Question 1

According to economic historians,streetcars in southern cities in the early 1900s were racially segregated because the owners of the firms believed that segregation raised the firms' profits.

Accepted Answer

A) True 
 B)False

Question 2

A "technology" hypothesis has been advanced as an explanation for the widening earnings gap between skilled and unskilled workers in the United States.This hypothesis emphasizes the likelihood that technological advances have

Accepted Answer

A)   increased the supply of both skilled and unskilled workers.
B)   increased the supply of skilled workers and decreased the supply of unskilled workers.
C)   increased the demand for skilled workers and decreased the demand for unskilled workers.
D)   decreased the demand for both skilled and unskilled workers.E) A) and B)
F) A) and C)

Question 3

Economists who study labor markets have discovered that

Accepted Answer

A)   only about 5 percent of wage differences are related to chance.
B)   ability is not difficult to measure but is largely insignificant in explaining wage differences.
C)   work effort is difficult to measure but is not likely to contribute much to an explanation of wage differences.
D)   ability,effort,and chance are likely to be significant contributors to wage differences.E) A) and B)
F) None of the above

Question 4

Over the past several years,the earnings gap between high-skilled and low-skilled workers has widened because

Accepted Answer

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

Question 5

Differences in human capital among workers can often be attributed to social or political processes rather than economic processes.

Accepted Answer

A) True 
 B)False

Question 6

Customer discrimination is illegal in the United States.

Accepted Answer

A) True 
 B)False

Question 7

A worker association that bargains with employers over wages and working conditions is called

Accepted Answer

A)   a strike.
B)   an oligopoly.
C)   a firm.
D)   a union.E) B) and D)
F) A) and B)

Question 8

Refer to Scenario 19-5.Which of the following statements would weaken Billy's case against his employer?

Accepted Answer

A)   Billy only works part-time;as a result,he has fewer hours of experience even though he has been with the company for more years.
B)   Billy complains of lower back problems;as a result,he frequently gets the easy job of holding the doors open while the movers carry the piano into the customer's house.
C)   The other employees have high school diplomas,but Billy did not graduate from high school.
D)   All of the above statements would weaken Billy's case.E) B) and C)
F) B) and D)

Question 9

Which of the following would not be considered human capital?

Accepted Answer

A)   the training a chef receives in cooking school
B)   the time a chef spends preparing meals in a restaurant practicing his trade
C)   the financial capital a chef uses to start his own restaurant
D)   the skills a chef learns when attending a class about cake decoratingE) All of the above
F) None of the above

Question 10

Traci and Ken both work at the local factory producing tractors.Traci earns $20 per hour working the day shift,and Ken earns $22 per hour working the night shift.Traci and Ken do the same job,have the same experience,and have the same level of education.This means that the

Accepted Answer

A)   higher-paying job has a compensating wage differential of $2 per hour.
B)   higher-paying job has a compensating wage differential of $22 per hour.
C)   higher-paying job is intrinsically more attractive than the lower-paying job.
D)   factory is discriminating against Traci because she is a woman.E) A) and D)
F) B) and C)

Question 11

"The customer is always right" explains

Accepted Answer

A)   efficiency wages.
B)   compensating differentials.
C)   persistent wage discrimination based on consumer preferences.
D)   the higher wages paid to members of a union.E) All of the above
F) A) and B)

Question 12

Some economists suggest that international trade has led to an expanding wage gap between high-skill and low-skill workers in the United States.

Accepted Answer

A) True 
 B)False

Question 13

One of the problems with calculating the true amount of discrimination that takes place in the market for labor is

Accepted Answer

A)   the inability to calculate wage differentials.
B)   the inability to see changes in the wage differentials over a period of time.
C)   the difficulty in measuring productivity differences between workers.
D)   the difficulty in measuring female labor-force participation.E) B) and D)
F) B) and C)

Question 14

Politicians often point to wage differentials as evidence of labor market discrimination against ethnic minorities and women.Economists,however,argue against this approach because

Accepted Answer

A)   they don't believe the wage differential really exists.
B)   they can't agree on a definition of the term "discrimination."
C)   they believe compensating differentials account for all wage differences.
D)   different people may have different wages for reasons unrelated to discrimination.E) All of the above
F) None of the above

Question 15

A study of segregated streetcars in the southern United States in the early twentieth century found which of the following?

Accepted Answer

A)   Firms that ran the streetcars were more interested in segregating customers by race than profits.
B)   The firms that ran the streetcars were unanimous in their support of laws that required segregation of races.
C)   Before the passage of laws that mandated segregation of races on streetcars,segregation of smokers and nonsmokers was more common than segregation of races.
D)   Segregation based on gender was more common than race at first.E) B) and C)
F) A) and B)

Question 16

According to proponents of the signaling theory of education,an increase in the education levels of all workers would

Accepted Answer

A)   increase workers' productivity and increase their wages.
B)   increase workers' productivity but leave their wages unaffected.
C)   leave workers' productivity unaffected but increase their wages.
D)   leave workers' productivity and wages unaffected.E) A) and C)
F) A) and B)

Question 17

Profit-maximizing,competitive firms will not discriminate in the hiring of workers unless consumers exercise a preference for discrimination in product markets or governments mandate discrimination.

Accepted Answer

A) True 
 B)False

Question 18

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) None of the above
F) A) and D)

Question 19

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

Question 20

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) None of the above
F) C) and D)

Exam 19: Earnings and Discrimination

Customer discrimination is illegal in the United States.

Correct AnswerverifiedShow Answer

According to economic historians,streetcars in southern cities in the early 1900s were racially segregated because the owners of the firms believed that segregation raised the firms' profits.

Correct AnswerverifiedShow Answer

Refer to Scenario 19-5.Which of the following statements would weaken Billy's case against his employer?

Correct AnswerverifiedShow Answer

According to proponents of the signaling theory of education,an increase in the education levels of all workers would

Correct AnswerverifiedShow Answer

Some economists suggest that international trade has led to an expanding wage gap between high-skill and low-skill workers in the United States.

Correct AnswerverifiedShow Answer

Traci and Ken both work at the local factory producing tractors.Traci earns $20 per hour working the day shift,and Ken earns $22 per hour working the night shift.Traci and Ken do the same job,have the same experience,and have the same level of education.This means that the

Correct AnswerverifiedShow Answer

Differences in human capital are likely to

Correct AnswerverifiedShow Answer

"The customer is always right" explains

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Profit-maximizing,competitive firms will not discriminate in the hiring of workers unless consumers exercise a preference for discrimination in product markets or governments mandate discrimination.

Correct AnswerverifiedShow Answer

Over the past several years,the earnings gap between high-skilled and low-skilled workers has widened because

Correct AnswerverifiedShow Answer

A worker association that bargains with employers over wages and working conditions is called

Correct AnswerverifiedShow Answer

One of the problems with calculating the true amount of discrimination that takes place in the market for labor is

Correct AnswerverifiedShow Answer

Politicians often point to wage differentials as evidence of labor market discrimination against ethnic minorities and women.Economists,however,argue against this approach because

Correct AnswerverifiedShow Answer

A study of segregated streetcars in the southern United States in the early twentieth century found which of the following?

Correct AnswerverifiedShow Answer

Differences in human capital among workers can often be attributed to social or political processes rather than economic processes.

Correct AnswerverifiedShow Answer

Which of the following would not be considered human capital?

Correct AnswerverifiedShow Answer

Economists who study labor markets have discovered that

Correct AnswerverifiedShow Answer

In determining wages,ability,effort,and chance

Correct AnswerverifiedShow Answer

A "technology" hypothesis has been advanced as an explanation for the widening earnings gap between skilled and unskilled workers in the United States.This hypothesis emphasizes the likelihood that technological advances have

Correct AnswerverifiedShow Answer

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