyer receiving a higher wage than a cleaner as the supply of lawyers is less than the supply of cleaners
B)   a highly educated civil engineer receiving a higher wage than his peers as she has a higher value of marginal product of labour
C)   a doctor foregoing $100 000 in income to volunteer in a developing country
D)   workers who work nightshift being paid the same as workers who work during the dayE) A) and C)
F) B) and C)

Question 2

On the basis of knowledge obtained in his economics class, Ferris is likely to conclude that:

Accepted Answer

A)   if the motel job also requires an ability to do general plumbing repairs, the wage offer will be low
B)   wages are unlikely to be affected by job requirements
C)   if the food distribution job has a requirement for special training or certification, this would tend to increase the wage offer
D)   since the food distribution job would expose him to the Ebola virus, the wage is likely to be lowE) A) and C)
F) B) and C)

Question 3

Wage differentials are often caused by differences in education, experience and the willingness to take on dangerous or unpleasant tasks by workers.

Accepted Answer

A) True 
 B)False

Question 4

Employers may discriminate because of asymmetric information about the quality of workers.

Accepted Answer

A) True 
 B)False

Question 5

Professional cricket players have very large differences in the salaries that is best explained by:

Accepted Answer

A)   chance
B)   the team the player is contracted to
C)   natural ability
D)   the number of sports cars the player ownsE) B) and C)
F) A) and B)

Question 6

Economists have proposed which of the following as contributing to the rising wage gap between skilled and unskilled workers?

Accepted Answer

A)   decreasing international trade
B)   technological improvements in capital stocks
C)   the increasing role of unions in setting skilled wage scales
D)   skilled workers are doing jobs that are increasingly dangerousE) B) and C)
F) C) and D)

Question 7

A compensating differential means that:

Accepted Answer

A)   a wage difference arises from different marginal productivities of labour
B)   workers that do similar work should be paid the same wage
C)   a wage difference arises from non-monetary characteristics of different jobs
D)   all of the aboveE) C) and D)
F) B) and C)

Question 8

Differences in wages between highly educated workers and less educated workers are most likely to be considered:

Accepted Answer

A)   unfair by all economists
B)   completely fair by everyone
C)   a compensating differential for the cost of becoming educated
D)   a signal that the market is indifferent to a worker's level of human capitalE) None of the above
F) A) and D)

Question 9

One of the reasons that movie stars have extraordinarily high incomes is that:

Accepted Answer

A)   movie stars do their own stunts
B)   technological advances in the movie industry have ceased
C)   even without makeup the average movie star is extraordinarily attractive
D)   almost everyone can enjoy movies at a low costE) A) and B)
F) A) and D)

Question 10

Even when university education in Australia was free, not everyone got a degree. Which of the following is one possible reason for why some people would get degrees while others would not?

Accepted Answer

A)   although free in a monetary sense getting a degree takes time and effort, the cost of which will be lower for high-skilled people than low-skilled people
B)   the human capital effects of university have been shown to be small, corresponding to only small increases in wages
C)   the benefits of education are likely to be higher for low-ability people than for high-ability, and so high-ability would not find it profitable to attend university
D)   none of the aboveE) A) and B)
F) A) and C)

Question 11

Workers with more human capital will always earn more than those with less human capital.

Accepted Answer

A) True 
 B)False

Question 12

If an employer believes that men are more likely to have a partner at home than women, they would be less risky to hire.

Accepted Answer

A) True 
 B)False

Question 13

Doppelsöldners were sixteenth century German soldiers (landsknechts) that received double pay for volunteering to fight in the front of their unit. This typically meant they were the first to engage the enemy. Assuming that their training and equipment was identical to other landsknechts, why were their wages so much higher?

Accepted Answer

This job was much more dangero...

Question 14

The theory of efficiency wages explains above-equilibrium wages by assuming that workers get a rise in wage when they prove they are increasing their productivity.

Accepted Answer

A) True 
 B)False

Question 15

Unions are analogous to monopolies insofar as that the only way to raise prices (wages) is to lower output (employment).

Accepted Answer

A) True 
 B)False

Question 16

It is increasingly clear that technological change, rather than international trade, has been largely responsible for an expanding wage gap between high-skill and low-skill workers.

Accepted Answer

A) True 
 B)False

Question 17

What are efficiency wages? Explain how they may make a firm more profitable.

Accepted Answer

Efficiency wages are above-equilibrium w...

Question 18

Comparable worth
In response to the gender gap, some states and countries have experimented with comparable worth regulations. This tries to close the wage gap by requiring employers to pay people doing jobs of comparable worth the same income. Hence, if firemen get paid more than librarians, but regulators deem that the jobs are of comparable wealth, then wages of librarians would have to rise to match firemen.
Advocates of comparable worth policies believe that compensating differentials do not explain differences in wages of men and women.
One potential critique this principle of comparable worth is that:

Accepted Answer

A)   workers are seldom discriminated against
B)   wage differences are unlikely to reflect differences in training or work experience
C)   if non-monetary aspects of a job are difficult to measure, establishing comparable worth will be harder
D)   wage differences are unlikely to reflect differences in risk or difficultyE) B) and D)
F) A) and D)

Question 19

Economists would argue that the gender wage gap is narrowing because of efficiency wages.

