Question 1

The statement that "coal miners are paid more than workers with similar levels of education" is likely to reflect the fact that

Accepted Answer

A)   coal mining is a declining industry.
B)   coal mining jobs are potentially more dangerous than jobs with comparable education requirements.
C)   all coal mines use nonunion labor.
D)   coal imports are rising.E) All of the above
F) A) and B)

Question 2

If an employer pays a man a higher wage than a woman,the employer

Accepted Answer

A)   is discriminating against the woman but is still maximizing profit.
B)   is not discriminating against the woman.
C)   may or may not be discriminating against the woman.
D)   is discriminating against the woman and is not maximizing profit.E) A) and B)
F) A) and C)

Question 3

Unions are often able to sustain wages above the equilibrium wage because they can threaten to

Accepted Answer

The answer of Unions are often able to sustain wages...

Question 4

Which of the following factors does not affect the value of a worker's marginal product?

Accepted Answer

A)   discrimination against a particular group of workers by a firm's customers
B)   a worker's level of disposable income
C)   a worker's level of human capital
D)   compensating wage differentialsE) A) and C)
F) None of the above

Question 5

Table 19-1
  Source: US Census Bureau and Mankiw's calculations
-Refer to Table 19-1.What are two possible hypotheses to explain the changes in relative demand for high-skilled workers and low-skilled workers in recent years?

Accepted Answer

increases in interna...

Question 6

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) A) and D)

Question 7

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

Question 8

Refer to Scenario 19-5.Why might an economist be skeptical of Billy's discrimination complaint?

Accepted Answer

A)   Through antitrust laws,discriminating firms can be penalized with large fees.
B)   In a competitive market,employers pay employees based on their value to the firm.
C)   Discrimination leads to profit maximization.
D)   Only cost minimizers practice discrimination.E) B) and C)
F) A) and C)

Question 9

Which of the following is an example of a compensating differential?

Accepted Answer

A)   paying workers with more years of experience higher wages than workers with fewer years of experience,all else equal
B)   paying workers who work on the night shift higher wages than workers who work the day shift,all else equal
C)   paying accountants who have passed the Certified Public Accountant exam higher wages than accountants who have not passed it,all else equal
D)   paying workers with PhDs higher wages than workers with BAs,all else equalE) B) and C)
F) All of the above

Question 10

Economists have proposed which of the following hypotheses to explain the rising wage gap between skilled and unskilled workers?

Accepted Answer

A)   Increases in the role of unions in negotiating wages.
B)   Declines in the amount of international trade.
C)   There is no rising wage gap.
D)   Technological change.E) All of the above
F) B) and D)

Question 11

Which of the following does not describe the hypothesis that changes in technology have altered the relative demand for skilled and unskilled labor?

Accepted Answer

A)   Firms rely more on computer databases than on paper filing systems so there is an increased demand for high-skilled computer programmers.
B)   Consumers can accomplish many simple banking tasks on an automated teller machine (ATM) rather than speaking to a bank teller so there is a decreased demand for low- skilled bank tellers.
C)   Transponders in peoples' vehicles can be used to automatically deduct tolls from debit accounts,reducing the need for low-skilled toll collectors.
D)   Improvements in technology have made tax preparation software easy for an average citizen to use,reducing the need for high-skilled accountants.E) B) and C)
F) A) and C)

Question 12

Public school teachers are known to have low wages.Which of the following would push the teachers' wages lower?

Accepted Answer

A)   Public school teacher jobs are difficult.
B)   Public school teachers are required to be college graduates.
C)   Public school teachers belong to a union.
D)   Teaching in a public school has a high element of personal satisfaction.E) A) and D)
F) None of the above

Question 13

Figure 19-1 
-Refer to Figure 19-1.What is the loss associated with wages moving from $8 to $10?

Accepted Answer

A)   2 million jobs.
B)   6 million jobs.
C)   8 million jobs.
D)   14 million jobs.E) None of the above
F) A) and D)

Question 14

A study by labor economists Hamermesh and Biddle found that

Accepted Answer

A)   shorter-than-average men earn more than shorter-than-average women,all else equal.
B)   above-average looking people earn more than average-looking people,all else equal.
C)   shorter women earn more than taller women,all else equal.
D)   All of the above are correct.E) A) and C)
F) All of the above

Question 15

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 16

Which of the following factors affects the marginal productivity of a worker?

Accepted Answer

A)   human capital
B)   the worker's disposable income
C)   compensating wage differentials
D)   discrimination based on age,race,or genderE) None of the above
F) B) and C)

Question 17

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

Question 18

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 19

By definition,there is discrimination when the marketplace offers different opportunities to similar individuals who differ only by

Accepted Answer

A)   race,ethnic group,sex,age,or other personal characteristics.
B)   qualifications,experience,or job preferences.
C)   the levels of human capital.
D)   All of the above are correct.E) A) and D)
F) B) and D)

Question 20

Bayron earns a degree from a top university and is hired by a prominent firm because executives at the firm believe that graduates of this university must have a high ability level or they would not have graduated.Which of the following theories of education do the executives believe?

Accepted Answer

A)   signaling theory
B)   human capital theory
C)   superstar phenomenon
D)   All of the above are correct.E) None of the above
F) A) and B)

Exam 19: Earnings and Discrimination

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

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Bayron earns a degree from a top university and is hired by a prominent firm because executives at the firm believe that graduates of this university must have a high ability level or they would not have graduated.Which of the following theories of education do the executives believe?

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Which of the following factors affects the marginal productivity of a worker?

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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 does not describe the hypothesis that changes in technology have altered the relative demand for skilled and unskilled labor?

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A study by labor economists Hamermesh and Biddle found that

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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?

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Which of the following is an example of a compensating differential?

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Public school teachers are known to have low wages.Which of the following would push the teachers' wages lower?

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The statement that "coal miners are paid more than workers with similar levels of education" is likely to reflect the fact that

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Which of the following statements is correct?

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Economists have proposed which of the following hypotheses to explain the rising wage gap between skilled and unskilled workers?

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If an employer pays a man a higher wage than a woman,the employer

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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

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By definition,there is discrimination when the marketplace offers different opportunities to similar individuals who differ only by

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Refer to Scenario 19-5.Why might an economist be skeptical of Billy's discrimination complaint?

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Which of the following factors does not affect the value of a worker's marginal product?

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Figure 19-1 -Refer to Figure 19-1.What is the loss associated with wages moving from $8 to $10?

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Table 19-1 Source: US Census Bureau and Mankiw's calculations -Refer to Table 19-1.What are two possible hypotheses to explain the changes in relative demand for high-skilled workers and low-skilled workers in recent years?

Correct Answerverifiedincreases in interna...View AnswerShow Answer

Unions are often able to sustain wages above the equilibrium wage because they can threaten to

Correct AnswerverifiedShow Answer

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Men and women may,on average,select diff...
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increases in interna...
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