Question 1

The theory of efficiency wages is 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) A) and D)
F) C) and D)

Question 2

Which of the following statements accurately explains the superstar phenomenon in wages?

Accepted Answer

A)   Better carpenters earn more than average carpenters because people are willing to pay higher prices for higher-quality work.
B)   Funnier comedians earn more than less funny comedians because they are more talented.
C)   Talented athletes earn more than equally talented plumbers because technology allows the delivery of the services provided by the athletes to all interested customers.
D)   Athletes get paid for performing services that everyday people perform as hobbies.E) B) and C)
F) All of the above

Question 3

Explain why the following situation is likely to persist: soccer players in Europe are the highest paid athletes and in the US they are among the lowest paid athletes.

Accepted Answer

Consumers use personal preferences when ...

Question 4

Empirical work that does not account for differences in the productivities of workers

Accepted Answer

A)   is unlikely to find evidence of wage differentials.
B)   can provide strong evidence of labor market discrimination.
C)   is likely to misinterpret apparent evidence of labor market discrimination.
D)   is accepted as superior to empirical work that does correct for differences in productivity of workers.E) A) and B)
F) A) and C)

Question 5

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 6

Suppose that a company hires recent college graduates for two types of jobs,sales people and credit analysts.The hours worked and skill levels are the same for both positions.The sales people must "cold call," which many people find to be unpleasant.When comparing the salaries of the two positions,it is likely that the company pays the

Accepted Answer

A)   credit analysts more as a compensating differential.
B)   sales people more as a compensating differential.
C)   same salary for both positions because they require the same skill level.
D)   same salary for both positions because it would be illegal to do otherwise.E) B) and D)
F) A) and D)

Question 7

Why would a wage differential due to discrimination be unlikely to persist in a competitive labor market?

Accepted Answer

A)   There is a cost advantage for firms that do not discriminate.
B)   Workers who are victims of discrimination will eventually drop out of the labor market.
C)   Competing firms will hire fewer of the workers who are temporarily victimized by discrimination.
D)   Discrimination cannot exist in makets.E) B) and D)
F) All of the above

Question 8

The fact that wage differentials continue to exist across different groups of workers leads economists to believe that

Accepted Answer

A)   discrimination by customers is the most common type of economic discrimination.
B)   differences in human capital and job characteristics must be important in explaining the differences in wages.
C)   firms apparently are not profit maximizers.
D)   the market has failed to properly allocate wages to different workers.E) A) and B)
F) B) and C)

Question 9

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

Question 10

The competition experiement conducted by economists Muriel Niederle and Lise Vesterlund confirmed 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) A) and C)

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

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) A) and C)
F) All of the above

Question 13

Scenario 19-2
Travis,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 workers to help a disaster relief agency distribute food aid in Africa.Recruiter B is looking for custodial help to clean motel rooms in a motel located near the entrance to a famous national park.
-Refer to Scenario 19-2.Travis is carefully considering the options that each recruiter presents.On the basis of knowledge obtained in his economics class,Travis concludes that

Accepted Answer

A)   if the motel job requires some night shift work,wages will be lower than otherwise.
B)   the job that is more fun will have a higher wage.
C)   if the motel job doesn't require any special skills,the wage offer will be lower than otherwise.
D)   All of the above are correct.E) All of the above
F) B) and C)

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

Question 15

In a recent U.S.presidential campaign,a lobbyist for a prominent national women's organization made the claim that women in the United States earn $0.60 for every $1.00 earned by a man.A reporter,who was prepared for this statement,asked the lobbyist why wages paid to the organization's secretarial staff (all of whom were women)were significantly below the national average if they were truly interested in raising the rates of compensation for women.If you were the lobbyist,how would you have answered this question? Do you think your answer is convincing? Explain.

Accepted Answer

The lobbyist would likely respond by cit...

Question 16

When the supply of workers is plentiful,one would predict that market wages would be

Accepted Answer

A)   determined outside the domain of economic theory.
B)   determined solely by factors that affect demand.
C)   low,other things equal.
D)   high,other things equal.E) B) and C)
F) None of the above

Question 17

The signaling theory of education maintains that workers who complete specific levels of education signal their high productivity to potential to employers.

