Question 1

As a result of an increase in the earnings gap between skilled and unskilled jobs, the incentive to get a college education has been declining.

Accepted Answer

A) True 
 B)False

Question 2

One example of labor-market discrimination is that a firm may be less likely to interview a job candidate whose resume clearly indicates he is not a good fit for the job.

Accepted Answer

A) True 
 B)False

Question 3

Is measuring the effect of discrimination on wages relatively easy or relatively difficult? Explain?

Accepted Answer

It can be relatively difficult...

Question 4

It is likely that efficiency wages will decrease employee effort.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

Consumers are able to exercise their bia...

Question 6

Explain the theory that education acts as a signaling device. How does this contrast with the theory of education as an investment in human capital?

Accepted Answer

The theory of signaling suggests that th...

Question 7

Sometimes workers earn higher wages through chance.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following represents an example of labor-market discrimination?

Accepted Answer

A)  An employer is more likely to grant an interview to a person graduating from Yale than from the local community college.
B)  An employer is more likely to grant an interview to a person graduating from the local community college than from Yale.
C)  An employer is more likely to grant an interview to a woman with a traditionally "white" name such as Jennifer than to a woman with a traditionally "black" name such as Shanice.
D)  An employer is as likely to grant an interview to a person with a traditionally "masculine" name such as "Christian" as a person with a traditionally "feminine" name such as "Hannah."E) A) and C)
F) A) and B)

Question 9

If government regulations make a certain job less dangerous, then we'd expect that the supply of labor for that job would

Accepted Answer

A)  increase, which by itself would raise the wage for that job.
B)  increase, which by itself would reduce the wage for that job.
C)  decrease, which by itself would raise the wage for that job.
D)  decrease, which by itself would reduce the wage for that job.E) C) and D)
F) B) and D)

Question 10

A compensating differential is a difference in wages due to higher levels of education or other forms of human capital.

Accepted Answer

A) True 
 B)False

Question 11

Maria has just graduated from Princeton University and has applied for a job at a major bank. The bank decides to offer Maria a job because they perceive her degree from Princeton to be an indication of her high-ability. To which of the following views of education does the bank subscribe?

Accepted Answer

A)  Signaling
B)  Human-capital view
C)  Superstar phenomenon
D)  Benefits of beautyE) C) and D)
F) A) and D)

Question 12

If we find that some schools direct females away from science and math courses, we have evidence of

Accepted Answer

A)  labor-market discrimination.
B)  discrimination that occurs prior to people entering the labor market.
C)  discrimination by customers.
D)  discrimination by employers.E) A) and B)
F) A) and C)

Question 13

Which of the following is an example of labor-market discrimination? You may assume that worker A and worker B have identical characteristics except for the ones listed. A firm offers a higher salary to worker A than worker B because worker A

Accepted Answer

A)  has more education.
B)  is willing to work the night shift.
C)  is a man, whereas worker B is a woman.
D)  has better performance reviews, indicating higher productivity.E) All of the above
F) A) and B)

Question 14

Some economists suggest that increased international trade with countries that have a greater proportion of unskilled workers has led to an expanding wage gap between high-skill and low-skill workers in the United States.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following examples best describes the signaling theory of education?

Accepted Answer

A)  The hiring manager offers a job to a recent college graduate because she is more beautiful than the rest of the applicants.
B)  The hiring manager offers a job to a recent college graduate because she is expected to be more productive than other applicants due to her educational attainment.
C)  The hiring manager offers a job to a recent college graduate because the hiring manager has a bias toward people with college degrees.
D)  The hiring manager offers a job to a recent college graduate because education is correlated with natural ability.E) B) and C)
F) A) and D)

Question 16

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers offer two main hypotheses:

Accepted Answer

A)  one hypothesis emphasizes education, and the other emphasizes compensating differentials.
B)  one hypothesis emphasizes education, and the other emphasizes international trade.
C)  one hypothesis emphasizes international trade, and the other emphasizes technology.
D)  one hypothesis emphasizes technology, and the other emphasizes compensating differentials.E) A) and C)
F) B) and C)

