Question 1

Why is a construction worker never likely to earn as much as a famous athlete?

Accepted Answer

A)  Compensating differentials create a higher wage for professional athletes.
B)  Technological progress has advanced less in the construction industry then in sports training.
C)  Productivity levels are low in the construction industry due to the high number of people willing to be construction workers.
D)  A construction worker can provide his services to only a limited number of customers.E) All of the above
F) B) and C)

Question 2

Figure 19-5 
-Refer to Figure 19-5. Given demand for labor, D1, and supply of labor, S2, which of the following could be considered an efficiency wage?

Accepted Answer

A)  $4
B)  $5
C)  $6
D)  $7E) A) and C)
F) B) and D)

Question 3

The wage gap between skilled and unskilled worker has

Accepted Answer

A)  risen; some economists argue that this is partly due to increased international trade.
B)  risen; some economists argue that this is partly due to decreased international trade.
C)  fallen; some economists argue that this is partly due to increased international trade.
D)  fallen; some economists argue that this is partly due to decreased international trade.E) B) and C)
F) A) and D)

Question 4

Which of the following is an example of a compensating differential?

Accepted Answer

A)  Two workers with different undergraduate majors earn different salaries.
B)  Two workers with different years of experience earn different salaries.
C)  Two workers whose jobs entail different risks earn different salaries.
D)  Two workers with different levels of personal attractiveness earn different salaries.E) B) and D)
F) B) and C)

Question 5

If the signaling theory of education is correct,

Accepted Answer

A)  education increases productivity and educated workers are paid more.
B)  education increases productivity but educated workers are not paid more.
C)  education does not increase productivity but educated workers earn more.
D)  education does not increase productivity and educated workers do not earn moreE) A) and B)
F) A) and C)

Question 6

List the productivity factors that may explain the differences in pay between men and women in similar occupations. Do any of these factors arise as a result of cultural or social traditions? If so, describe how changes in social relationships will affect the pay gap over time.

Accepted Answer

Job experience, education, lif...

Question 7

Jobs that involve pleasant work, as opposed to jobs that involve unpleasant work, usually pay

Accepted Answer

A)  higher wages, because jobs that involve pleasant work typically require more education than do jobs that involve unpleasant work.
B)  higher wages, because jobs that involve pleasant work typically require more well-developed personality skills than do jobs that involve unpleasant work.
C)  lower wages, because workers typically are not attracted to jobs that involve unpleasant work unless there is a monetary inducement.
D)  lower wages, because workers who take jobs that involve unpleasant work typically stay in those jobs for relatively long periods of time and accumulate significant experience.E) A) and D)
F) B) and D)

Question 8

When robots are used to replace workers on a factory production line, the wage gap between skilled and unskilled workers

Accepted Answer

A)  will increase only if the company can increase the price of its product.
B)  is likely to increase.
C)  is likely to decrease.
D)  will not change.E) A) and B)
F) None of the above

Question 9

The difference in wages that results from nonmonetary characteristics of different jobs is called the

Accepted Answer

compensati...

Question 10

If an older worker earns less than a younger worker for the same job, we have proof of age discrimination.

Accepted Answer

A) True 
 B)False

Question 11

When employers sort employment applications into high-ability and low-ability people based on whether or not the applicant has a college degree (irrespective of major) , they are providing evidence in support of the

Accepted Answer

A)  human-capital theory of education.
B)  signaling theory of education.
C)  principle that education reduces marginal productivity.
D)  principle that most business owners are more interested in discriminating against a particular group than in maximizing profits.E) All of the above
F) A) and B)

Question 12

Which of these instances would constitute labor-market discrimination? Henry receives a higher wage than Ryan. Henry and Ryan are identical in all of their labor-market characteristics except that

Accepted Answer

A)  Henry is a college graduate, and Ryan has only a high school diploma.
B)  Henry has 10 years of experience at his job, whereas Ryan has only five years of experience.
C)  Henry is white and Ryan is Black.
D)  by objective measures Henry consistently outperforms Ryan.E) All of the above
F) A) and B)

Question 13

Evaluate the following statement: "The gender pay gap provides evidence of widespread, severe, ongoing discrimination by employers and fellow workers."

Accepted Answer

There are many explanations of the gende...

