Question 1

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 D)
F) B) and D)

Question 2

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.

Accepted Answer

A) True 
 B)False

Question 3

Some discriminatory hiring practices can be expected, even if markets are competitive, as a result of

Accepted Answer

A)   unrestricted entry and exit in markets.
B)   lower costs of hiring.
C)   a perfectly elastic market demand.
D)   customer preferences.E) A) and B)
F) All of the above

Question 4

Human capital refers to the physical tools and equipment that workers use on their jobs to enhance their productivity.

Accepted Answer

A) True 
 B)False

Question 5

A competitive market may be consistent with a discriminatory wage differential if

Accepted Answer

A)   firms' customers have discriminatory preferences.
B)   the wage differential is explained by a compensating differential.
C)   the wage differential is explained by differences in human capital.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 6

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

Accepted Answer

The answer of Unions are often able to sustain wages...

Question 7

Who among the following individuals most likely experiences the largest nonmonetary reward as a supplier of labor? Assume all of the four individuals have the same level of education and work the same number of hours per week.

Accepted Answer

A)   Albert, who prefers not to socialize and works at home by himself
B)   Amy, whose job provides little intellectual and personal satisfaction
C)   Antoinette, whose preference is to avoid dangerous work but works as a firefighter
D)   Arnold, who works the night shift but would prefer to work during the day and sleep at nightE) B) and C)
F) All of the above

Question 8

Allen and Ellen both work at Burger Ranch. Allen is paid more than Ellen. Which of the following could explain why Allen is paid more?

Accepted Answer

A)   The manager discriminates against women.
B)   Allen works the undesirable early morning shift.
C)   Allen has more experience and so more human capital.
D)   All of the above could be correct.E) All of the above
F) A) and B)

Question 9

Table 19-1
  Source: US Census Bureau and Mankiw's calculations
-Refer to Table 19-1. From 1975 to 2011, the salary gap among women who graduate from college compared to those who complete only high school

Accepted Answer

A)   increased by 35% while the salary gap among men increased by 42%.
B)   more than doubled while the salary gap among men rose significantly but less than doubled.
C)   increased, but the salary gap among men decreased.
D)   decreased, but the salary gap among men increased.E) B) and C)
F) B) and D)

Question 10

Suppose that Philip is the best contractor in town, and he makes $400,000 a year. Suppose that Julia Roberts is the best and highest paid actress in Hollywood, and she makes $13 million per movie. Both are the best in their respective fields of work. One reason for the significant difference in incomes has to do with the nature of the service each offers. Philip's contracting services

Accepted Answer

A)   can be provided to an unlimited number of customers in a year, but Julia's work is sold to only a few individuals in a year.
B)   can only be provided to a limited number of customers in a year, but Julia's work is sold to millions of individuals in a year - i.e., to anyone who has the willingness and ability to pay for admission to her movies.
C)   can be provided to a unlimited number of customers in a year, and Julia's work is sold to millions of individuals in a year - i.e., to anyone who has the willingness and ability to pay for admission to her movies.
D)   can only be provided to a limited number of customers in a year, and Julia's work is sold to only a few individuals in a year.E) None of the above
F) A) and D)

Question 11

Workers who work the night shift at factories are paid more than similar workers who work the day shift due to a

Accepted Answer

compensati...

Question 12

According to evidence provided by the U.S. government, the median black

Accepted Answer

A)   man earns more than the median black woman.
B)   woman earns less than the median white woman
C)   man earns less than the median white man.
D)   All of the above are correct.E) All of the above
F) A) and D)

Question 13

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 C)
F) A) and B)

Question 14

Higher levels of human capital are correlated with higher earnings because firms are willing to pay more for better- educated workers who have higher marginal productivities.

Accepted Answer

A) True 
 B)False

Question 15

The theory of efficiency wages suggests that

Accepted Answer

A)   above-equilibrium wages increase worker productivity.
B)   workers with higher levels of education earn more than workers with lower levels of education.
C)   workers signal their high ability to potential employers by completing formal years of schooling.
D)   union workers earn more than nonunion workers.E) All of the above
F) B) and C)

Question 16

Labor-market discrimination is evident when

Accepted Answer

A)   wages of individuals differ on the basis of some recognizable attribute that is unrelated to productivity.
B)   wage rates differ for similar jobs.
C)   consumers prefer to shop at some stores, and not at others.
D)   wages reflect workers' human capital.E) B) and C)
F) C) and D)

Question 17

Most economists believe that the higher average salaries earned by men in comparison to women arise from

Accepted Answer

A)   discrimination.
B)   a variety of factors, including differences in human capital and compensating differentials; few economists believe that gender discrimination in earnings exists.
C)   differences in human capital as the primary reason.
D)   a variety of factors, including differences in human capital, compensating differentials, and discrimination.E) A) and D)
F) B) and D)

Question 18

In 1913, the Ford Motor Company decided to pay its employees $5 a day. This wage was significantly higher than what any other organization offered. Henry Ford believed that this wage would make his employees happier, increase their productivity, and lower employee turnover. Economists would say that Mr. Ford offered his employees

Accepted Answer

A)   a union.
B)   an efficiency wage.
C)   a diminishing rate of marginal return.
D)   a leisure wage.E) A) and B)
F) A) and C)

Question 19

Efficiency wages will raise the quantity of labor supplied to the market.

