Question 1

The profit motive counteracts

Accepted Answer

A)   consumer discrimination.
B)   discrimination in sports.
C)   the beauty premium.
D)   None of the above is correct.E) A) and B)
F) A) and C)

Question 2

The theory of efficiency wages suggests 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 B)
F) None of the above

Question 3

Which of the following is not an explanation for why better educated workers earn more,on average,than less educated workers?

Accepted Answer

A)   The higher wages may be a compensating differential for the cost of acquiring the education.
B)   Workers with a college degree signal their higher abilities to potential employers.
C)   Skilled labor is increasingly becoming a substitute for unskilled labor, which raises the earnings of workers with more education.
D)   Better educated workers are more productive, on average.E) B) and D)
F) A) and D)

Question 4

In discussing discrimination and the wage differences that exist between men and women and between blacks and whites,it has been said that "the disease is political even if the symptom is economic." What does this mean?

Accepted Answer

A)   Wage differences persist because the political system has failed to enact laws to equalize wages among all groups.
B)   Wage differences exist because of past discrimination on the part of political bodies such as city councils and school boards.
C)   Wage differences exist because of the differences in the political views of the different groups.
D)   Wage differences exist because the political system is biased against paying compensating differentials.E) A) and C)
F) None of the above

Question 5

Over the past several years,the earnings gap between high-skilled and low-skilled workers has
(i) narrowed because the demand for unskilled labor has risen over time relative to the demand for skilled labor.
(ii) widened because the demand for skilled labor has risen over time relative to the demand for unskilled labor.
(iii) narrowed because the supply of unskilled labor has risen over time relative to the supply of skilled labor.
(iv) widened because the supply of skilled labor has risen over time relative to the supply of unskilled labor.

Accepted Answer

A)   (i)  only
B)   (ii)  only
C)   (i)  and (iii)  only
D)   (ii)  and (iv)  onlyE) A) and C)
F) B) and C)

Question 6

Customer discrimination is illegal in the United States.

Accepted Answer

A) True 
 B)False

Question 7

Explain how compensating differentials could contribute to differences between the average wages of men and women.

Accepted Answer

Men and women may,on average,select diff...

Question 8

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers in the United States offer two main hypotheses.Both hypotheses

Accepted Answer

A)   suggest that demand and supply conditions have played a less important role in determining workers' wages in recent years.
B)   suggest that, over time, the demand for skilled labor has risen relative to the demand for unskilled labor.
C)   emphasize the shrinking importance of international trade in recent years.
D)   emphasize the growing importance of women and teenagers in the workforce in recent years.E) B) and D)
F) None of the above

Question 9

Black men earn an average of 21% less than white men.A labor economist who wants to investigate whether the differences in earnings indicate labor-market discrimination against black men should consider whether black and white men have similar
(i) years of work experience.
(ii) years of education.
(iii) occupations.
(iv) quality of education.

Accepted Answer

A)   (i)  and (ii)  only
B)   (iii)  and (iv)  only
C)   (ii)  only
D)   (i) , (ii) , (iii) , and (iv) E) None of the above
F) A) and B)

Question 10

Which of the following statements is not correct?

Accepted Answer

A)   Some firms pay wages that are above the equilibrium wage.
B)   Workers sometimes form labor unions to push their wages up.
C)   Wages never deviate from the balance of supply and demand in the market for labor.
D)   The federal government mandates that employers pay their workers at least as much as the minimum wage.E) B) and C)
F) All of the above

Question 11

A signaling theory of education suggests that educational attainment

Accepted Answer

A)   is a signal of high marginal productivity.
B)   is correlated with natural ability.
C)   increases the productivity of low-ability workers.
D)   Both a and b are correct.E) B) and D)
F) A) and B)

Question 12

Which of the following statements is correct?

Accepted Answer

A)   Differences in human capital may explain differences in wages between blacks and whites.
B)   Racial discrimination is the strongest explanation for differences in wages between blacks and whites.
C)   Gender discrimination is the strongest explanation for differences in wages between blacks and whites.
D)   None of the above statements is correct.E) B) and C)
F) A) and B)

Question 13

Scenario 19-4
Assume that the labor market for barbers is competitive and that it is differentiated into two groups: barbers who are bald (or going bald)  and those who have a full head of hair. Assume that the barbers in this market have identical hair-cutting ability, regardless of whether they are bald or not. Currently the equilibrium wage in the bald barber market is lower than that in the nonbald market. Further assume that the market for haircuts is competitive.
-Refer to Scenario 19-4.If consumers do not discriminate between bald barbers and barbers with hair,then

Accepted Answer

A)   all barbershops now earn a normal economic profit.
B)   competition will ensure the difference in wages will persist.
C)   barbershops that hire barbers with hair will be more profitable than those that don't.
D)   barbershops that hire bald barbers will be more profitable than those that don't.E) B) and C)
F) A) and D)

Question 14

According to economic historians,streetcars in southern cities in the early 1900s were racially segregated because the owners of the firms believed that segregation raised the firms' profits.