Question 14

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

Question 15

Economists who study labor markets have documented

Accepted Answer

A)  a general decline in the wages of college graduates over the last decade.
B)  an increasing trend in U.S. labor markets for employers to pay all costs of education and training.
C)  a decrease in the earnings gap between low-skill and high-skill workers over the past two decades.
D)  an increase in the earnings gap between low-skill and high-skill workers over the past two decades.E) A) and D)
F) A) and C)

Question 16

When comparing the salaries of a superstar CPA and a superstar golfer,

Accepted Answer

A)  both can earn tremendously high salaries because both can meet with millions of clients.
B)  the superstar CPA will not earn as much as the superstar golfer because superstar accountants do not have access to the same sophisticated technologies that superstar golfers do.
C)  the superstar CPA will not earn as much as the superstar golfer because a superstar accountant can only work with a limited number of clients per day, whereas millions of fans can enjoy the services provided by a superstar golfer on a given day by watching a televised tournament.
D)  the superstar CPA will not earn as much as the superstar golfer because customers are unable to distinguish superstar accountant from a mediocre accountant.E) A) and D)
F) All of the above

Question 17

Figure 19-6​ 
-Refer to Figure 19-6. This figure depicts labor demand and supply for the widget industry. The market equilibrium wage is $15. If the minimum wage in the economy is $10, how many hours of labor will be demanded from firms in the widget industry?

Accepted Answer

A)  0
B)  10
C)  60
D)  90E) A) and B)
F) None of the above

Question 18

One hypothesis to explain the changing gap in wages between unskilled and skilled workers in the United States is that international trade has altered the relative demands for skilled and unskilled workers.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following moves the wage above its equilibrium value?

Accepted Answer

A)  both compensating differentials and efficiency wages
B)  compensating differentials but not efficiency wages
C)  efficiency wages but not compensating differentials
D)  neither compensating differentials nor efficiency wagesE) None of the above
F) A) and D)

Question 20

Artie and Angelina attended the same university, graduated with the same degree and grade point average, and are equally productive in their identical new jobs. Still, Angelina's salary is 10% lower than Artie's salary. One can conclude that Angelina likely suffers from

Accepted Answer

The answer of Artie and Angelina attended the same university,...

Exam 19: Earnings and Discrimination

List the productivity factors that may explain the differences in pay between men and women in similar occupations. Do any of these factors arise as a result of cultural or social traditions? If so, describe how changes in social relationships will affect the pay gap over time.

Correct AnswerverifiedJob experience, education, lif...View AnswerShow Answer

If an older worker earns less than a younger worker for the same job, we have proof of age discrimination.

Correct AnswerverifiedShow Answer

When comparing the salaries of a superstar CPA and a superstar golfer,

Correct AnswerverifiedShow Answer

Which of the following moves the wage above its equilibrium value?

Correct AnswerverifiedShow Answer

One hypothesis to explain the changing gap in wages between unskilled and skilled workers in the United States is that international trade has altered the relative demands for skilled and unskilled workers.

Correct AnswerverifiedShow Answer

Economists who study labor markets have documented

Correct AnswerverifiedShow Answer

Which of these instances would constitute labor-market discrimination? Henry receives a higher wage than Ryan. Henry and Ryan are identical in all of their labor-market characteristics except that

Correct AnswerverifiedShow Answer

Figure 19-6​ -Refer to Figure 19-6. This figure depicts labor demand and supply for the widget industry. The market equilibrium wage is $15. If the minimum wage in the economy is $10, how many hours of labor will be demanded from firms in the widget industry?

Correct AnswerverifiedShow Answer

Figure 19-5 -Refer to Figure 19-5. Given demand for labor, D1, and supply of labor, S2, which of the following could be considered an efficiency wage?

Correct AnswerverifiedShow Answer

The time spent by students in college

Correct AnswerverifiedShow Answer

Why is a construction worker never likely to earn as much as a famous athlete?

Correct AnswerverifiedShow Answer

Evaluate the following statement: "The gender pay gap provides evidence of widespread, severe, ongoing discrimination by employers and fellow workers."

Correct AnswerverifiedThere are many explanations of the gende...View AnswerShow Answer

If the signaling theory of education is correct,

Correct AnswerverifiedShow Answer

The wage gap between skilled and unskilled worker has

Correct AnswerverifiedShow Answer

Artie and Angelina attended the same university, graduated with the same degree and grade point average, and are equally productive in their identical new jobs. Still, Angelina's salary is 10% lower than Artie's salary. One can conclude that Angelina likely suffers from

Correct AnswerverifiedShow Answer

The difference in wages that results from nonmonetary characteristics of different jobs is called the

Correct Answerverifiedcompensati...View AnswerShow Answer

When employers sort employment applications into high-ability and low-ability people based on whether or not the applicant has a college degree (irrespective of major) , they are providing evidence in support of the

Correct AnswerverifiedShow Answer

Which of the following is an example of a compensating differential?

Correct AnswerverifiedShow Answer

Jobs that involve pleasant work, as opposed to jobs that involve unpleasant work, usually pay

Correct AnswerverifiedShow Answer

When robots are used to replace workers on a factory production line, the wage gap between skilled and unskilled workers

Correct AnswerverifiedShow Answer

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Job experience, education, lif...
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Figure 19-6 -Refer to Figure 19-6. This figure depicts labor demand and supply for the widget industry. The market equilibrium wage is $15. If the minimum wage in the economy is $10, how many hours of labor will be demanded from firms in the widget industry?

Correct Answer
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There are many explanations of the gende...
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compensati...
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