Question 1

A compensating differential refers to a difference in wages that arises from nonmonetary characteristics.

Accepted Answer

A) True 
 B)False

Question 2

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 3

The market wage could be higher than the equilibrium wage if a worker

Accepted Answer

A)   is a superstar.
B)   belongs to a labor union.
C)   has more human capital.
D)   All of the above are correct.E) B) and D)
F) All of the above

Question 4

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

Accepted Answer

A)   Two workers with different levels of on-the-job training earn different salaries.
B)   Two workers whose jobs entail different working conditions earn different salaries.
C)   Two workers whose jobs require different levels of technical expertise earn different salaries.
D)   Two workers with different levels of natural ability earn different salaries.E) C) and D)
F) A) and D)

Question 5

John has financial assets totaling $1.5 million,and he plans to use these assets to start his own business.Since John owns these funds and will not need to borrow to start his business,these assets are considered human capital.

Accepted Answer

A) True 
 B)False

Question 6

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) A) and C)
F) All of the above

Question 7

Which of the following explains the "beauty premium" differences in wages?

Accepted Answer

A)   People who spend time on their personal appearance may send a signal that they are more productive workers.
B)   Personal appearance and intelligence are inversely related.
C)   The "superstar phenomenon" explains the "beauty premium."
D)   Better-looking people are more efficient; thus, they are paid an efficiency wage.E) A) and B)
F) A) and C)

Question 8

George and Brad are waiters at a local restaurant.The female customers think that George is better looking than Brad.If George earns more than Brad,this could be an example of each of the following except

Accepted Answer

A)   customer preferences.
B)   discrimination.
C)   a beauty premium.
D)   a compensating differential.E) A) and D)
F) All of the above

Question 9

Store clerks are known to have low wages.This is likely to reflect the fact that

Accepted Answer

A)   store clerk jobs are perceived to be relatively easy, thus attracting low-skill workers.
B)   store clerk jobs are perceived to be relatively difficult, thus attracting high-skill workers.
C)   many people perceive the job of store clerk as having significant risk of death on the job.
D)   store clerks are required to have a college degree.E) A) and D)
F) All of the above

Question 10

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

Accepted Answer

Consumers are able to exercise their bia...

Question 11

Since measurable factors such as years of experience and years of education do not explain a large portion of the variation in wages,ability,effort,and chance must play a significant role in determining wages.

Accepted Answer

A) True 
 B)False

Question 12

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 D)
F) B) and C)

Question 13

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

Question 14

Which of the following can be used to help explain wage differences among different groups of workers?

Accepted Answer

A)   human capital
B)   discrimination
C)   unions
D)   All of the above could explain wage differences among groups.E) A) and D)
F) A) and B)

Question 15

A consensus view among economists regarding the possibility of labor-market discrimination is that

Accepted Answer

A)   most wage differences among groups are attributable to discrimination.
B)   many employers use compensating differentials to hide discriminatory practices.
C)   wage differences among groups are not sufficient by themselves to determine how much discrimination there is.
D)   all wage differences among groups are attributable to differences in human capital and compensating differentials.E) B) and D)
F) C) and D)

Question 16

Attributing the gender wage gap to ongoing discrimination by employers will likely be incorrect because

Accepted Answer

A)   some of the wage gap is explained by efficiency wages.
B)   differences in years of work experience likely lead to productivity differences between men and women.
C)   compensating differentials usually lead to higher wages for women.
D)   All of the above are correct.E) All of the above
F) A) and C)

Question 17

The belief that education makes a person more productive and thereby raises his or her wage is referred to as the

Accepted Answer

A)   compensating-differential view of education.
B)   natural-ability view of education.
C)   unmeasured-variables view of education.
D)   human-capital view of education.E) A) and B)
F) All of the above

Question 18

Economists generally agree that

Accepted Answer

A)   human capital theory provides the best explanation of discriminatory practices.
B)   differences in average wages do not by themselves provide conclusive evidence about the magnitude of discrimination in labor markets.
C)   discrimination is exclusively an economic, rather than political, phenomenon.
D)   most of the wage differentials observed in the U.S. economy are due to discrimination.E) None of the above
F) A) and B)

Question 19

Discrimination may persist even in competitive markets when the source of the discrimination is

