Question 1

Which of the following can be used to help explain wage differences among different groups of workers?

Accepted Answer

A)   human capital acquired through education
B)   human capital acquired through job experience
C)   compensating differentials
D)   All of the above can explain wage differences.E) A) and B)
F) A) and C)

Question 2

Figure 19-2 
-Refer to Figure 19-2. This figure depicts labor demand and supply in a nonunionized labor market. The original equilibrium wage is $10. If a labor union subsequently establishes a union shop and negotiates an hourly wage of $12.50, then there will be an excess

Accepted Answer

A)   demand of 100 workers.
B)   demand of 300 workers.
C)   supply of 100 workers.
D)   supply of 300 workers.E) All of the above
F) B) and C)

Question 3

A difference in wages that arises to offset the nonmonetary characteristics of different jobs is known as

Accepted Answer

A)   a compensating differential.
B)   an inefficiency wage.
C)   the equilibrium difference.
D)   a union wage.E) B) and D)
F) B) and C)

Question 4

Men and women tend to choose different types of occupations, and so

Accepted Answer

A)   a source of wage differences between men and women is differences in human capital.
B)   a source of wage differences between men and women is compensating differentials.
C)   the gap between the earnings of men and the earnings of women is likely even more significant than the data alone indicate.
D)   we should expect the earnings of women to rise relative to the earnings of men, in order to induce women to accept jobs that they have been reluctant to accept in the past.E) None of the above
F) A) and D)

Question 5

If we were to observe above-equilibrium wages in a particular labor market, then a possible explanation might be that

Accepted Answer

A)   the theory of efficiency wages holds true for that market.
B)   there is a powerful labor union representing workers in that market.
C)   workers are largely unskilled and/or inexperienced and minimum-wage laws are effectively holding wages up in that market.
D)   All of the above are correct.E) All of the above
F) A) and C)

Question 6

Which of the following is true of minimum-wage laws?

Accepted Answer

A)   They affect skilled workers' wages.
B)   They create above-equilibrium wages for some unskilled workers.
C)   They create a shortage of unskilled labor.
D)   They negatively affect the employment of skilled workers.E) A) and B)
F) A) and C)

Question 7

Which of the following is considered human capital?

Accepted Answer

A)   the ingredients a chef uses to prepare meals
B)   the pots and pans and other tools a chef uses to prepare meals
C)   the financial capital a chef uses to start his own restaurant
D)   the skills a chef learns when attending a class about cake decoratingE) C) and D)
F) A) and B)

Question 8

George and Brad are waiters at a local restaurant. The female customers prefer to be seated at the tables that George waits on because they think George is better looking than Brad. If George earns more than Brad because of his better looks, this is an example of

Accepted Answer

A)   effort playing a key role in wage differences.
B)   differences in human capital.
C)   a beauty premium.
D)   a compensating differential.E) A) and B)
F) B) and D)

Question 9

The difference in wages paid to major-league baseball players and minor-league baseball players is most likely due to

Accepted Answer

A)   differences in chance.
B)   differences in natural ability.
C)   the fact that the players' union is strong.
D)   a compensating differential.E) A) and B)
F) A) and C)

Question 10

Which of the following statements is correct?

Accepted Answer

A)   Differences in human capital may explain differences in wages between blacks and whites.
B)   Racial discrimination is the strongest explanation for differences in wages between blacks and whites.
C)   Gender discrimination is the strongest explanation for differences in wages between blacks and whites.
D)   None of the above statements is correct.E) A) and B)
F) A) and C)

Question 11

Which of the following variables related to a worker's wage are the most difficult to measure?

Accepted Answer

A)   ability, effort, and chance
B)   job characteristics, gender, and race
C)   gender, race, and geographic location
D)   years of schooling, age, and years of experienceE) B) and C)
F) B) and D)

Question 12

Which of the following would be considered human capital?

Accepted Answer

A)   the financial capital a person earns over a lifetime of investing
B)   the machinery a worker uses to produce a product
C)   the training a worker receives when starting a new job
D)   the break room in a factory where employees go to have coffeeE) All of the above
F) None of the above

Question 13

If, as some economists believe, changes in technology over recent decades have brought about changes in labor markets, then those changes likely have resulted in

Accepted Answer

A)   reduced emphasis on compensating differentials as an explanation for wage differences.
B)   a reduced emphasis on human-capital differences among workers as an explanation for wage differences.
C)   a narrowing of the earnings gap between high-skilled workers and low-skilled workers.
D)   a widening of the earnings gap between high-skilled workers and low-skilled workers.E) A) and B)
F) C) and D)

Question 14

It is argued that competitive markets provide a "natural remedy" to discriminatory wage practices. Which of the following is widely recognized as a potential limit to the potency of that natural remedy?