Question 17

Evidence of discrimination in labor markets

Accepted Answer

A)  applies only to race and gender.
B)  is conclusively identified by large differences in average wages rates between men and women.
C)  is difficult to verify by reference to differences in average wage rates.
D)  is more easily identified on the basis of race than gender.E) A) and D)
F) None of the above

Question 18

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) None of the above
F) A) and B)

Question 19

A recent law school graduate is considering two offers to practice law, one in Louisiana and the other in Nebraska. The Louisiana bar exam is very difficult to pass compared with Nebraska's exam. Assuming all other things equal, the attorney would expect

Accepted Answer

A)  to be unable to predict the wage difference between Nebraska and Louisiana.
B)  to make a lower wage in Louisiana.
C)  to make a lower wage in Nebraska.
D)  wages in Nebraska and Louisiana to be identical.E) A) and B)
F) All of the above

Question 20

The differences in the desirability of different jobs within a company could give rise to a compensating differential between workers.

Accepted Answer

A) True 
 B)False

Exam 19: Earnings and Discrimination

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

If we find that some schools direct females away from science and math courses, we have evidence of

Correct AnswerverifiedShow Answer

One example of labor-market discrimination is that a firm may be less likely to interview a job candidate whose resume clearly indicates he is not a good fit for the job.

Correct AnswerverifiedShow Answer

A compensating differential is a difference in wages due to higher levels of education or other forms of human capital.

Correct AnswerverifiedShow Answer

Sometimes workers earn higher wages through chance.

Correct AnswerverifiedShow Answer

Which of the following examples best describes the signaling theory of education?

Correct AnswerverifiedShow Answer

Which of the following represents an example of labor-market discrimination?

Correct AnswerverifiedShow Answer

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers offer two main hypotheses:

Correct AnswerverifiedShow Answer

If government regulations make a certain job less dangerous, then we'd expect that the supply of labor for that job would

Correct AnswerverifiedShow Answer

A recent law school graduate is considering two offers to practice law, one in Louisiana and the other in Nebraska. The Louisiana bar exam is very difficult to pass compared with Nebraska's exam. Assuming all other things equal, the attorney would expect

Correct AnswerverifiedShow Answer

The differences in the desirability of different jobs within a company could give rise to a compensating differential between workers.

Correct AnswerverifiedShow Answer

Is measuring the effect of discrimination on wages relatively easy or relatively difficult? Explain?

Correct AnswerverifiedIt can be relatively difficult...View AnswerShow Answer

Evidence of discrimination in labor markets

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

As a result of an increase in the earnings gap between skilled and unskilled jobs, the incentive to get a college education has been declining.

Correct AnswerverifiedShow Answer

Explain the theory that education acts as a signaling device. How does this contrast with the theory of education as an investment in human capital?

Correct AnswerverifiedThe theory of signaling suggests that th...View AnswerShow Answer

Maria has just graduated from Princeton University and has applied for a job at a major bank. The bank decides to offer Maria a job because they perceive her degree from Princeton to be an indication of her high-ability. To which of the following views of education does the bank subscribe?

Correct AnswerverifiedShow Answer

Which of the following is an example of labor-market discrimination? You may assume that worker A and worker B have identical characteristics except for the ones listed. A firm offers a higher salary to worker A than worker B because worker A

Correct AnswerverifiedShow Answer

It is likely that efficiency wages will decrease employee effort.

Correct AnswerverifiedShow Answer

Some economists suggest that increased international trade with countries that have a greater proportion of unskilled workers has led to an expanding wage gap between high-skill and low-skill workers in the United States.

Correct AnswerverifiedShow Answer

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It can be relatively difficult...
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Consumers are able to exercise their bia...
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The theory of signaling suggests that th...
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