Question 1

If a good is produced with technology that allows the best producer to supply every customer at a low cost and every customer in the market wants to enjoy the good supplied by the best producer, the best producer will be called a

Accepted Answer

The answer of If a good is produced with technology...

Question 2

Major league baseball players get paid more than minor league baseball players because of

Accepted Answer

A)   compensating differentials.
B)   higher levels of educational attainment.
C)   greater abilities.
D)   All of the above are correct.E) A) and C)
F) B) and C)

Question 3

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) B) and D)

Question 4

Some economists hypothesize that international trade has altered the relative demand for skilled and unskilled labor, changing the gap in earnings between these two groups. Which of the following statements best describes this hypothesis?

Accepted Answer

A)   Unskilled labor is plentiful and cheap in the US, so the US tends to export goods produced with unskilled labor and import goods produced with skilled labor.
B)   Unskilled labor is plentiful and cheap in many foreign countries, so the US tends to import goods produced with unskilled labor and export goods produced with skilled labor.
C)   Computers raise the demand for skilled workers and reduce the demand for the unskilled workers whose jobs are replaced by the computers.
D)   Greater demand for skilled labor has led to higher wages for those workers and greater demand for imported products.E) All of the above
F) C) and D)

Question 5

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

Question 6

By definition, there is discrimination when the marketplace offers different opportunities to similar individuals who differ only by

Accepted Answer

A)   race, ethnic group, sex, age, or other personal characteristics.
B)   qualifications, experience, or job preferences.
C)   levels of human capital.
D)   All of the above are correct.E) A) and C)
F) C) and D)

Question 7

In the country of Freedonia, men and women have the same level of education and choose different forms of work in the same proportions. The only real difference is that men typically stay home to raise young children, returning to the work force after their children enter elementary school. If no discrimination exists, then we would expect that, on average,

Accepted Answer

A)   women would earn less than men.
B)   women would earn more than men.
C)   men and women would earn the same wage.
D)   wage differences between men and women would be due to differences in beauty.E) All of the above
F) C) and D)

Question 8

The market wage could be higher than the equilibrium wage if a worker

Accepted Answer

A)   is a superstar.
B)   belongs to a labor union.
C)   has more human capital.
D)   All of the above are correct.E) All of the above
F) B) and D)

Question 9

Which of the following comparisons best illustrates a compensating differential?

Accepted Answer

A)   John's wage is higher than Jane's because the value of John's marginal product is higher than Jane's.
B)   Karl's wage is higher than Kay's because Karl is very personable, and Kay is very gruff.
C)   Beth's wage is higher than Bill's because Beth's job may cause long-term health problems, and Bill's job will not impair his health.
D)   All of the above are good illustrations of compensating differentials.E) B) and D)
F) None of the above

Question 10

Hunter is an ambitious, competitive person who has always tried to be the best at everything he does. Consider the following job options facing Hunter and choose the option that will likely afford him the highest wage.

Accepted Answer

A)   elementary school teacher who works 9 months of the year
B)   manager in a large firm who earns an annual salary with no potential for bonuses or commissions
C)   salesperson who earns a small base salary plus a percentage of the sales he makes
D)   local television news anchor who works during the dayE) A) and C)
F) A) and B)

Question 11

Other things equal, a particular job will likely pay a higher wage if it involves

Accepted Answer

A)   danger to the worker.
B)   personal enjoyment for the worker.
C)   intellectual stimulation for the worker.
D)   All of the above are correct.E) C) and D)
F) All of the above

Question 12

Studies of wages by labor economists indicate that measurable variables such as age, job characteristics, years of education, and years of experience account for

Accepted Answer

A)   virtually none of the variation in wages in our economy.
B)   some, but less than 50 percent of the variation in wages in our economy.
C)   about 75 percent of the variation in wages in our economy.
D)   almost all of the variation in wages in our economy.E) C) and D)
F) A) and B)

Question 13

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) A) and B)
F) None of the above

Question 14

The human-capital theory of education maintains that workers who complete specific levels of education enhance their productivity through education.

Accepted Answer

A) True 
 B)False

Question 15

Discrimination is a reflection of some people's prejudice against certain groups in society.

Accepted Answer

A) True 
 B)False

Question 16

Scenario 19-1
Ferris B., a student at a community college, is considering what he should do for summer employment. Two recruiters show up at his school in search of summer workers. Recruiter A is looking for lifeguards to patrol the beach at an exclusive island resort in the Caribbean. Recruiter B is looking for workers to staff positions at a summer youth camp.
-Refer to Scenario 19-1. Ferris is carefully considering the options that each recruiter presents. On the basis of knowledge obtained in his economics class, Ferris concludes that

Accepted Answer

A)   the lifeguard job will be more fun than the summer camp job, so the wage for that job will be higher than otherwise.
B)   if the summer camp job doesn't require any special skills, the wage for that job will be lower than otherwise.
C)   since the summer camp job requires some night shift work, the wage for that job will be lower than otherwise.
D)   All of the above are correct.E) A) and B)
F) None of the above

Question 17

The fact that doctors are paid more than economics professors is an example of a compensating differential.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following does not describe the hypothesis that changes in technology have altered the relative demand for skilled and unskilled labor?