Accepted Answer

A)   Governments sometimes mandate discriminatory practices.
B)   Some employees have a lot of job experience; others have little job experience.
C)   In a discriminatory environment, a competitive firm that takes prices and wages as given has nothing to gain from any particular choice it makes regarding who to hire or which customers to serve.
D)   Not all firms exhibit social responsibility in sufficient measure to counter discriminatory wage practices.E) All of the above
F) None of the above

Question 15

Among male workers over age 25, about what percent has a college degree? What is this percentage for black male workers over age 25?

Accepted Answer

The answer of Among male workers over age 25, about...

Question 16

Over the last several years, the earnings gap between workers with college degrees and workers with high school degrees has

Accepted Answer

A)   remained roughly constant for both men and women.
B)   widened for both men and women.
C)   widened for men and narrowed for women.
D)   narrowed for men and widened for women.E) All of the above
F) A) and B)

Question 17

Which of the following sets of circumstances is likely to provide the best evidence in support of the theory of efficiency wages?

Accepted Answer

A)   Workers in the market are unskilled and not represented by a union, and their wage exceeds both the equilibrium wage and the minimum wage.
B)   Workers in the market are highly skilled and not represented by a union, and their wage exceeds the minimum wage.
C)   Workers in the market are highly skilled and represented by a union, and their wage exceeds the equilibrium wage.
D)   Employers in the market are known for reducing the workers' wage whenever they get an opportunity to do so.E) All of the above
F) C) and D)

Question 18

In the United States, the earnings gap between workers with college degrees and workers with high school degrees

Accepted Answer

A)   has never been documented by reliable evidence.
B)   is evident, but it has remained roughly constant over the past several years.
C)   is evident, but it has diminished over the last several years.
D)   is evident, and it has widened over the last several years.E) A) and C)
F) C) and D)

Question 19

Which of the following statements is not correct?

Accepted Answer

A)   Competitive markets tend to limit the impact of discrimination on wages.
B)   Differences in earnings of whites and blacks or men and women provide clear evidence of discrimination.
C)   Some differences in earnings are attributable to discrimination based on race, sex, or other factors.
D)   Profit-maximizing behavior can reduce discriminatory wage differentials.E) A) and D)
F) A) and C)

Question 20

Figure 19-1 
-Refer to Figure 19-1. What is the change in employment of having the minimum wage at $8 instead of $7?

Accepted Answer

A)   2 million jobs are gained
B)   no jobs are gained or lost
C)   1 million jobs are lost
D)   3 million jobs are lostE) A) and B)
F) All of the above

Exam 19: Earnings and Discrimination

If, as some economists believe, changes in technology over recent decades have brought about changes in labor markets, then those changes likely have resulted in

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

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Which of the following can be used to help explain wage differences among different groups of workers?

Correct AnswerverifiedShow Answer

It is argued that competitive markets provide a "natural remedy" to discriminatory wage practices. Which of the following is widely recognized as a potential limit to the potency of that natural remedy?

Correct AnswerverifiedShow Answer

George and Brad are waiters at a local restaurant. The female customers prefer to be seated at the tables that George waits on because they think George is better looking than Brad. If George earns more than Brad because of his better looks, this is an example of

Correct AnswerverifiedShow Answer

Figure 19-2 -Refer to Figure 19-2. This figure depicts labor demand and supply in a nonunionized labor market. The original equilibrium wage is $10. If a labor union subsequently establishes a union shop and negotiates an hourly wage of $12.50, then there will be an excess

Correct AnswerverifiedShow Answer

Men and women tend to choose different types of occupations, and so

Correct AnswerverifiedShow Answer

Over the last several years, the earnings gap between workers with college degrees and workers with high school degrees has

Correct AnswerverifiedShow Answer

The difference in wages paid to major-league baseball players and minor-league baseball players is most likely due to

Correct AnswerverifiedShow Answer

Which of the following sets of circumstances is likely to provide the best evidence in support of the theory of efficiency wages?

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Which of the following is considered human capital?

Correct AnswerverifiedShow Answer

Which of the following variables related to a worker's wage are the most difficult to measure?

Correct AnswerverifiedShow Answer

In the United States, the earnings gap between workers with college degrees and workers with high school degrees

Correct AnswerverifiedShow Answer

A difference in wages that arises to offset the nonmonetary characteristics of different jobs is known as

Correct AnswerverifiedShow Answer

Among male workers over age 25, about what percent has a college degree? What is this percentage for black male workers over age 25?

Correct AnswerverifiedShow Answer

Which of the following would be considered human capital?

Correct AnswerverifiedShow Answer

Figure 19-1 -Refer to Figure 19-1. What is the change in employment of having the minimum wage at $8 instead of $7?

Correct AnswerverifiedShow Answer

If we were to observe above-equilibrium wages in a particular labor market, then a possible explanation might be that

Correct AnswerverifiedShow Answer

Which of the following is true of minimum-wage laws?

Correct AnswerverifiedShow Answer

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