Question 1

If an employer's behavior is supportive of the theory of efficiency wages, the employer would

Accepted Answer

A)   raise wages in an effort to increase worker effort.
B)   raise wages in an effort to increase worker turnover.
C)   decrease wages in an effort to increase worker effort.
D)   decrease wages in an effort to increase worker turnover.E) All of the above
F) C) and D)

Question 2

Superstars earn high incomes due to their ability to satisfy the demands of millions of people at once.

Accepted Answer

A) True 
 B)False

Question 3

Suppose that the country of Libraria made a concerted effort to increase the educational level of its people. If this effort had no effect on the wages of its workers, one might consider this as evidence in support of

Accepted Answer

A)   the human-capital view of education.
B)   the signaling view of education.
C)   both the human-capital and the signaling view of education.
D)   neither the human-capital nor the signaling view of education.E) A) and C)
F) A) and B)

Question 4

Figure 19-5 
-Refer to Figure 19-5. Given demand for labor, D1, and supply of labor, S1, what is the surplus of labor if a minimum wage of $8 per hour is imposed on this market?

Accepted Answer

A)   100
B)   200
C)   300
D)   400E) A) and D)
F) A) and C)

Question 5

A difference in wages that reflects differences in the nonpay features of two jobs is called

Accepted Answer

A)   a compensating differential.
B)   a wage adjustment.
C)   an efficiency wage.
D)   a minimum wage.E) B) and C)
F) A) and C)

Question 6

Economists would argue that the gender wage gap is narrowing because of efficiency wages.

Accepted Answer

A) True 
 B)False

Question 7

If an older worker earns less than a younger worker for the same job, we have proof of age discrimination.

Accepted Answer

A) True 
 B)False

Question 8

Why do major-league baseball players get paid more than minor-league players?

Accepted Answer

A)   Major-league players are better athletes.
B)   The higher wage reflects a compensating differential.
C)   Playing in the major leagues in more pleasant then playing in the minor leagues.
D)   The higher wage is often due to educational discrepancies.E) C) and D)
F) B) and D)

Question 9

Artie and Angelina attended the same university, graduated with the same degree and grade point average, and are equally productive in their identical new jobs. Still, Angelina's salary is 10% lower than Artie's salary. One can conclude that Angelina likely suffers from

Accepted Answer

The answer of Artie and Angelina attended the same university,...

Question 10

It is argued that competitive markets provide a "natural remedy" to discriminatory wage practices. Which of the following is widely recognized as a potential limit to the potency of that natural remedy?

Accepted Answer

A)   Governments sometimes mandate discriminatory practices.
B)   Some employees have a lot of job experience; others have little job experience.
C)   In a discriminatory environment, a competitive firm that takes prices and wages as given has nothing to gain from any particular choice it makes regarding who to hire or which customers to serve.
D)   Not all firms exhibit social responsibility in sufficient measure to counter discriminatory wage practices.E) A) and C)
F) B) and C)

Question 11

Factory workers who work the day shift earn less per hour than similarly-skilled factory workers who work the night shift. The difference in pay is 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) B) and C)
F) None of the above

Question 12

In empirical analyses of factors that help explain wages,

Accepted Answer

A)   effort and ability are not likely to contribute to large differences in wages in the U.S. economy.
B)   economists typically find that measurable factors explain less than half of the variation in wages.
C)   economists typically find few factors that are not explicitly measurable.
D)   unmeasurable influences on wage differences are found to be quite small.E) B) and C)
F) C) and D)

Question 13

A company has two locations where it employs workers doing the same job and working the same hours. Other things the same most workers would prefer to live in location A, but location A has a higher cost of living than location B.

Accepted Answer

A)   The company likely needs to pay workers in location A more.
B)   The company likely needs to pay workers in location B more.
C)   It's not clear if the company would need to pay more to workers in location A or location B.
D)   The company must pay workers the same amount.E) A) and D)
F) All of the above

Question 14

Which of the following sets of circumstances is likely to provide the best evidence in support of the theory of efficiency wages?

Accepted Answer

A)   Workers in the market are unskilled and not represented by a union, and their wage exceeds both the equilibrium wage and the minimum wage.
B)   Workers in the market are highly skilled and not represented by a union, and their wage exceeds the minimum wage.
C)   Workers in the market are highly skilled and represented by a union, and their wage exceeds the equilibrium wage.
D)   Employers in the market are known for reducing the workers' wage whenever they get an opportunity to do so.E) A) and C)
F) All of the above

Question 15

Discrimination is usually not a profit-maximizing strategy.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following scenarios would serve to decrease the demand for unskilled labor in the U.S.?

