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Exam 19: Earnings and Discrimination

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Question 21

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Evidence of discrimination is most apparent when one compares wages among broad groups.

A) True
B) False

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Question 22

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Effective minimum-wage laws will most likely

A) increase demand for labor.
B) create a surplus of labor.
C) increase incomes for all unskilled workers.
D) decrease incomes for all unskilled workers.

E) None of the above
F) B) and D)

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Question 23

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Some economists argue that changes in U.S. trade flows have altered the gap between wages of skilled and unskilled workers. Explain.

Which of the following is the most likely outcome of raising the minimum wage?

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. Competition in the market for haircuts is consistent with which of the following statements?

After an employer pays the cost of educating a worker, the

Figure 19-5 -Refer to Figure 19-5. Given demand for labor, D₁, and supply of labor, S₂, what is the surplus of labor if a minimum wage of $8 per hour is imposed on this market?

Scenario 19-7 ​ Suppose that in the competitive market for auto repair, firms prefer to hire men rather than women. Assume that the women applying for positions have the same skills, experience, and work ethic as the men. As a result of this discrimination, the demand for women is lower than it otherwise would be. -Refer to Scenario 19-7. Suppose that consumers prefer to have men work on their auto repairs and are willing to pay higher prices to accommodate these preferences. What will happen to the wage differential between men and women?

Since measurable factors such as years of experience and years of education explain less than half of the variation in wages, ability, effort, and chance must play a significant role in determining wages.

One reason why better-looking workers may have higher earnings is that physical attractiveness is correlated with intelligence.

Kiara is the best eye surgeon in town, and she earns $250,000 a year. Jasmine is an average eye surgeon in town, and she earns $180,000 a year. Kiara's skills as a surgeon are

Figure 19-2 -Refer to Figure 19-2. This figure depicts labor demand and supply in a nonunionized labor market. If the minimum wage were $7.50, employment in this market would be

Figure 19-4 -Refer to Figure 19-4. If a union is successful in reducing supply from S₁ to S₂, the wage will

Once during a 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.

Economists generally agree that

According to a study of the "beauty premium," how do the wages of people with average looks compare to those of people considered less attractive than average?

Figure 19-8 ​ ​ -Refer to Figure 19-8. The figure shows labor demand and labor supply in a non-unionized labor market. Suppose the current labor demand is D1 and the current labor supply is S1. If a firm in this market decided to pay its workers $18 per hour to increase the productivity of its workers, this firm would be paying a(n)

Which of the following scenarios exhibits statistical discrimination?

Which of the following cannot be used to help explain wage differences among different groups of workers?

Jen is a waitress, and she gets paid an additional $2.00 per hour for agreeing to work on Valentine's Day. Jamie is also a waitress, but she did not work on Valentine's Day and hence did not get the extra $2.00 per hour. This difference in pay is an example of differences in human capital.