Accepted Answer

A) True 
 B)False

Question 20

Tom, the manager and owner of a small company, believes in the signaling theory of education, not the human capital theory. As such, Tom would be most likely to agree with which of the following quotes?

Accepted Answer

A)   "We encourage our employees to enroll in night classes to improve their on­the­job productivity."
B)   "We encourage our employees to participate in online seminars to learn new skills."
C)   "We pay higher wages to employees who have MBAs because, on average, their job performance is better than similar employees who do not have MBAs."
D)   "When we interview prospective employees at job fairs, we are looking for college graduates because they have the determination and follow­through to finish what they start."E) A) and C)
F) A) and D)

Exam 19: Earnings and Discrimination

The theory of efficiency wages suggests that

Correct Answer
verified

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.

Correct Answer
verified

Tom, the manager and owner of a small company, believes in the signaling theory of education, not the human capital theory. As such, Tom would be most likely to agree with which of the following quotes?

Correct Answer
verified

Efficiency wages will raise the quantity of labor supplied to the market.

Correct Answer
verified

Correct Answer
verified

Who among the following individuals most likely experiences the largest nonmonetary reward as a supplier of labor? Assume all of the four individuals have the same level of education and work the same number of hours per week.

Correct Answer
verified

Labor-market discrimination is evident when

Correct Answer
verified

Some discriminatory hiring practices can be expected, even if markets are competitive, as a result of

Correct Answer
verified

Most economists believe that the higher average salaries earned by men in comparison to women arise from

Correct Answer
verified

Correct Answer
verified

Higher levels of human capital are correlated with higher earnings because firms are willing to pay more for better- educated workers who have higher marginal productivities.

Correct Answer
verified

Which of the following is an example of human capital?

Correct Answer
verified

According to evidence provided by the U.S. government, the median black

Correct Answer
verified

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

Correct Answer
verified

Human capital refers to the physical tools and equipment that workers use on their jobs to enhance their productivity.

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

Table 19-1 Source: US Census Bureau and Mankiw's calculations -Refer to Table 19-1. From 1975 to 2011, the salary gap among women who graduate from college compared to those who complete only high school

Correct Answer
verified

A competitive market may be consistent with a discriminatory wage differential if

Correct Answer
verified

Workers who work the night shift at factories are paid more than similar workers who work the day shift due to a

Correct Answer
verified
compensati...
View Answer

Allen and Ellen both work at Burger Ranch. Allen is paid more than Ellen. Which of the following could explain why Allen is paid more?

Correct Answer
verified

Exam 19: Earnings and Discrimination

The theory of efficiency wages suggests that

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Tom, the manager and owner of a small company, believes in the signaling theory of education, not the human capital theory. As such, Tom would be most likely to agree with which of the following quotes?

Correct AnswerverifiedShow Answer

Efficiency wages will raise the quantity of labor supplied to the market.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Who among the following individuals most likely experiences the largest nonmonetary reward as a supplier of labor? Assume all of the four individuals have the same level of education and work the same number of hours per week.

Correct AnswerverifiedShow Answer

Labor-market discrimination is evident when

Correct AnswerverifiedShow Answer

Some discriminatory hiring practices can be expected, even if markets are competitive, as a result of

Correct AnswerverifiedShow Answer

Most economists believe that the higher average salaries earned by men in comparison to women arise from

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Higher levels of human capital are correlated with higher earnings because firms are willing to pay more for better- educated workers who have higher marginal productivities.

Correct AnswerverifiedShow Answer

Which of the following is an example of human capital?

Correct AnswerverifiedShow Answer

According to evidence provided by the U.S. government, the median black

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Human capital refers to the physical tools and equipment that workers use on their jobs to enhance their productivity.

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

Table 19-1 Source: US Census Bureau and Mankiw's calculations -Refer to Table 19-1. From 1975 to 2011, the salary gap among women who graduate from college compared to those who complete only high school

Correct AnswerverifiedShow Answer

A competitive market may be consistent with a discriminatory wage differential if

Correct AnswerverifiedShow Answer

Workers who work the night shift at factories are paid more than similar workers who work the day shift due to a

Correct Answerverifiedcompensati...View AnswerShow Answer

Allen and Ellen both work at Burger Ranch. Allen is paid more than Ellen. Which of the following could explain why Allen is paid more?

Correct AnswerverifiedShow Answer

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compensati...
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