Accepted Answer

A) True 
 B)False

Question 20

Research engineers at GE (General Electric)  cannot publish their results nor claim credit for any discoveries they makes. Suppose GE has a change of policy and now allows their employees to publish academic articles and claim credit for their findings. This will lead to a shift in:

Accepted Answer

A)   the demand for labour curve up
B)   the demand for labour curve down
C)   the supply of labour curve left
D)   the supply of labour curve rightE) C) and D)
F) A) and D)

Exam 20: Earnings and Discrimination

Workers with more human capital will always earn more than those with less human capital.

Correct Answer
verified

Wage differentials are often caused by differences in education, experience and the willingness to take on dangerous or unpleasant tasks by workers.

Correct Answer
verified

Economists would argue that the gender wage gap is narrowing because of efficiency wages.

Correct Answer
verified

Professional cricket players have very large differences in the salaries that is best explained by:

Correct Answer
verified

If an employer believes that men are more likely to have a partner at home than women, they would be less risky to hire.

Correct Answer
verified

Research engineers at GE (General Electric) cannot publish their results nor claim credit for any discoveries they makes. Suppose GE has a change of policy and now allows their employees to publish academic articles and claim credit for their findings. This will lead to a shift in:

Correct Answer
verified

Which of the following is an example of compensating differentials affecting wages?

Correct Answer
verified

Correct Answer
verified

Even when university education in Australia was free, not everyone got a degree. Which of the following is one possible reason for why some people would get degrees while others would not?

Correct Answer
verified

Correct Answer
verified
This job was much more dangero...
View Answer

Employers may discriminate because of asymmetric information about the quality of workers.

Correct Answer
verified

Differences in wages between highly educated workers and less educated workers are most likely to be considered:

Correct Answer
verified

A compensating differential means that:

Correct Answer
verified

What are efficiency wages? Explain how they may make a firm more profitable.

Correct Answer
verified
Efficiency wages are above-equilibrium w...
View Answer

It is increasingly clear that technological change, rather than international trade, has been largely responsible for an expanding wage gap between high-skill and low-skill workers.

Correct Answer
verified

Economists have proposed which of the following as contributing to the rising wage gap between skilled and unskilled workers?

Correct Answer
verified

One of the reasons that movie stars have extraordinarily high incomes is that:

Correct Answer
verified

Unions are analogous to monopolies insofar as that the only way to raise prices (wages) is to lower output (employment).

Correct Answer
verified

The theory of efficiency wages explains above-equilibrium wages by assuming that workers get a rise in wage when they prove they are increasing their productivity.

Correct Answer
verified

On the basis of knowledge obtained in his economics class, Ferris is likely to conclude that:

Correct Answer
verified

Exam 20: Earnings and Discrimination

Workers with more human capital will always earn more than those with less human capital.

Correct AnswerverifiedShow Answer

Wage differentials are often caused by differences in education, experience and the willingness to take on dangerous or unpleasant tasks by workers.

Correct AnswerverifiedShow Answer

Economists would argue that the gender wage gap is narrowing because of efficiency wages.

Correct AnswerverifiedShow Answer

Professional cricket players have very large differences in the salaries that is best explained by:

Correct AnswerverifiedShow Answer

If an employer believes that men are more likely to have a partner at home than women, they would be less risky to hire.

Correct AnswerverifiedShow Answer

Research engineers at GE (General Electric) cannot publish their results nor claim credit for any discoveries they makes. Suppose GE has a change of policy and now allows their employees to publish academic articles and claim credit for their findings. This will lead to a shift in:

Correct AnswerverifiedShow Answer

Which of the following is an example of compensating differentials affecting wages?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Even when university education in Australia was free, not everyone got a degree. Which of the following is one possible reason for why some people would get degrees while others would not?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThis job was much more dangero...View AnswerShow Answer

Employers may discriminate because of asymmetric information about the quality of workers.

Correct AnswerverifiedShow Answer

Differences in wages between highly educated workers and less educated workers are most likely to be considered:

Correct AnswerverifiedShow Answer

A compensating differential means that:

Correct AnswerverifiedShow Answer

What are efficiency wages? Explain how they may make a firm more profitable.

Correct AnswerverifiedEfficiency wages are above-equilibrium w...View AnswerShow Answer

It is increasingly clear that technological change, rather than international trade, has been largely responsible for an expanding wage gap between high-skill and low-skill workers.

Correct AnswerverifiedShow Answer

Economists have proposed which of the following as contributing to the rising wage gap between skilled and unskilled workers?

Correct AnswerverifiedShow Answer

One of the reasons that movie stars have extraordinarily high incomes is that:

Correct AnswerverifiedShow Answer

Unions are analogous to monopolies insofar as that the only way to raise prices (wages) is to lower output (employment).

Correct AnswerverifiedShow Answer

The theory of efficiency wages explains above-equilibrium wages by assuming that workers get a rise in wage when they prove they are increasing their productivity.

Correct AnswerverifiedShow Answer

On the basis of knowledge obtained in his economics class, Ferris is likely to conclude that:

Correct AnswerverifiedShow Answer

Correct Answer
verified

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
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
This job was much more dangero...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Efficiency wages are above-equilibrium w...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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