Accepted Answer

A) True 
 B)False

Question 15

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

Question 16

Bill and Phil are identical twins who attended grammar school through college together.Bill took a job as an engineer who does not have to travel out of the state.Phil took a job as an engineer who must travel out of state once a week.Bill earns $105,000 a year,and Phil earns $185,000 a year.Select the best explanation for this wage difference.

Accepted Answer

A)   Phil has more human capital relative to Bill.
B)   Phil has less human capital relative to Bill.
C)   Phil receives a higher wage to compensate for the disagreeable nature of business travel.
D)   Bill's lower salary supports the signaling theory of education.E) A) and D)
F) None of the above

Question 17

Jane and John are twins who attended grammar school through college together.Jane and John both got jobs at a brokerage firm after graduating from college with the same major.They both work equally hard.Jane earns $43,000 a year,and John earns $69,000 a year.Select the best explanation for this wage difference.

Accepted Answer

A)   Jane has less human capital than John.
B)   Jane has more human capital than John.
C)   John has been discriminated against because he is male.
D)   Jane has been discriminated against because she is female.E) None of the above
F) A) and D)

Question 18

Empirical evidence suggests that ability,effort,and chance are not likely to be significant contributors to wage differences.

Accepted Answer

A) True 
 B)False

Question 19

On average,truck drivers who drive on dangerous ice-covered roads earn more per mile driven than similarly skilled truck drivers who drive on normal roads.The difference in pay can be attributed to

Accepted Answer

A)   the marginal product of labor.
B)   the marginal product of capital.
C)   diminishing marginal returns.
D)   a compensating differential.E) A) and B)
F) All of the above

Question 20

People who grew up in the western part of Aquilonia have an accent distinct from people who grew up in the eastern part of the country.People from the west also receive lower wages than people from the east.From this information alone,we can conclude that it is possible that

Accepted Answer

A)   discrimination against people from the west exists.
B)   people from the east receive compensating differentials.
C)   people from the west have lower levels of human capital.
D)   All of the above could be correct.E) A) and C)
F) B) and C)

Exam 19: Earnings and Discrimination.

Correct Answer
verified

Which of the following is not an explanation for why better educated workers earn more,on average,than less educated workers?

Correct Answer
verified

People who grew up in the western part of Aquilonia have an accent distinct from people who grew up in the eastern part of the country.People from the west also receive lower wages than people from the east.From this information alone,we can conclude that it is possible that

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers in the United States offer two main hypotheses.Both hypotheses

Correct Answer
verified

Empirical evidence suggests that ability,effort,and chance are not likely to be significant contributors to wage differences.

Correct Answer
verified

On average,truck drivers who drive on dangerous ice-covered roads earn more per mile driven than similarly skilled truck drivers who drive on normal roads.The difference in pay can be attributed to

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Customer discrimination is illegal in the United States.

Correct Answer
verified

The theory of efficiency wages suggests that

Correct Answer
verified

The profit motive counteracts

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Explain how compensating differentials could contribute to differences between the average wages of men and women.

Correct Answer
verified
Men and women may,on average,select diff...
View Answer

Which of the following statements is not correct?

Correct Answer
verified

A signaling theory of education suggests that educational attainment

Correct Answer
verified

In discussing discrimination and the wage differences that exist between men and women and between blacks and whites,it has been said that "the disease is political even if the symptom is economic." What does this mean?

Correct Answer
verified

According to economic historians,streetcars in southern cities in the early 1900s were racially segregated because the owners of the firms believed that segregation raised the firms' profits.

Correct Answer
verified

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

Correct Answer
verified

Exam 19: Earnings and Discrimination.

Correct AnswerverifiedShow Answer

Which of the following is not an explanation for why better educated workers earn more,on average,than less educated workers?

Correct AnswerverifiedShow Answer

People who grew up in the western part of Aquilonia have an accent distinct from people who grew up in the eastern part of the country.People from the west also receive lower wages than people from the east.From this information alone,we can conclude that it is possible that

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers in the United States offer two main hypotheses.Both hypotheses

Correct AnswerverifiedShow Answer

Empirical evidence suggests that ability,effort,and chance are not likely to be significant contributors to wage differences.

Correct AnswerverifiedShow Answer

On average,truck drivers who drive on dangerous ice-covered roads earn more per mile driven than similarly skilled truck drivers who drive on normal roads.The difference in pay can be attributed to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Customer discrimination is illegal in the United States.

Correct AnswerverifiedShow Answer

The theory of efficiency wages suggests that

Correct AnswerverifiedShow Answer

The profit motive counteracts

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Explain how compensating differentials could contribute to differences between the average wages of men and women.

Correct AnswerverifiedMen and women may,on average,select diff...View AnswerShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

A signaling theory of education suggests that educational attainment

Correct AnswerverifiedShow Answer

In discussing discrimination and the wage differences that exist between men and women and between blacks and whites,it has been said that "the disease is political even if the symptom is economic." What does this mean?

Correct AnswerverifiedShow Answer

According to economic historians,streetcars in southern cities in the early 1900s were racially segregated because the owners of the firms believed that segregation raised the firms' profits.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Men and women may,on average,select diff...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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