Question 1

Figure 19-3
The manufacturing labor market. 
-Refer to Figure 19-3. Suppose the manufacturing labor market, which is non-unionized, is in equilibrium at a wage equal to $20. Suppose now that the AFL-CIO (a labor organization)  organizes the workers in the manufacturing market and negotiates a wage of $30 per hour. After the workers become unionized, how many workers do manufacturing firms collectively hire?

Accepted Answer

A)  160 workers
B)  200 workers
C)  240 workers
D)  There is not enough information to determine the number of workers.E) B) and D)
F) A) and B)

Question 2

Dr. Benson is regarded as, by far, the best dentist in his part of the country, yet his income is not significantly higher than the average income for a dentist in his area. In contrast, Bo Johnson, the best baseball player in that region, earns five times the average salary of all baseball players. The most likely explanation is that

Accepted Answer

A)  the widespread perception that Dr. Benson is a great dentist is, in fact, incorrect.
B)  the baseball players' union is more powerful than the professional association of dentists.
C)  Bo Johnson, unlike Dr. Benson, can provide his services to millions of people simultaneously.
D)  chance plays a role in determining people's incomes, resulting in earnings discrepancies that are hard to explain or justify.E) B) and D)
F) B) and C)

Question 3

When employers sort employment applications into high-ability and low-ability people based on whether or not the applicant has a college degree (irrespective of major) , they are providing evidence in support of the

Accepted Answer

A)  human-capital theory of education.
B)  signaling theory of education.
C)  principle that education reduces marginal productivity.
D)  principle that most business owners are more interested in discriminating against a particular group than in maximizing profits.E) B) and D)
F) A) and B)

Question 4

Which of the following is least likely to be the reason women are underrepresented in the economics profession?

Accepted Answer

A)  labor market discrimination
B)  the choice of women to select other occupations
C)  cultural bias in primary and secondary education
D)  the inability of women to solve problems in economicsE) B) and D)
F) A) and D)

Question 5

Discrimination is a reflection of some people's prejudice against certain groups in society.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following explains the "beauty premium" differences in wages?

Accepted Answer

A)  People who spend time on their personal appearance may send a signal that they are more productive workers.
B)  Personal appearance and intelligence are inversely related.
C)  The "superstar phenomenon" explains the "beauty premium."
D)  Better-looking people are more efficient; thus, they are paid an efficiency wage.E) C) and D)
F) A) and B)

Question 7

Education raises wages because the demanders of labor

Accepted Answer

A)  are willing to pay more for highly educated workers who have higher marginal products and the suppliers of labor are willing to pay the cost of becoming educated only if they are rewarded.
B)  are willing to pay the cost of becoming educated only if they are rewarded and the suppliers of labor are willing to pay more for highly educated workers who have higher marginal products.
C)  require fewer workers if they are highly educated.
D)  None of the above is correct.E) A) and C)
F) None of the above

Question 8

Professional underwater divers are known to have high wages and work an average of only 20 hours per week. Which of the following would push the divers' wages higher?

Accepted Answer

A)  The job is simple.
B)  The job is fun.
C)  The job is very dangerous.
D)  The job does not require specialized training.E) B) and C)
F) All of the above

Question 9

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 10

One hypothesis to explain the changing gap in wages between unskilled and skilled workers in the United States is that international trade has altered the relative demands for skilled and unskilled workers.

Accepted Answer

A) True 
 B)False

Question 11

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 C)
F) A) and C)

Question 12

Some economists argue that changes in U.S. trade flows have altered the gap between wages of skilled and unskilled workers. Explain.

Accepted Answer

The U.S. tends to import goods produced ...

Question 13

Which of the following could explain the changing gap in income between unskilled and skilled workers in the United States?

Accepted Answer

A)  International trade has decreased the domestic demand for skilled labor and increased the domestic demand for unskilled labor.
B)  Certain technological changes such as the introduction of computers have increased the domestic demand for skilled labor and decreased the domestic demand for unskilled labor.
C)  Both a and b are correct.
D)  Neither a nor b is correct.E) A) and B)
F) C) and D)

Question 14

Westland and Oceania have just started to trade with each other. Westland exports goods produced with skilled labor and imports goods made with unskilled labor from Oceania. Over time, we would expect that in Oceania the wages of unskilled workers will

Accepted Answer

A)  rise, and the wages of skilled labor will fall.
B)  fall, and the wages of skilled labor will rise.
C)  rise, and the wages of skilled labor will rise.
D)  fall, and the wages of skilled labor will fall.E) B) and D)
F) B) and C)

Question 15

Which of the following would both make a worker's wage higher than otherwise?

Accepted Answer

A)  the work is safe, the employer pays an efficiency wage
B)  the work is safe, the employer does not pay an efficiency wage
C)  the work is dangerous, the employer pays an efficiency wage
D)  the work is dangerous, the employer does not pay and efficiency wageE) A) and B)
F) C) and D)

Question 16

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 C)
F) C) and D)

Question 17

The theory of efficiency wages suggests that firms may pay above-equilibrium wages

Accepted Answer

A)  to reduce employee turnover.
B)  to prevent unions from recruiting members.
C)  to reduce the need for minimum wage laws.
D)  to increase the demand for better-skilled workers.E) A) and B)
F) C) and D)

Question 18

Paul and David work for the same company and have the same job title, education, work experience, and are equally skilled at what they do. Paul works the night shift and is paid $60,000 a year, while David works a regular day shift and is paid $55,000 a year. Which of the following is the best explanation for why Paul earns more than David?

Accepted Answer

A)  Paul has more human capital than David.
B)  David has more human capital than Paul.
C)  Paul has received a compensating differential.
D)  Aside from pay, the night shift is more desirable than the day shift.E) All of the above
F) C) and D)

Question 19

All differences in wages that are not accounted for by differences in human-capital investment are likely to be a result of discrimination.

Accepted Answer

A) True 
 B)False

Question 20

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) All of the above
F) None of the above

Exam 19: Earnings and Discrimination

Which of the following would both make a worker's wage higher than otherwise?

Correct Answer
verified

Which of the following is least likely to be the reason women are underrepresented in the economics profession?

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

Correct Answer
verified

Which of the following explains the "beauty premium" differences in wages?

Correct Answer
verified

All differences in wages that are not accounted for by differences in human-capital investment are likely to be a result of discrimination.

Correct Answer
verified

Correct Answer
verified

Discrimination is a reflection of some people's prejudice against certain groups in society.

Correct Answer
verified

Westland and Oceania have just started to trade with each other. Westland exports goods produced with skilled labor and imports goods made with unskilled labor from Oceania. Over time, we would expect that in Oceania the wages of unskilled workers will

Correct Answer
verified

Some economists argue that changes in U.S. trade flows have altered the gap between wages of skilled and unskilled workers. Explain.

Correct Answer
verified
The U.S. tends to import goods produced ...
View Answer

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

Correct Answer
verified

Correct Answer
verified

One hypothesis to explain the changing gap in wages between unskilled and skilled workers in the United States is that international trade has altered the relative demands for skilled and unskilled 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

The theory of efficiency wages suggests that firms may pay above-equilibrium wages

Correct Answer
verified

Which of the following could explain the changing gap in income between unskilled and skilled workers in the United States?

Correct Answer
verified

When employers sort employment applications into high-ability and low-ability people based on whether or not the applicant has a college degree (irrespective of major) , they are providing evidence in support of the

Correct Answer
verified

Professional underwater divers are known to have high wages and work an average of only 20 hours per week. Which of the following would push the divers' wages higher?

Correct Answer
verified

Education raises wages because the demanders of labor

Correct Answer
verified

Exam 19: Earnings and Discrimination

Which of the following would both make a worker's wage higher than otherwise?

Correct AnswerverifiedShow Answer

Which of the following is least likely to be the reason women are underrepresented in the economics profession?

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

Correct AnswerverifiedShow Answer

Which of the following explains the "beauty premium" differences in wages?

Correct AnswerverifiedShow Answer

All differences in wages that are not accounted for by differences in human-capital investment are likely to be a result of discrimination.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Discrimination is a reflection of some people's prejudice against certain groups in society.

Correct AnswerverifiedShow Answer

Westland and Oceania have just started to trade with each other. Westland exports goods produced with skilled labor and imports goods made with unskilled labor from Oceania. Over time, we would expect that in Oceania the wages of unskilled workers will

Correct AnswerverifiedShow Answer

Some economists argue that changes in U.S. trade flows have altered the gap between wages of skilled and unskilled workers. Explain.

Correct AnswerverifiedThe U.S. tends to import goods produced ...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

One hypothesis to explain the changing gap in wages between unskilled and skilled workers in the United States is that international trade has altered the relative demands for skilled and unskilled 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

The theory of efficiency wages suggests that firms may pay above-equilibrium wages

Correct AnswerverifiedShow Answer

Which of the following could explain the changing gap in income between unskilled and skilled workers in the United States?

Correct AnswerverifiedShow Answer

When employers sort employment applications into high-ability and low-ability people based on whether or not the applicant has a college degree (irrespective of major) , they are providing evidence in support of the

Correct AnswerverifiedShow Answer

Professional underwater divers are known to have high wages and work an average of only 20 hours per week. Which of the following would push the divers' wages higher?

Correct AnswerverifiedShow Answer

Education raises wages because the demanders of labor

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The U.S. tends to import goods produced ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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