Question 1

In 1913,the Ford Motor Company decided to pay its employees $5 a day.This wage was significantly higher than what any other organization offered.Henry Ford believed that this wage would make his employees happier,increase their productivity,and lower employee turnover.Economists would say that Mr.Ford offered his employees

Accepted Answer

A)  a union.
B)  an efficiency wage.
C)  a diminishing rate of marginal return.
D)  a leisure wage.E) B) and D)
F) A) and C)

Question 2

The theory of efficiency wages suggests that firms may pay above-equilibrium wages

Accepted Answer

A)  to reduce employee turnover.
B)  to prevent unions from recruiting members.
C)  to reduce the need for minimum wage laws.
D)  to increase the demand for better-skilled workers.E) None of the above
F) B) and D)

Question 3

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

Accepted Answer

A)  an increase in both the quantity of labor supplied by workers and the quantity of labor demanded by firms
B)  an increase in the quantity of labor supplied by workers and a decrease in the quantity of labor demanded by firms
C)  a decrease in the quantity of labor supplied by workers and an increase in the quantity of labor demanded by firms
D)  a decrease in both the quantity of labor supplied by workers and the quantity of labor demanded by firmsE) A) and B)
F) A) and C)

Question 4

In what way do competitive markets have a "natural remedy" for discriminatory hiring practices?

Accepted Answer

A)  Federal and state governments naturally step in to resolve problems of discrimination.
B)  Profit-maximizing firms that do not discriminate tend to replace firms that discriminate.
C)  Wages paid to groups that are victimized by discrimination are eventually bid up to above-equilibrium levels.
D)  Discrimination is usually the outcome of rational decision-making processes, and competitive markets produce rational outcomes.E) None of the above
F) All of the above

Question 5

The very high pay earned by the best actors and actresses is partially explained by the fact that

Accepted Answer

A)  they benefit from a compensating differential.
B)  moviegoers all want to see the very best actors, not second-rate actors.
C)  they have acting degrees from accredited acting schools.
D)  the supply of good actors is very large.E) All of the above
F) A) and B)

Question 6

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

Question 7

Evidence of differences in average wages of black workers compared to white workers

Accepted Answer

A)  does not alone provide conclusive evidence of discrimination.
B)  clearly indicates differences in productivity between races.
C)  is seldom used to provide evidence of discriminatory bias.
D)  clearly indicates discrimination on the basis of race.E) A) and B)
F) B) and C)

Question 8

Which of the following statements is true of wages,educational attainment,and gender?

Accepted Answer

A)  Male workers are compensated for attending college, while female workers generally are not.
B)  Female workers are compensated for attending college, while male workers generally are not.
C)  Both genders receive a higher wage for attending college.
D)  Neither gender receives a higher wage for attending college.E) All of the above
F) A) and D)

Question 9

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.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 more human capital relative to John.
B)  Jane has less human capital relative to John.
C)  Jane has been discriminated against because she is female.
D)  John has been discriminated against because he is male.E) B) and C)
F) A) and D)

Question 10

Differences in human capital among groups of workers is possibly a reflection of past discrimination.

Accepted Answer

A) True 
 B)False

Question 11

Economic theory of labor markets suggests that wages are governed by labor supply and labor demand.

Accepted Answer

A) True 
 B)False

Question 12

The accumulation of investments in people,such as education and on the job training,is known as

Accepted Answer

A)  physical capital.
B)  human capital.
C)  efficiency wage.
D)  a union.E) B) and D)
F) A) and B)

Question 13

Nemedia and Aquilonia have just started to trade with each other.Nemedia exports goods produced with skilled labor and imports goods made with unskilled labor from Aquilonia.Over time,we would expect that the wages of skilled labor in Nemedia will

Accepted Answer

A)  rise, and the wages of unskilled labor in Nemedia will fall.
B)  fall, and the wages of unskilled labor in Nemedia will rise.
C)  rise, and the wages of unskilled labor in Nemedia will rise.
D)  fall, and the wages of unskilled labor in Nemedia will fall.E) None of the above
F) A) and D)

Question 14

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 human capital
C)  a worker's level of disposable income
D)  All of the above factors affect the value of a worker's marginal product.E) None of the above
F) A) and B)

Question 15

Which of the following describes the labor market for personal-service workers? (i) 	The supply of workers is increasing as workers displaced by technological innovations seek jobs in the personal-services sector.
(ii) 	The pay of these workers is increasing.
(iii) 	Legal and undocumented immigrants often work in this sector.
(iv) 	Most personal-service jobs require post-high school education or training.

Accepted Answer

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

Question 16

Given that the median male is better paid than the median female,which of the following is not a valid explanation for wage differences?