Accepted Answer

A)   Firms rely more on computer databases than on paper filing systems so there is an increased demand for high-skilled computer programmers.
B)   Consumers can accomplish many simple banking tasks on an automated teller machine (ATM)  rather than speaking to a bank teller so there is a decreased demand for low- skilled bank tellers.
C)   Transponders in peoples' vehicles can be used to automatically deduct tolls from debit accounts, reducing the need for low-skilled toll collectors.
D)   Improvements in technology have made tax preparation software easy for an average citizen to use, reducing the need for high-skilled accountants.E) C) and D)
F) None of the above

Question 19

The signaling theory of education suggests that when people earn a college degree they do not become more productive, but they do signal their high ability to prospective employers.

Accepted Answer

A) True 
 B)False

Question 20

Jake and Harry each have 130 hours of college credit from Impressive University. Each has 30 hours of economics. Jake has a bachelor's degree, while Harry is 3 credits short of required physical education classes and therefore does not have a degree. Each of them has one year of experience as a market analyst for ABC Company. Assuming that the physical education class would not enhance Harry's job performance, if Jake earns a higher salary than Harry, the ABC Company may subscribe to the

Accepted Answer

A)   human capital theory.
B)   discrimination theory.
C)   compensating differential theory.
D)   signaling theory.E) C) and D)
F) A) and D)

Exam 19: Earnings and Discrimination

Discrimination is a reflection of some people's prejudice against certain groups in society.

Correct Answer
verified

Which of the following does not describe the hypothesis that changes in technology have altered the relative demand for skilled and unskilled labor?

Correct Answer
verified

Hunter is an ambitious, competitive person who has always tried to be the best at everything he does. Consider the following job options facing Hunter and choose the option that will likely afford him the highest wage.

Correct Answer
verified

The market wage could be higher than the equilibrium wage if a worker

Correct Answer
verified

Studies of wages by labor economists indicate that measurable variables such as age, job characteristics, years of education, and years of experience account for

Correct Answer
verified

Other things equal, a particular job will likely pay a higher wage if it involves

Correct Answer
verified

Which of the following comparisons best illustrates a compensating differential?

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

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

By definition, there is discrimination when the marketplace offers different opportunities to similar individuals who differ only by

Correct Answer
verified

The human-capital theory of education maintains that workers who complete specific levels of education enhance their productivity through education.

Correct Answer
verified

The signaling theory of education suggests that when people earn a college degree they do not become more productive, but they do signal their high ability to prospective employers.

Correct Answer
verified

Some economists hypothesize that international trade has altered the relative demand for skilled and unskilled labor, changing the gap in earnings between these two groups. Which of the following statements best describes this hypothesis?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Major league baseball players get paid more than minor league baseball players because of

Correct Answer
verified

If a good is produced with technology that allows the best producer to supply every customer at a low cost and every customer in the market wants to enjoy the good supplied by the best producer, the best producer will be called a

Correct Answer
verified

The fact that doctors are paid more than economics professors is an example of a compensating differential.

Correct Answer
verified

Exam 19: Earnings and Discrimination

Discrimination is a reflection of some people's prejudice against certain groups in society.

Correct AnswerverifiedShow Answer

Which of the following does not describe the hypothesis that changes in technology have altered the relative demand for skilled and unskilled labor?

Correct AnswerverifiedShow Answer

Hunter is an ambitious, competitive person who has always tried to be the best at everything he does. Consider the following job options facing Hunter and choose the option that will likely afford him the highest wage.

Correct AnswerverifiedShow Answer

The market wage could be higher than the equilibrium wage if a worker

Correct AnswerverifiedShow Answer

Studies of wages by labor economists indicate that measurable variables such as age, job characteristics, years of education, and years of experience account for

Correct AnswerverifiedShow Answer

Other things equal, a particular job will likely pay a higher wage if it involves

Correct AnswerverifiedShow Answer

Which of the following comparisons best illustrates a compensating differential?

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

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

By definition, there is discrimination when the marketplace offers different opportunities to similar individuals who differ only by

Correct AnswerverifiedShow Answer

The human-capital theory of education maintains that workers who complete specific levels of education enhance their productivity through education.

Correct AnswerverifiedShow Answer

The signaling theory of education suggests that when people earn a college degree they do not become more productive, but they do signal their high ability to prospective employers.

Correct AnswerverifiedShow Answer

Some economists hypothesize that international trade has altered the relative demand for skilled and unskilled labor, changing the gap in earnings between these two groups. Which of the following statements best describes this hypothesis?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Major league baseball players get paid more than minor league baseball players because of

Correct AnswerverifiedShow Answer

If a good is produced with technology that allows the best producer to supply every customer at a low cost and every customer in the market wants to enjoy the good supplied by the best producer, the best producer will be called a

Correct AnswerverifiedShow Answer

The fact that doctors are paid more than economics professors is an example of a compensating differential.

Correct AnswerverifiedShow Answer

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