Accepted Answer

A) True 
 B)False

Question 18

A 1986 study of segregation on early 20th century U.S.streetcars found that the primary source of racial segregation on streetcars was

Accepted Answer

A)   a longstanding tradition of racial segregation.
B)   policies implemented by the owners of streetcars.
C)   laws passed by the government.
D)   threats by white people to boycott the streetcars if they were forced to sit with black people.E) B) and D)
F) A) and D)

Question 19

According to the signaling theory of education,

Accepted Answer

A)   schooling sends signals to employers in much the same way that advertising sends signals to consumers.
B)   a person becomes more productive by earning a college degree.
C)   education is less important than natural ability.
D)   All of the above are correct.E) B) and C)
F) None of the above

Question 20

The superstar phenomenon explains why professional athletes earn more than amateur athletes.

Accepted Answer

A) True 
 B)False

Exam 19: Earnings and Discrimination

The fact that wage differentials continue to exist across different groups of workers leads economists to believe that

Correct Answer
verified

The theory of efficiency wages is that

Correct Answer
verified

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

Correct Answer
verified

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

The superstar phenomenon explains why professional athletes earn more than amateur athletes.

Correct Answer
verified

A 1986 study of segregation on early 20th century U.S.streetcars found that the primary source of racial segregation on streetcars was

Correct Answer
verified

According to the signaling theory of education,

Correct Answer
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Which of the following statements accurately explains the superstar phenomenon in wages?

Correct Answer
verified

Why would a wage differential due to discrimination be unlikely to persist in a competitive labor market?

Correct Answer
verified

Explain why the following situation is likely to persist: soccer players in Europe are the highest paid athletes and in the US they are among the lowest paid athletes.

Correct Answer
verified
Consumers use personal preferences when ...
View Answer

Empirical work that does not account for differences in the productivities of workers

Correct Answer
verified

Correct Answer
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The lobbyist would likely respond by cit...
View Answer

The signaling theory of education maintains that workers who complete specific levels of education signal their high productivity to potential to employers.

Correct Answer
verified

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

Correct Answer
verified

When the supply of workers is plentiful,one would predict that market wages would be

Correct Answer
verified

The competition experiement conducted by economists Muriel Niederle and Lise Vesterlund confirmed the results of Terry Odean which were that

Correct Answer
verified

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 Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Exam 19: Earnings and Discrimination

The fact that wage differentials continue to exist across different groups of workers leads economists to believe that

Correct AnswerverifiedShow Answer

The theory of efficiency wages is that

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

The superstar phenomenon explains why professional athletes earn more than amateur athletes.

Correct AnswerverifiedShow Answer

A 1986 study of segregation on early 20th century U.S.streetcars found that the primary source of racial segregation on streetcars was

Correct AnswerverifiedShow Answer

According to the signaling theory of education,

Correct AnswerverifiedShow Answer

Which of the following statements accurately explains the superstar phenomenon in wages?

Correct AnswerverifiedShow Answer

Why would a wage differential due to discrimination be unlikely to persist in a competitive labor market?

Correct AnswerverifiedShow Answer

Explain why the following situation is likely to persist: soccer players in Europe are the highest paid athletes and in the US they are among the lowest paid athletes.

Correct AnswerverifiedConsumers use personal preferences when ...View AnswerShow Answer

Empirical work that does not account for differences in the productivities of workers

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe lobbyist would likely respond by cit...View AnswerShow Answer

The signaling theory of education maintains that workers who complete specific levels of education signal their high productivity to potential to employers.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When the supply of workers is plentiful,one would predict that market wages would be

Correct AnswerverifiedShow Answer

The competition experiement conducted by economists Muriel Niederle and Lise Vesterlund confirmed the results of Terry Odean which were that

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

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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Consumers use personal preferences when ...
View Answer

Correct Answer
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Correct Answer
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The lobbyist would likely respond by cit...
View Answer

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Correct Answer
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