Accepted Answer

A)  compensating differentials
B)  differences in human capital
C)  discrimination
D)  None of the above can be ruled out as a possible partial explanation.E) A) and D)
F) A) and C)

Question 17

One hypothesis to explain the rising gap in wages between unskilled and skilled workers in the United States is that international trade has altered the relative demands for skilled and unskilled workers.

Accepted Answer

A) True 
 B)False

Question 18

Discrimination is a reflection of some people's prejudice against certain groups in society.

Accepted Answer

A) True 
 B)False

Question 19

Studies of professional sports teams suggest that,in sports,racial discrimination is

Accepted Answer

A)  rare.
B)  common and that owners of teams are largely to blame.
C)  common and that customers (fans)  are largely to blame.
D)  None of the above is correct; there are no reliable studies of discrimination in sports due to the difficulties inherent in measuring athletes' productivity.E) B) and D)
F) B) and C)

Question 20

Which of the following statements is not correct?

Accepted Answer

A)  Unions may raise wages above equilibrium because they can threaten to strike.
B)  Minimum wage laws are most likely to raise the wages of unskilled workers.
C)  Employers may voluntarily pay more than the equilibrium wage to increase worker effort.
D)  Efficiency wages explain why more efficient workers earn more than less efficient workers.E) All of the above
F) A) and C)

Exam 19: Earnings and Discrimination

Differences in human capital among groups of workers is possibly a reflection of past discrimination.

Correct Answer
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Evidence of differences in average wages of black workers compared to white workers

Correct Answer
verified

Studies of professional sports teams suggest that,in sports,racial discrimination is

Correct Answer
verified

Discrimination is a reflection of some people's prejudice against certain groups in society.

Correct Answer
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Correct Answer
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Which of the following statements is not correct?

Correct Answer
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Which of the following statements is true of wages,educational attainment,and gender?

Correct Answer
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Which of the following is the most likely outcome of minimum wage laws?

Correct Answer
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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.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.

Correct Answer
verified

One hypothesis to explain the rising gap in wages between unskilled and skilled workers in the United States is that international trade has altered the relative demands for skilled and unskilled workers.

Correct Answer
verified

Economic theory of labor markets suggests that wages are governed by labor supply and labor demand.

Correct Answer
verified

The very high pay earned by the best actors and actresses is partially explained by the fact that

Correct Answer
verified

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

Correct Answer
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Nemedia and Aquilonia have just started to trade with each other.Nemedia exports goods produced with skilled labor and imports goods made with unskilled labor from Aquilonia.Over time,we would expect that the wages of skilled labor in Nemedia will

Correct Answer
verified

The theory of efficiency wages suggests that firms may pay above-equilibrium wages

Correct Answer
verified

In what way do competitive markets have a "natural remedy" for discriminatory hiring practices?

Correct Answer
verified

Given that the median male is better paid than the median female,which of the following is not a valid explanation for wage differences?

Correct Answer
verified

The accumulation of investments in people,such as education and on the job training,is known as

Correct Answer
verified

Exam 19: Earnings and Discrimination

Differences in human capital among groups of workers is possibly a reflection of past discrimination.

Correct AnswerverifiedShow Answer

Evidence of differences in average wages of black workers compared to white workers

Correct AnswerverifiedShow Answer

Studies of professional sports teams suggest that,in sports,racial discrimination is

Correct AnswerverifiedShow Answer

Discrimination is a reflection of some people's prejudice against certain groups in society.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

Which of the following statements is true of wages,educational attainment,and gender?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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.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.

Correct AnswerverifiedShow Answer

One hypothesis to explain the rising gap in wages between unskilled and skilled workers in the United States is that international trade has altered the relative demands for skilled and unskilled workers.

Correct AnswerverifiedShow Answer

Economic theory of labor markets suggests that wages are governed by labor supply and labor demand.

Correct AnswerverifiedShow Answer

The very high pay earned by the best actors and actresses is partially explained by the fact that

Correct AnswerverifiedShow Answer

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

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

Correct AnswerverifiedShow Answer

Nemedia and Aquilonia have just started to trade with each other.Nemedia exports goods produced with skilled labor and imports goods made with unskilled labor from Aquilonia.Over time,we would expect that the wages of skilled labor in Nemedia will

Correct AnswerverifiedShow Answer

The theory of efficiency wages suggests that firms may pay above-equilibrium wages

Correct AnswerverifiedShow Answer

In what way do competitive markets have a "natural remedy" for discriminatory hiring practices?

Correct AnswerverifiedShow Answer

Given that the median male is better paid than the median female,which of the following is not a valid explanation for wage differences?

Correct AnswerverifiedShow Answer

The accumulation of investments in people,such as education and on the job training,is known as

Correct AnswerverifiedShow Answer

Correct Answer
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