Question 1

Marcia is a white 23-year-old female, and Joan is a black 23-year-old female. Both Marcia and Joan were economics majors, and they graduated from the same college in the same year with the same GPA. Marcia and Joan both got identical jobs at a brokerage firm after graduating from college. They both work equally hard. Marcia earns $38,000 a year, and Joan earns $30,000 a year. Select the best explanation for this wage difference.

Accepted Answer

A)   Marcia has less human capital than Joan.
B)   Marcia receives a compensating wage differential that Joan does not.
C)   Joan has been discriminated against because she is black.
D)   Marcia has been discriminated against because she is white.E) B) and C)
F) None of the above

Question 2

A study using data from the late 1960s showed that black baseball players earned less than comparable white players. Studies of more recent salaries in baseball, however, have found no evidence of discriminatory wage differentials.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not considered human capital?

Accepted Answer

A)   the golf clubs a professional golfer uses to play golf
B)   the skills a professional golfer has gained by practicing on the driving range
C)   the professional golfer's knowledge of how to play a better game learned from talking with other players
D)   none of the above would be considered human capitalE) B) and D)
F) B) and C)

Question 4

Scenario 19-3
In the small town of Hamilton, Montana, there is a local hardware store called Eddy's Hardware. There are only two types of workers who apply for jobs at Eddy's Hardware: cowboys and farm boys. Local politicians have received numerous complaints that Eddy's Hardware is practicing wage discrimination against farm boys. Eddy's Hardware denies the complaint and says the store is only trying to maximize profit.
-Refer to Scenario 19-3. Which of the following statements would strengthen the discrimination complaint against Eddy's Hardware?

Accepted Answer

A)   Cowboys call in sick to work more often than farm boys.
B)   Farm boys are more likely than cowboys to work the day shift rather than the night shift.
C)   Cowboys' experience using hardware generally exceeds farm boys' experience using it.
D)   On average farm boys have less experience working at the hardware store than cowboys.E) B) and D)
F) A) and C)

Question 5

Compensating differentials are differences in wages related to the characteristics of a job.

Accepted Answer

A) True 
 B)False

Question 6

Construction work is much riskier than working as a server at a restaurant. As a result, we'd expect a difference in wages between the two jobs. The difference is known as

Accepted Answer

A)   an efficiency wage.
B)   a compensating differential.
C)   a wage adjustment.
D)   a minimum wage.E) None of the above
F) All of the above

Question 7

Figure 19-7 
-Refer to Figure 19-7. 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, when a minimum wage of $18 per hour is imposed in this market, how many unemployed workers result?

Accepted Answer

The answer of Figure 19-7 
-Refer to Figure 19-7. The...

Question 8

When comparing average wages for male and female workers in the United States, wages paid to females have been about 40 percent less than those paid to male workers.

Accepted Answer

A) True 
 B)False

Question 9

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 10

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) All of the above
F) None of the above

Question 11

In the signaling theory of education,

Accepted Answer

A)   discrimination does not affect wage differentials.
B)   schooling makes workers more productive in the long-run.
C)   schooling makes workers more productive in the short-run.
D)   the worker signals to the employer that he is a valuable employee because he was willing to spend time to get an education.E) C) and D)
F) A) and B)

Question 12

Figure 19-6 
-Refer to Figure 19-6. Given demand, D1, and supply, S1, how many workers are unemployed if a minimum wage of $8 per hour is imposed on this market?

Accepted Answer

The answer of Figure 19-6 
-Refer to Figure 19-6. Given...

Question 13

The competition experiment conducted by economists Muriel Niederle and Lise Vesterlund was consistent with the results of Terry Odean which were that

Accepted Answer

A)   men were better at math than women.
B)   men chose competition more because they were better at sports than women.
C)   men trade stocks excessively while women adopt a buy-and-hold strategy.
D)   streetcar companies were not in favor of segregation because it hurt their profits.E) A) and B)
F) C) and D)

Question 14

Evidence of differences in the average wages of black workers compared to white workers

Accepted Answer

A)   does not alone provide conclusive evidence of discrimination.
B)   clearly indicates differences in productivity between races.
C)   is seldom used to provide evidence of discriminatory bias.
D)   clearly indicates discrimination on the basis of race.E) A) and D)
F) A) and C)

Question 15

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 B)
F) A) and C)

Question 16

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) C) and D)
F) A) and D)

Question 17

Superstars arise in markets in which every customer in the market is able to enjoy the good supplied by the

Accepted Answer

The answer of Superstars arise in markets in which every...

Question 18

Bob, the manager and owner of a small company, believes in the theory of efficiency wages. As such, Bob would be most likely to agree with which of the following quotes?

Accepted Answer

A)   "The only place where success comes before work is in the dictionary."
B)   "Work hard. Play harder."
C)   "Pay a man for the job you want him to do."
D)   "Imagination is more important than knowledge."E) C) and D)
F) A) and B)

Question 19

The human-capital theory explanation for why people invest in education has been challenged by a theory that suggests

Accepted Answer

A)   schooling acts only as a signal of ability.
B)   humans cannot be considered "capital."
C)   productivity is not linked to wages.
D)   ability, effort, and chance matter more.E) All of the above
F) A) and B)

Question 20

After an employer pays the cost of educating a worker,

Accepted Answer

A)   the worker has a higher level of human capital.
B)   the worker should become more productive.
C)   the worker might look for another job unless his employer pays him more.
D)   All of the above are correct.E) B) and D)
F) C) and D)

Exam 19: Earnings and Discrimination

If the signaling theory of education is correct,

Correct Answer
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A study using data from the late 1960s showed that black baseball players earned less than comparable white players. Studies of more recent salaries in baseball, however, have found no evidence of discriminatory wage differentials.

Correct Answer
verified

Superstars arise in markets in which every customer in the market is able to enjoy the good supplied by the

Correct Answer
verified

Figure 19-6 -Refer to Figure 19-6. Given demand, D1, and supply, S1, how many workers are unemployed if a minimum wage of $8 per hour is imposed on this market?

Correct Answer
verified

In the signaling theory of education,

Correct Answer
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The human-capital theory explanation for why people invest in education has been challenged by a theory that suggests

Correct Answer
verified

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 Answer
verified
Job experience, education, lif...
View Answer

Evidence of differences in the average wages of black workers compared to white workers

Correct Answer
verified

When comparing average wages for male and female workers in the United States, wages paid to females have been about 40 percent less than those paid to male workers.

Correct Answer
verified

Correct Answer
verified

The competition experiment conducted by economists Muriel Niederle and Lise Vesterlund was consistent with the results of Terry Odean which were that

Correct Answer
verified

Compensating differentials are differences in wages related to the characteristics of a job.

Correct Answer
verified

Correct Answer
verified

After an employer pays the cost of educating a worker,

Correct Answer
verified

Construction work is much riskier than working as a server at a restaurant. As a result, we'd expect a difference in wages between the two jobs. The difference is known as

Correct Answer
verified

Correct Answer
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Which of the following is not considered human capital?

Correct Answer
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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 Answer
verified

Bob, the manager and owner of a small company, believes in the theory of efficiency wages. As such, Bob would be most likely to agree with which of the following quotes?

Correct Answer
verified

Figure 19-7 -Refer to Figure 19-7. 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, when a minimum wage of $18 per hour is imposed in this market, how many unemployed workers result?

Correct Answer
verified

Exam 19: Earnings and Discrimination

If the signaling theory of education is correct,

Correct AnswerverifiedShow Answer

A study using data from the late 1960s showed that black baseball players earned less than comparable white players. Studies of more recent salaries in baseball, however, have found no evidence of discriminatory wage differentials.

Correct AnswerverifiedShow Answer

Superstars arise in markets in which every customer in the market is able to enjoy the good supplied by the

Correct AnswerverifiedShow Answer

Figure 19-6 -Refer to Figure 19-6. Given demand, D1, and supply, S1, how many workers are unemployed if a minimum wage of $8 per hour is imposed on this market?

Correct AnswerverifiedShow Answer

In the signaling theory of education,

Correct AnswerverifiedShow Answer

The human-capital theory explanation for why people invest in education has been challenged by a theory that suggests

Correct AnswerverifiedShow Answer

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

Evidence of differences in the average wages of black workers compared to white workers

Correct AnswerverifiedShow Answer

When comparing average wages for male and female workers in the United States, wages paid to females have been about 40 percent less than those paid to male workers.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The competition experiment conducted by economists Muriel Niederle and Lise Vesterlund was consistent with the results of Terry Odean which were that

Correct AnswerverifiedShow Answer

Compensating differentials are differences in wages related to the characteristics of a job.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

After an employer pays the cost of educating a worker,

Correct AnswerverifiedShow Answer

Construction work is much riskier than working as a server at a restaurant. As a result, we'd expect a difference in wages between the two jobs. The difference is known as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not considered human capital?

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

Bob, the manager and owner of a small company, believes in the theory of efficiency wages. As such, Bob would be most likely to agree with which of the following quotes?

Correct AnswerverifiedShow Answer

Figure 19-7 -Refer to Figure 19-7. 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, when a minimum wage of $18 per hour is imposed in this market, how many unemployed workers result?

Correct AnswerverifiedShow Answer

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Job experience, education, lif...
View Answer

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