Accepted Answer

A)   increased productivity gains among unskilled laborers
B)   increased demand for goods produced by unskilled laborers
C)   increased international trade with countries where unskilled labor is more plentiful
D)   increased supply of migrant workersE) A) and C)
F) None of the above

Question 17

Table 19-2  Source: US Census Bureau and Mankiw's calculations
-Refer to Table 19-2. What conclusion can you draw about the changes in the gaps in earnings between skilled and unskilled workers between 1975 and 2011?

Accepted Answer

The gap ha...

Question 18

The difference in wages that results from nonmonetary characteristics of different jobs is called the

Accepted Answer

compensati...

Question 19

Coal mining is a dangerous and dirty job. Suppose someone developed new machinery that made coal mining safer and cleaner; at the same time, suppose it made coal miners more productive. We would expect that the wages of coal miners would

Accepted Answer

A)   rise.
B)   fall.
C)   stay exactly the same.
D)   rise, fall, or stay the same.E) A) and D)
F) A) and C)

Question 20

Suppose that a college student receives an offer for a summer internship with a stock brokerage firm. Unfortunately for the student, the internship is unpaid. Is it ever economically beneficial to accept an unpaid job?

Accepted Answer

A)   Yes, because the experience gained during the internship would increase the student's human capital.
B)   No, because the opportunity cost is too high.
C)   No, because the student is signaling to future employers that he or she is willing to accept low wages.
D)   Yes, because accepting an unpaid job signals to future employers that the student has stable personal finances.E) C) and D)
F) B) and C)

Exam 19: Earnings and Discrimination

If an older worker earns less than a younger worker for the same job, we have proof of age discrimination.

Correct AnswerverifiedShow Answer

Coal mining is a dangerous and dirty job. Suppose someone developed new machinery that made coal mining safer and cleaner; at the same time, suppose it made coal miners more productive. We would expect that the wages of coal miners would

Correct AnswerverifiedShow Answer

In empirical analyses of factors that help explain wages,

Correct AnswerverifiedShow Answer

Why do major-league baseball players get paid more than minor-league players?

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A company has two locations where it employs workers doing the same job and working the same hours. Other things the same most workers would prefer to live in location A, but location A has a higher cost of living than location B.

Correct AnswerverifiedShow Answer

Which of the following sets of circumstances is likely to provide the best evidence in support of the theory of efficiency wages?

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Which of the following scenarios would serve to decrease the demand for unskilled labor in the U.S.?

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If an employer's behavior is supportive of the theory of efficiency wages, the employer would

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The difference in wages that results from nonmonetary characteristics of different jobs is called the

Correct Answerverifiedcompensati...View AnswerShow Answer

Suppose that a college student receives an offer for a summer internship with a stock brokerage firm. Unfortunately for the student, the internship is unpaid. Is it ever economically beneficial to accept an unpaid job?

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Figure 19-5 -Refer to Figure 19-5. Given demand for labor, D1, and supply of labor, S1, what is the surplus of labor if a minimum wage of $8 per hour is imposed on this market?

Correct AnswerverifiedShow Answer

A difference in wages that reflects differences in the nonpay features of two jobs is called

Correct AnswerverifiedShow Answer

Artie and Angelina attended the same university, graduated with the same degree and grade point average, and are equally productive in their identical new jobs. Still, Angelina's salary is 10% lower than Artie's salary. One can conclude that Angelina likely suffers from

Correct AnswerverifiedShow Answer

It is argued that competitive markets provide a "natural remedy" to discriminatory wage practices. Which of the following is widely recognized as a potential limit to the potency of that natural remedy?

Correct AnswerverifiedShow Answer

Table 19-2 Source: US Census Bureau and Mankiw's calculations -Refer to Table 19-2. What conclusion can you draw about the changes in the gaps in earnings between skilled and unskilled workers between 1975 and 2011?

Correct AnswerverifiedThe gap ha...View AnswerShow Answer

Factory workers who work the day shift earn less per hour than similarly-skilled factory workers who work the night shift. The difference in pay is attributed to

Correct AnswerverifiedShow Answer

Suppose that the country of Libraria made a concerted effort to increase the educational level of its people. If this effort had no effect on the wages of its workers, one might consider this as evidence in support of

Correct AnswerverifiedShow Answer

Discrimination is usually not a profit-maximizing strategy.

Correct AnswerverifiedShow Answer

Superstars earn high incomes due to their ability to satisfy the demands of millions of people at once.

Correct AnswerverifiedShow Answer

Economists would argue that the gender wage gap is narrowing because of efficiency wages.

Correct AnswerverifiedShow Answer

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compensati...
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The gap ha...
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