Question 1

According to evidence provided by the U.S. government, the median black

Accepted Answer

A)  woman is paid roughly the same as the median white woman.
B)  woman is paid roughly the same as the median black man.
C)  man is paid 21 percent less than the median white man.
D)  All of the above are correct.E) All of the above
F) A) and B)

Question 2

A cutting-edge biotech firm is hiring recent college graduates. To attract the very best applicants and to increase worker effort the firm is paying a wage 20% higher than the market wage for entry level employees in this industry. What is the term for the wage paid in this example?

Accepted Answer

The answer of A cutting-edge biotech firm is hiring recent...

Question 3

In the United States, the earnings gap between workers with college degrees and workers with high school degrees

Accepted Answer

A)  has never been documented by reliable evidence.
B)  is evident, but it has remained roughly constant over the past several years.
C)  is evident, but it has diminished over the last several years.
D)  is evident, and it has widened over the last several years.E) A) and B)
F) A) and C)

Question 4

Differences in human capital are likely to

Accepted Answer

A)  be unrelated to wage rate differences across gender classifications, since both men and women are required to complete requirements for a high school diploma.
B)  be most helpful in explaining age discrimination, but unhelpful in explaining race discrimination.
C)  explain some of the differences in average wage rates across age classifications.
D)  explain all of the differences in average wage rates across gender classifications.E) None of the above
F) C) and D)

Question 5

Scenario 19-2
Travis, a student at a community college, is considering what he should do for summer employment. Two recruiters show up at his school in search of summer workers. Recruiter A is looking for workers to help a disaster relief agency distribute food aid in Africa. Recruiter B is looking for custodial help to clean motel rooms in a motel located near the entrance to a famous national park.
-Refer to Scenario 19-2. Travis is carefully considering the options that each recruiter presents. On the basis of knowledge obtained in his economics class, Travis concludes that

Accepted Answer

A)  if the motel job also requires an ability to do general plumbing repairs, the wage offer will be higher than otherwise.
B)  if the food distribution job has a requirement for special training or certification, the wage offer will be lower than otherwise.
C)  if the food distribution job exposes him to the Ebola virus, the wage will be lower.
D)  if the motel job involves substantial amounts of driving for supplies, the wage offer will be lower than otherwise.E) A) and B)
F) All of the above

Question 6

Scenario 19-6​
The after-school tutoring industry is competitive, and so is the labor market for after-school tutors. Suppose male and female tutors have equal experience and skill. Currently, some tutoring centers are biased and will only hire male tutors, while unbiased tutoring centers desire to hire the cheapest tutors and do not care about their genders. As a result, the equilibrium wage for male tutors is higher than that of female tutors.
-Refer to Scenario 19-6. If consumers do not discriminate between biased and unbiased tutoring centers, then

Accepted Answer

A)  price of tutoring must increase in the short run to account for higher cost to biased tutoring centers.
B)  competition in the after-school tutoring industry will ensure the difference in wages will persist in the long run.
C)  biased tutoring centers will be more profitable than unbiased tutoring centers in the short run.
D)  unbiased tutoring centers will be more profitable than biased tutoring centers in the short run.E) All of the above
F) B) and C)

Question 7

Figure 19-2 
-Refer to Figure 19-2. This figure depicts labor demand and supply in a nonunionized labor market. The original equilibrium wage is $10. If a labor union subsequently establishes a union shop and negotiates an hourly wage of $12.50, then there will be an excess

Accepted Answer

A)  demand of 100 workers.
B)  demand of 300 workers.
C)  supply of 100 workers.
D)  supply of 300 workers.E) B) and C)
F) C) and D)

Question 8

If, as some economists believe, changes in technology over recent decades have brought about changes in labor markets, then those changes likely have resulted in

Accepted Answer

A)  reduced emphasis on compensating differentials as an explanation for wage differences.
B)  a reduced emphasis on human-capital differences among workers as an explanation for wage differences.
C)  a narrowing of the earnings gap between high-skilled workers and low-skilled workers.
D)  a widening of the earnings gap between high-skilled workers and low-skilled workers.E) C) and D)
F) B) and D)

Question 9

Which of the following is not an example of a compensating differential?

