Question 1

Which of the following helps to explain the differences in earnings in the United States?

Accepted Answer

A)   ability, effort, and chance
B)   compensating differentials
C)   physical attractiveness
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 2

Difference in wages can be explained by differences in

Accepted Answer

A)   job characteristics and worker characteristics.
B)   job characteristics but not worker characteristics.
C)   worker characteristics but not job characteristics.
D)   neither worker characteristics or job characteristics.E) C) and D)
F) B) and C)

Question 3

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) None of the above
F) C) and D)

Question 4

In determining wages, ability, effort, and chance

Accepted Answer

A)   probably play no role whatsoever.
B)   play a role, but their importance is hard to gauge since ability, effort, and chance are hard to measure.
C)   play a role, and that role is fully captured in easy-to-measure factors such as human capital and age.
D)   play a role, and it is fully explained within the context of compensating differentials.E) A) and C)
F) A) and D)

Question 5

Education and on-the-job training are sources of human capital.

Accepted Answer

A) True 
 B)False

Question 6

Figure 19-6 
-Refer to Figure 19-6. Given demand, D1, and supply, S2, how much more do the workers with jobs earn per hour 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 7

Explain the role that consumers play in perpetuating discrimination in labor markets.

Accepted Answer

Consumers are able to exercise their bia...

Question 8

The characteristics of jobs and workers affect

Accepted Answer

A)   labor supply.
B)   labor demand.
C)   equilibrium wages.
D)   All of the above are correct.E) A) and B)
F) C) and D)

Question 9

In the early 20th century, segregation of street cars made streetcar companies

Accepted Answer

A)   more profitable and was supported by private streetcar companies.
B)   more profitable but was opposed by private streetcar companies.
C)   less profitable but was supported by private streetcar companies.
D)   less profitable and was opposed by private streetcar companies.E) B) and C)
F) A) and B)

Question 10

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) None of the above
F) All of the above B

Question 11

Air-traffic controllers get paid high wages given their level of education. They also get frequent breaks and may only work a few days a week. Which of the following could explain their high wage?

Accepted Answer

A)   the long breaks and limited work days
B)   the stress they face
C)   the comparatively low level of education required
D)   All of the above are correct.E) B) and D)
F) None of the above B

Question 12

It is increasingly clear that technological change is the only explanation for an expanding wage gap between high- skill and low-skill workers.

Accepted Answer

A) True 
 B)False

Question 13

Figure 19-5 
-Refer to Figure 19-5. Given demand for labor, D1, and supply of labor, S1, what are the equilibrium wage and quantity of labor?

Accepted Answer

A)   $5 and 250
B)   $6 and 200
C)   $8 and 100
D)   $8 and 400E) A) and C)
F) B) and D) A

Question 14

One reason why better-looking workers may have higher earnings is that physical attractiveness may enhance a worker's productivity for certain jobs, especially for those workers who deal with the public.

Accepted Answer

A) True 
 B)False

Question 15

The primary economic explanation as to why a world-renowned architect cannot attain the "superstar" status that an athlete or actor can attain is that

Accepted Answer

A)   architects' services are not as highly valued by society as are the services of athletes and actors.
B)   only physically attractive people can become superstars, and it would be a coincidence if a highly talented architect were also physically attractive.
C)   government regulations place restrictions on the incomes of architects, but there are no such restrictions on the incomes of athletes or actors.
D)   it is impossible, currently, for an architect to supply his or her services at low cost to every customer.E) A) and B)
F) C) and D)

Question 16

Many kindergarten teachers have advanced education degrees, yet they have lower average earnings than other individuals with similar education levels. A potential explanation for the differences in earnings is that kindergarten teachers

Accepted Answer

A)   have more pleasant working conditions.
B)   have less pleasant working conditions.
C)   work longer hours.
D)   must pass certification tests.E) A) and B)
F) A) and C)

Question 17

Which of the following is not an interpretation of the "beauty premium"?

Accepted Answer

A)   Beautiful workers are not willing to work for lower wages.
B)   Good looks are a type of innate ability causing the worker to be more valuable to the firm.
C)   The beauty premium is a type of discrimination.
D)   Beauty is an indirect measure of other types of ability.E) All of the above
F) B) and D)

Question 18

Which of the following is not an example of a compensating differential? Job A pays more than Job B because Job A requires

Accepted Answer

A)   more international travel to dangerous locations.
B)   two night shifts per month.
C)   careful handling of toxic chemicals.
D)   an advanced degree.E) B) and C)
F) A) and B)

Question 19

The statement "the rich get richer and the poor get poorer" is evident in the fact that

Accepted Answer

A)   the earnings gap between high-skill jobs and low-skill jobs has increased over the last several years.
B)   developing countries do not pay workers the value of their marginal product.
C)   developed economies export high-skill jobs to developing countries.
D)   All of the above are correct.E) B) and C)
F) A) and D)

Question 20

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 C)
F) A) and B)

Exam 19: Earnings and Discrimination

Which of the following helps to explain the differences in earnings in the United States?

Correct AnswerverifiedShow Answer

Difference in wages can be explained by differences in

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

In determining wages, ability, effort, and chance

Correct AnswerverifiedShow Answer

Education and on-the-job training are sources of human capital.

Correct AnswerverifiedShow Answer

Figure 19-6 -Refer to Figure 19-6. Given demand, D1, and supply, S2, how much more do the workers with jobs earn per hour if a minimum wage of $8 per hour is imposed on this market?

Correct AnswerverifiedShow Answer

Explain the role that consumers play in perpetuating discrimination in labor markets.

Correct AnswerverifiedConsumers are able to exercise their bia...View AnswerShow Answer

The characteristics of jobs and workers affect

Correct AnswerverifiedShow Answer

In the early 20th century, segregation of street cars made streetcar companies

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedB

Air-traffic controllers get paid high wages given their level of education. They also get frequent breaks and may only work a few days a week. Which of the following could explain their high wage?

Correct AnswerverifiedB

It is increasingly clear that technological change is the only explanation for an expanding wage gap between high- skill and low-skill workers.

Correct AnswerverifiedShow Answer

Figure 19-5 -Refer to Figure 19-5. Given demand for labor, D1, and supply of labor, S1, what are the equilibrium wage and quantity of labor?

Correct AnswerverifiedA

One reason why better-looking workers may have higher earnings is that physical attractiveness may enhance a worker's productivity for certain jobs, especially for those workers who deal with the public.

Correct AnswerverifiedShow Answer

The primary economic explanation as to why a world-renowned architect cannot attain the "superstar" status that an athlete or actor can attain is that

Correct AnswerverifiedShow Answer

Many kindergarten teachers have advanced education degrees, yet they have lower average earnings than other individuals with similar education levels. A potential explanation for the differences in earnings is that kindergarten teachers

Correct AnswerverifiedShow Answer

Which of the following is not an interpretation of the "beauty premium"?

Correct AnswerverifiedShow Answer

Which of the following is not an example of a compensating differential? Job A pays more than Job B because Job A requires

Correct AnswerverifiedShow Answer

The statement "the rich get richer and the poor get poorer" is evident in the fact that

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

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Consumers are able to exercise their bia...
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B

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B

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A

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