Accepted Answer

A)   employer prejudice.
B)   customer prejudice.
C)   wage prejudice.
D)   employee prejudice.E) All of the above
F) B) and C)

Question 20

In the country of Freedonia,men and women have the same level of education and choose different forms of work in the same proportions.The only real difference is that men typically stay home to raise young children,returning to the work force after their children enter elementary school.If no discrimination exists,then we would expect that,on average,

Accepted Answer

A)   women would earn less than men.
B)   women would earn more than men.
C)   men and women would earn the same wage.
D)   wage differences between men and women would be due to differences in beauty.E) None of the above
F) A) and D)

Exam 19: Earnings and Discrimination.

Correct Answer
verified

John has financial assets totaling $1.5 million,and he plans to use these assets to start his own business.Since John owns these funds and will not need to borrow to start his business,these assets are considered human capital.

Correct Answer
verified

In determining wages,ability,effort,and chance

Correct Answer
verified

Which of the following can be used to help explain wage differences among different groups of workers?

Correct Answer
verified

The belief that education makes a person more productive and thereby raises his or her wage is referred to as the

Correct Answer
verified

Economists generally agree that

Correct Answer
verified

Which of the following explains the "beauty premium" differences in wages?

Correct Answer
verified

A study by labor economists Hamermesh and Biddle found that

Correct Answer
verified

A compensating differential refers to a difference in wages that arises from nonmonetary characteristics.

Correct Answer
verified

The market wage could be higher than the equilibrium wage if a worker

Correct Answer
verified

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

Correct Answer
verified
Consumers are able to exercise their bia...
View Answer

George and Brad are waiters at a local restaurant.The female customers think that George is better looking than Brad.If George earns more than Brad,this could be an example of each of the following except

Correct Answer
verified

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 Answer
verified
The theory of signaling suggests that th...
View Answer

Attributing the gender wage gap to ongoing discrimination by employers will likely be incorrect because

Correct Answer
verified

Since measurable factors such as years of experience and years of education do not explain a large portion of the variation in wages,ability,effort,and chance must play a significant role in determining wages.

Correct Answer
verified

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 Answer
verified

Discrimination may persist even in competitive markets when the source of the discrimination is

Correct Answer
verified

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

Correct Answer
verified

A consensus view among economists regarding the possibility of labor-market discrimination is that

Correct Answer
verified

Store clerks are known to have low wages.This is likely to reflect the fact that

Correct Answer
verified

Exam 19: Earnings and Discrimination.

Correct AnswerverifiedShow Answer

John has financial assets totaling $1.5 million,and he plans to use these assets to start his own business.Since John owns these funds and will not need to borrow to start his business,these assets are considered human capital.

Correct AnswerverifiedShow Answer

In determining wages,ability,effort,and chance

Correct AnswerverifiedShow Answer

Which of the following can be used to help explain wage differences among different groups of workers?

Correct AnswerverifiedShow Answer

The belief that education makes a person more productive and thereby raises his or her wage is referred to as the

Correct AnswerverifiedShow Answer

Economists generally agree that

Correct AnswerverifiedShow Answer

Which of the following explains the "beauty premium" differences in wages?

Correct AnswerverifiedShow Answer

A study by labor economists Hamermesh and Biddle found that

Correct AnswerverifiedShow Answer

A compensating differential refers to a difference in wages that arises from nonmonetary characteristics.

Correct AnswerverifiedShow Answer

The market wage could be higher than the equilibrium wage if a worker

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

George and Brad are waiters at a local restaurant.The female customers think that George is better looking than Brad.If George earns more than Brad,this could be an example of each of the following except

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

Attributing the gender wage gap to ongoing discrimination by employers will likely be incorrect because

Correct AnswerverifiedShow Answer

Since measurable factors such as years of experience and years of education do not explain a large portion of the variation in wages,ability,effort,and chance must play a significant role in determining wages.

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

Discrimination may persist even in competitive markets when the source of the discrimination is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A consensus view among economists regarding the possibility of labor-market discrimination is that

Correct AnswerverifiedShow Answer

Store clerks are known to have low wages.This is likely to reflect the fact that

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Consumers are able to exercise their bia...
View Answer

Correct Answer
verified

Correct Answer
verified
The theory of signaling suggests that th...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified