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Exam 19: Earnings and Discrimination

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Question 101

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Most of the time, a profit motive eliminates discriminatory behavior from a market; however, a discriminatory wage gap can persist even if the firm owners only care about profit if there is

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customer d...

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Question 102

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Experimental evidence indicates women choose less competitive environments than men.

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Question 103

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

The theory of education that states firms use educational attainment as a way of sorting between high-ability and low-ability workers is called

In a labor market free from discrimination, wages for workers that are employed by the same company will still differ.

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

In the presence of discrimination by customers,

The ownership of human capital

One reason why better-looking workers may have higher earnings is that physical attractiveness may enhance a worker's productivity for certain jobs, especially for those workers who deal with the public.

A manager of a small firm who believes in the signaling theory of education would encourage her employees to obtain additional education to raise their on-the-job productivity.

Table 19-1 $\begin{array} { | l | l | l | } \hline& \mathbf { 1 9 7 5 } & \mathbf { 2 0 1 1 }\\ \hline \text { Men } & \\\hline \text { High school, no college } & \$ 48,720 &\$46,038 \\\hline \text { College graduates } & \$ 69,146 & \$ 80,508 \\\hline \text { Percent extra for college grads } & + 42 \% & + 75 \% \\\hline & & \\\hline \text { Women } & & \\\hline \text { High school, no college } & \$ 28,006 & \$ 32,249 \\\hline \text { College graduates } & \$ 37,804 & \$ 58,229 \\\hline \text { Percent extra for college grads } & + 35 \% & + 81 \% \\\hline\end{array}$ Source: US Census Bureau and Mankiw's calculations -Refer to Table 19-1. What conclusion can you draw about the changes in the gaps in earnings between skilled and unskilled workers between 1975 and 2011?

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

Chloe and Adrian went to trade school at the same time. Each graduated with an associate's degree. They have received similar performance evaluations. Adrian's employer is not a good business manager, and the sales manager lost a major deal. Because of the decrease in profits, the employees did not receive raises last year. Chloe's employer is a savvy business manager and the sales manager is experienced and works hard. If Chloe has higher earnings than Adrian, the difference is most likely a function of

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

Unions are often able to sustain wages above the equilibrium wage because they can threaten to

Wages of doctors tend to be higher than wages of dental hygienists. Which of the following is not a compensating differential explaining the difference in wages?

Many economists believe that competitive, market economies provide a natural antidote to employer discrimination known as the

When comparing average wages for black and white men in the United States, wages paid to black men have been about 20 percent less than those paid to white men.

Scenario 19-7 ​ Suppose that in the competitive market for auto repair, firms prefer to hire men rather than women. Assume that the women applying for positions have the same skills, experience, and work ethic as the men. As a result of this discrimination, the demand for women is lower than it otherwise would be. -Refer to Scenario 19-7. If the firms in this market are profit-maximizers and customers do not care if a woman or a man works on their car, what will likely happen?

Figure 19-8 ​ ​ -Refer to Figure 19-8. The figure shows labor demand and labor supply in a non-unionized labor market. If the current labor demand is D1 and the current labor supply is S1, what is the equilibrium wage and quantity of labor?