Question 1

Economists who study labour markets have discovered that:

Accepted Answer

A)  only about five per cent of wage differences are related to chance
B)  ability, effort and chance are likely to be significant contributors to wage differences
C)  ability is not difficult to measure, but is largely insignificant in explaining wage differences
D)  work effort is difficult to measure, but is not likely to contribute much to an explanation of wage differencesE) A) and B)
F) None of the above

Question 2

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

Accepted Answer

A)  if the lifeguard job also requires a willingness to clean public restrooms, the wage offer will be lower than otherwise
B)  if the lifeguard job has a requirement for special training or certification, this would tend to increase the wage offer
C)  wages are unlikely to be affected by job requirements
D)  since the lifeguard job would expose him to skin cancer, the wage is likely to be lowE) C) and D)
F) A) and C)

Question 3

Given that workers differ in terms of ability and effort, firms are likely to pay people different wages even in the absence of discrimination.

Accepted Answer

A) True 
 B)False

Question 4

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) C) and D)
F) All of the above

Question 5

When workers form a labour union, the result will likely be which of the following?
(i)  an increased demand for labour
(ii)  a surplus of labour
(iii)  increased unemployment

Accepted Answer

A)  (i)  and (ii) 
B)  (ii)  and (iii) 
C)  (i)  and (iii) 
D)  (i) , (ii)  and (iii) E) B) and C)
F) A) and B)

Question 6

For a given wage, which of the following statements is true?

Accepted Answer

A)  the supply of labour for easy jobs exceeds that for difficult jobs
B)  the supply of labour for fun jobs exceeds that for dull jobs
C)  the supply of labour for safe jobs exceeds that for dangerous jobs
D)  all of the aboveE) B) and C)
F) A) and D)

Question 7

Who do you think would be paid more? Michael Clarke, one of Australia's best cricketers, or a highly-educated rural GP doctor? (Note: there is no right answer; looking for discussion of factors that influence wages)

Accepted Answer

a GP doctor commands a high wage as he/s...

Question 8

Business firms that pay salespeople a percentage of the sales they make are attempting to reward:

Accepted Answer

A)  comparable worth
B)  years of experience
C)  years of schooling
D)  work effortE) A) and C)
F) C) and D)

Question 9

Suppose a forestry firm has just two types of jobs.One requires an education and the other does not.The differences in the wages is high enough to provide workers with a reasonable return on their investment in education.It is likely that:

Accepted Answer

A)  the firm will increase the wage rate for the job that requires an education
B)  the supply of workers for the job that requires an education will rise
C)  the firm's demand for workers for the job that an requires education will rise
D)  all of the above will occurE) A) and D)
F) All of the above

Question 10

Which of the following theories explains why increased education translates to higher wages?

Accepted Answer

A)  human capital theory only
B)  signalling theory only
C)  both human capital and signalling theory
D)  none of the aboveE) A) and B)
F) None of the above

Question 11

Professional underwater divers are known to have high wages and work an average of only 20 hours a week.The high wages are partly explained by the fact that the job:

Accepted Answer

A)  does not require a university degree
B)  is likely to be very dangerous
C)  is likely to be very dull
D)  is likely to be funE) A) and B)
F) A) and C)

Question 12

Which of the following will impact on the marginal product of an individual?

Accepted Answer

A)  lower natural ability
B)  a tendency to work hard
C)  going to college
D)  all of the aboveE) A) and B)
F) A) and C)

Question 13

Evidence of discrimination is most apparent when one compares wages among broad groups.

Accepted Answer

A) True 
 B)False

Question 14

Discrimination occurs when the marketplace offers different opportunities to similar individuals who differ only by:

Accepted Answer

A)  productivity
B)  experience
C)  gender
D)  any of the aboveE) B) and C)
F) All of the above

Question 15

Doppelsöldners were sixteenth century German soldiers that received double pay for fighting in the front of their unit.The likely difference in wages was caused by:

Accepted Answer

A)  doppelsöldners having more expensive uniforms
B)  an archaic custom with no market explanation
C)  doppelsöldners belonged to a union and other soldiers did not
D)  doppelsöldners having a more dangerous job than other soldiersE) None of the above
F) B) and C)

Question 16

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 D)
F) A) and B)

Question 17

Which of the following statements would weaken the discrimination complaint against Eddy's Hardware?

Accepted Answer

A)  cowboys are more productive than farm boys
B)  cowboys are generally less educated in the field of hardware
C)  cowboys are hard workers
D)  all of the aboveE) A) and B)
F) B) and D)

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

The fact that wage differentials continue to exist across different groups of workers has led economists to believe that:

Accepted Answer

A)  discrimination is in fact a very large economic problem
B)  firms apparently are not profit maximisers
C)  differences in human capital and job characteristics must be important in explaining the differences in wages
D)  the market has failed to properly allocate wages to different workersE) All of the above
F) None of the above

Question 20

Women tend to expect to work more years of their life than they used to.This new development in work expectations has led to which of the following?

Accepted Answer

A)  increased female enrollment in higher education and increased relative earnings of female workers
B)  increased female enrollment in higher education and decreased relative earnings of female workers
C)  decreased female enrollment in higher education and increased relative earnings of female workers
D)  decreased female enrollment in higher education and decreased relative earnings of female workersE) A) and D)
F) A) and C)

Exam 20: Earnings, Unions and Discrimination

Discrimination occurs when the marketplace offers different opportunities to similar individuals who differ only by:

Correct AnswerverifiedShow Answer

Doppelsöldners were sixteenth century German soldiers that received double pay for fighting in the front of their unit.The likely difference in wages was caused by:

Correct AnswerverifiedShow Answer

For a given wage, which of the following statements is true?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Who do you think would be paid more? Michael Clarke, one of Australia's best cricketers, or a highly-educated rural GP doctor? (Note: there is no right answer; looking for discussion of factors that influence wages)

Correct Answerverifieda GP doctor commands a high wage as he/s...View AnswerShow Answer

Suppose a forestry firm has just two types of jobs.One requires an education and the other does not.The differences in the wages is high enough to provide workers with a reasonable return on their investment in education.It is likely that:

Correct AnswerverifiedShow Answer

Which of the following will impact on the marginal product of an individual?

Correct AnswerverifiedShow Answer

Economists who study labour markets have discovered that:

Correct AnswerverifiedShow Answer

Professional underwater divers are known to have high wages and work an average of only 20 hours a week.The high wages are partly explained by the fact that the job:

Correct AnswerverifiedShow Answer

Business firms that pay salespeople a percentage of the sales they make are attempting to reward:

Correct AnswerverifiedShow Answer

When workers form a labour union, the result will likely be which of the following? (i) an increased demand for labour (ii) a surplus of labour (iii) increased unemployment

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Evidence of discrimination is most apparent when one compares wages among broad groups.

Correct AnswerverifiedShow Answer

Which of the following statements would weaken the discrimination complaint against Eddy's Hardware?

Correct AnswerverifiedShow Answer

The fact that wage differentials continue to exist across different groups of workers has led economists to believe that:

Correct AnswerverifiedShow Answer

Which of the following theories explains why increased education translates to higher wages?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Women tend to expect to work more years of their life than they used to.This new development in work expectations has led to which of the following?

Correct AnswerverifiedShow Answer

Given that workers differ in terms of ability and effort, firms are likely to pay people different wages even in the absence of discrimination.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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a GP doctor commands a high wage as he/s...
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