Accepted Answer

A)  Chris is a consultant who is paid more than other workers with similar skills because he is required to travel 80% of the time.
B)  Abby is a teacher who is paid less than other workers with similar skills because she does not have to work during the summer months.
C)  Ben is a businessman who is paid more than other workers with similar skills because he graduated from a prestigious university with honors.
D)  Daphne is a skyscraper window-washer who is paid more than other workers with similar skills because of the risk she faces in her daily job.E) A) and B)
F) A) and C)

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

The wage gap between skilled and unskilled worker has

Accepted Answer

A)  risen; some economists argue that this is partly due to increased international trade.
B)  risen; some economists argue that this is partly due to decreased international trade.
C)  fallen; some economists argue that this is partly due to increased international trade.
D)  fallen; some economists argue that this is partly due to decreased international trade.E) C) and D)
F) B) and D)

Question 12

Scenario 19-2
Travis, a student at a community college, is considering what he should do for summer employment. Two recruiters show up at his school in search of summer workers. Recruiter A is looking for workers to help a disaster relief agency distribute food aid in Africa. Recruiter B is looking for custodial help to clean motel rooms in a motel located near the entrance to a famous national park.
-Refer to Scenario 19-2. Travis is carefully considering the options that each recruiter presents. On the basis of knowledge obtained in his economics class, Travis concludes that

Accepted Answer

A)  if the job in Africa has a lot of job satisfaction, the wage will be higher.
B)  if the job in Africa has a lot of job satisfaction, the wage will be lower.
C)  if the job cleaning motel rooms is miserable work, the wage will be lower.
D)  if the job cleaning motel rooms is not miserable work, the wage will be higher.E) A) and D)
F) B) and D)

Question 13

Consumers are often a primary source of discrimination in labor markets.

Accepted Answer

A) True 
 B)False

Question 14

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

Question 15

In the signaling theory of education,

Accepted Answer

A)  schooling itself does not lead to more productive workers.
B)  chance plays more of a role than in the human-capital theory.
C)  schooling enhances worker productivity.
D)  compensating differentials do not matter.E) All of the above
F) None of the above

Question 16

White women earn an average of 25% less than white men. A labor economist who wants to investigate whether the differences in earnings indicate labor-market discrimination against women should consider whether white men and women have similar
(i) years of work experience.
(ii) educational attainments.
(iii) occupations.
(iv) child care responsibilities.

Accepted Answer

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

Question 17

Scenario 19-6​
The after-school tutoring industry is competitive, and so is the labor market for after-school tutors. Suppose male and female tutors have equal experience and skill. Currently, some tutoring centers are biased and will only hire male tutors, while unbiased tutoring centers desire to hire the cheapest tutors and do not care about their genders. As a result, the equilibrium wage for male tutors is higher than that of female tutors.
-Refer to Scenario 19-6. Long run competition in the after-school tutoring market is consistent with which of the following statements, assuming consumers do not discriminate between male and female tutors?

Accepted Answer

A)  Tutoring centers only hiring male tutors have lower cost, leading to an increase in the demand for male tutors.
B)  All firms that hire only male tutors will shut down because they are not able to compete.
C)  All firms that hire only female tutors will shut down because they are not able to compete.
D)  Nothing will change; All firms will continue to operate as they do now.E) A) and B)
F) None of the above

Question 18

Marcia is a white 23-year-old female, and Joan is a black 23-year-old female. Both Marcia and Joan were economics majors, and they graduated from the same college in the same year with the same GPA. Marcia and Joan both got identical jobs at a brokerage firm after graduating from college. They both work equally hard. Marcia earns $38,000 a year, and Joan earns $30,000 a year. Select the best explanation for this wage difference.

Accepted Answer

A)  Marcia has less human capital than Joan.
B)  Marcia receives a compensating wage differential that Joan does not.
C)  Joan has been discriminated against because she is black.
D)  Marcia has been discriminated against because she is white.E) None of the above
F) B) and D)

Question 19

About what proportion of the variation of wages across workers is explained by factors that can be measured? What are the other factors that explain wage differences but are difficult to measure?

Accepted Answer

About half. The othe...

Question 20

Matthew just graduated from culinary school. He can earn $40,000 a year working for the same local bakery he has worked at since before starting culinary school, or accept a job offer he received after graduation from a high-end restaurant paying $70,000 a year. The higher salary is a result of

Accepted Answer

A)  a compensating differential.
B)  efficient union bargaining.
C)  having more human capital.
D)  pure luck.E) C) and D)
F) A) and B)

Exam 19: Earnings and Discrimination

Consumers are often a primary source of discrimination in labor markets.

Correct Answer
verified

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 Answer
verified

Correct Answer
verified

Which of the following is not an example of a compensating differential?

Correct Answer
verified

About what proportion of the variation of wages across workers is explained by factors that can be measured? What are the other factors that explain wage differences but are difficult to measure?

Correct Answer
verified
About half. The othe...
View Answer

Figure 19-2 -Refer to Figure 19-2. This figure depicts labor demand and supply in a nonunionized labor market. The original equilibrium wage is $10. If a labor union subsequently establishes a union shop and negotiates an hourly wage of $12.50, then there will be an excess

Correct Answer
verified

Matthew just graduated from culinary school. He can earn $40,000 a year working for the same local bakery he has worked at since before starting culinary school, or accept a job offer he received after graduation from a high-end restaurant paying $70,000 a year. The higher salary is a result of

Correct Answer
verified

Correct Answer
verified

Differences in human capital are likely to

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

Correct Answer
verified

Correct Answer
verified

The wage gap between skilled and unskilled worker has

Correct Answer
verified

A cutting-edge biotech firm is hiring recent college graduates. To attract the very best applicants and to increase worker effort the firm is paying a wage 20% higher than the market wage for entry level employees in this industry. What is the term for the wage paid in this example?

Correct Answer
verified

According to evidence provided by the U.S. government, the median black

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

If, as some economists believe, changes in technology over recent decades have brought about changes in labor markets, then those changes likely have resulted in

Correct Answer
verified

In the United States, the earnings gap between workers with college degrees and workers with high school degrees

Correct Answer
verified

In the signaling theory of education,

Correct Answer
verified

Exam 19: Earnings and Discrimination

Consumers are often a primary source of discrimination in labor markets.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is not an example of a compensating differential?

Correct AnswerverifiedShow Answer

About what proportion of the variation of wages across workers is explained by factors that can be measured? What are the other factors that explain wage differences but are difficult to measure?

Correct AnswerverifiedAbout half. The othe...View AnswerShow Answer

Figure 19-2 -Refer to Figure 19-2. This figure depicts labor demand and supply in a nonunionized labor market. The original equilibrium wage is $10. If a labor union subsequently establishes a union shop and negotiates an hourly wage of $12.50, then there will be an excess

Correct AnswerverifiedShow Answer

Matthew just graduated from culinary school. He can earn $40,000 a year working for the same local bakery he has worked at since before starting culinary school, or accept a job offer he received after graduation from a high-end restaurant paying $70,000 a year. The higher salary is a result of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Differences in human capital are likely to

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The wage gap between skilled and unskilled worker has

Correct AnswerverifiedShow Answer

A cutting-edge biotech firm is hiring recent college graduates. To attract the very best applicants and to increase worker effort the firm is paying a wage 20% higher than the market wage for entry level employees in this industry. What is the term for the wage paid in this example?

Correct AnswerverifiedShow Answer

According to evidence provided by the U.S. government, the median black

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If, as some economists believe, changes in technology over recent decades have brought about changes in labor markets, then those changes likely have resulted in

Correct AnswerverifiedShow Answer

In the United States, the earnings gap between workers with college degrees and workers with high school degrees

Correct AnswerverifiedShow Answer

In the signaling theory of education,

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
About half. The othe...
View Answer

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified