Question 1

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. If some consumers in the market for haircuts have a strong preference for having their hair cut by a barber who is not going bald, then

Accepted Answer

A)   the difference in wages will eventually disappear since a haircut is a homogeneous good.
B)   barbershops that hire barbers with hair will be able to charge a higher price for a haircut to those consumers who have a strong preference for barbers with hair.
C)   barbershops that hire barbers with hair will always be much more profitable.
D)   barbershops that hire bald barbers will always be much more profitable.E) B) and C)
F) C) and D)

Question 2

Most wage differences can be understood while maintaining the assumption of equilibrium in the labor market. We deviate from that assumption, however, when we consider

Accepted Answer

A)   the superstar phenomenon.
B)   the theory of efficiency wages.
C)   compensating differentials.
D)   differences in educational attainment.E) A) and C)
F) A) and D)

Question 3

Regarding wage differences among various groups of workers - blacks and whites, men and women, etc. - most economists believe that

Accepted Answer

A)   no such differences are evident from the available data.
B)   most of the differences are attributable to discrimination.
C)   some of the wage differences are attributable to discrimination, but there is disagreement about how much.
D)   none of the differences are attributable to discrimination.E) B) and C)
F) A) and B)

Question 4

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

Question 5

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 C)
F) C) and D)

Question 6

The National Collegiate Athletic Association (NCAA) has long argued that nationally-prominent college athletes are compensated with an investment in human capital that far exceeds the monetary reward of playing professional sports. Examine this argument in light of your knowledge of human capital theory and the economic theory of labor markets.

Accepted Answer

Many economists would argue that the NCA...

Question 7

All differences in wages that are not accounted for by differences in human-capital investment are likely to be a result of discrimination.

Accepted Answer

A) True 
 B)False

Question 8

If people with blue eyes earn more than people with brown eyes, we have proof of discrimination against people with brown eyes.

Accepted Answer

A) True 
 B)False

Question 9

If there is systematic discrimination against a group of workers, then the wage paid to those workers likely will be

Accepted Answer

A)   lower due to a higher supply of workers in that group.
B)   lower due to a lower demand for workers in that group.
C)   higher due to a lower supply of workers in that group.
D)   higher due to a higher demand for workers in that group.E) B) and D)
F) A) and D)

Question 10

Human capital is

Accepted Answer

A)   an important determinant of wages, but it does not affect the production of goods and services.
B)   an important determinant of wages, and it affects the production of goods and services.
C)   a specific type of physical capital made by humans rather than machines.
D)   very different from physical capital in that physical capital represents an investment, while human capital does not represent an investment.E) B) and C)
F) All of the above

Exam 19: Earnings and Discrimination

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

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

Human capital is

Correct Answer
verified

All differences in wages that are not accounted for by differences in human-capital investment are likely to be a result of discrimination.

Correct Answer
verified

If people with blue eyes earn more than people with brown eyes, we have proof of discrimination against people with brown eyes.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Many economists would argue that the NCA...
View Answer

If there is systematic discrimination against a group of workers, then the wage paid to those workers likely will be

Correct Answer
verified

Most wage differences can be understood while maintaining the assumption of equilibrium in the labor market. We deviate from that assumption, however, when we consider

Correct Answer
verified

Regarding wage differences among various groups of workers - blacks and whites, men and women, etc. - most economists believe that

Correct Answer
verified

Exam 19: Earnings and Discrimination

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

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

Human capital is

Correct AnswerverifiedShow Answer

All differences in wages that are not accounted for by differences in human-capital investment are likely to be a result of discrimination.

Correct AnswerverifiedShow Answer

If people with blue eyes earn more than people with brown eyes, we have proof of discrimination against people with brown eyes.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedMany economists would argue that the NCA...View AnswerShow Answer

If there is systematic discrimination against a group of workers, then the wage paid to those workers likely will be

Correct AnswerverifiedShow Answer

Most wage differences can be understood while maintaining the assumption of equilibrium in the labor market. We deviate from that assumption, however, when we consider

Correct AnswerverifiedShow Answer

Regarding wage differences among various groups of workers - blacks and whites, men and women, etc. - most economists believe that

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Many economists would argue that the NCA...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified