Question 1

Figure 19-1  
-Refer to Figure 19-1. If the minimum wage in this market is $9, then

Accepted Answer

A) employment is 10 million. 
B) employment is 14 million. 
C) there is a surplus of 1 million workers. 
D) there is a surplus of 6 million workers. 
A) employment is 10 million. 
B) employment is 14 million. 
C) there is a surplus of 1 million workers. 
D) there is a surplus of 6 million workers. D

Question 2

Consider two groups of workers of equal skill level and experience: those who collect garbage and those who stuff envelopes with campaign fliers. Which group is likely to be paid more and why?

Accepted Answer

garbage collectors, compensating differentials

Question 3

One example of labor-market discrimination is that firms may be less likely to interview job-market candidates whose names suggest that they are members of a racial minority.

Accepted Answer

A) True 
 B)False  True

Question 4

Kalene and Jin both work at the local factory producing cars. Kalene earns $24 per hour working the day shift, and Jin earns $26 per hour working the night shift. Kalene and Jin 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 $26 per hour. 
C) higher-paying job is intrinsically more attractive than the lower-paying job. 
D) factory is discriminating against Kalene because she is a woman. 
A) higher-paying job has a compensating wage differential of $2 per hour. 
B) higher-paying job has a compensating wage differential of $26 per hour. 
C) higher-paying job is intrinsically more attractive than the lower-paying job. 
D) factory is discriminating against Kalene because she is a woman.

Question 5

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 6

The fact that doctors are paid more than economics professors is an example of a compensating differential.

Accepted Answer

A) True 
 B)False

Question 7

Benjamin and Ian are identical twins who attended elementary school through high school together. Benjamin got a job after high school, and Ian got a job after graduating from college. Benjamin earns $33,000 a year, and Ian earns $62,000 a year. Select the best explanation for this wage difference.

Accepted Answer

A) Benjamin has less human capital than Ian. 
B) Ian has less human capital than Benjamin. 
C) Benjamin has received a compensating differential 
D) Benjamin is a member of a union. 
A) Benjamin has less human capital than Ian. 
B) Ian has less human capital than Benjamin. 
C) Benjamin has received a compensating differential 
D) Benjamin is a member of a union.

Question 8

A study using data from the late 1960s showed that black baseball players earned less than comparable white players. Studies of more recent salaries in baseball, however, have found no evidence of discriminatory wage differentials.

Accepted Answer

A) True 
 B)False

Question 9

Scenario 19-3
In the small town of Houghton, Michigan, there is a local hardware store called Eddy's Hardware. There are only two types of workers who apply for jobs at Eddy's Hardware: cowboys and farm boys. Local politicians have received numerous complaints that Eddy's Hardware is practicing wage discrimination against farm boys. Eddy's Hardware denies the complaint and says the store is only trying to maximize profit.
-Refer to Scenario 19-3. Which of the following statements would strengthen the discrimination complaint against Eddy's Hardware?

Accepted Answer

A) Cowboys call in sick to work more often than farm boys. 
B) Farm boys are more likely than cowboys to work the day shift rather than the night shift. 
C) Cowboys' experience using hardware generally exceeds farm boys' experience using it. 
D) On average farm boys have less experience working at the hardware store than cowboys. 
A) Cowboys call in sick to work more often than farm boys. 
B) Farm boys are more likely than cowboys to work the day shift rather than the night shift. 
C) Cowboys' experience using hardware generally exceeds farm boys' experience using it. 
D) On average farm boys have less experience working at the hardware store than cowboys.

Question 10

If a good is produced with technology that allows the best producer to supply every customer at a low cost and every customer in the market wants to enjoy the good supplied by the best producer, the best producer will be called a

Accepted Answer

The answer of If a good is produced with technology...

Question 11

Why do college graduates earn more in wages than workers with only a high school diploma?

Accepted Answer

They have

Question 12

Efficiency wages will raise the quantity of labor supplied to the market.

Accepted Answer

A) True 
 B)False

Question 13

According to economists Hamermesh and Biddle, how much more do people who are deemed more attractive than average earn?

Accepted Answer

The answer of According to economists Hamermesh and Biddle, how...

Question 14

Scenario 19-4
Assume that the labor market for barbers is competitive and that it is differentiated into two groups: barbers who are bald (or going bald) and those who have a full head of hair. Assume that the barbers in this market have identical hair-cutting ability, regardless of whether they are bald or not. Currently, the equilibrium wage in the bald barber market is lower than that in the nonbald market. Further assume that the market for haircuts is competitive.
-Refer to Scenario 19-4. If consumers do not discriminate between bald barbers and barbers with hair, then

Accepted Answer

A) all barbershops now earn a normal economic profit. 
B) competition will ensure the difference in wages will persist. 
C) barbershops that hire barbers with hair will be more profitable than those that don't. 
D) barbershops that hire bald barbers will be more profitable than those that don't. 
A) all barbershops now earn a normal economic profit. 
B) competition will ensure the difference in wages will persist. 
C) barbershops that hire barbers with hair will be more profitable than those that don't. 
D) barbershops that hire bald barbers will be more profitable than those that don't.

Question 15

Traci is a nurse, and she gets paid an additional $1.00 per hour for agreeing to work the night shift. Carol is also a nurse, but she works the day shift and does not get paid this extra dollar per hour. This difference in pay is an example of a compensating differential.

Accepted Answer

A) True 
 B)False

Question 16

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 17

Figure 19-7
​   ​
-Refer to Figure 19-7. Given demand, D1, and supply, S2, how many workers are unemployed if a minimum wage of $8 per hour is imposed on this market?

Accepted Answer

The answer of Figure 19-7
​   ​
-Refer to Figure...

Question 18

Figure 19-5  
-Refer to Figure 19-5. Given demand for labor, D1, and supply of labor, S2, which of the following could be considered an efficiency wage?

Accepted Answer

A) $7 
B) $6 
C) $5 
D) $8 
A) $7 
B) $6 
C) $5 
D) $8

Question 19

The accumulation of investments in people is called

Accepted Answer

The answer of The accumulation of investments in people is...

Question 20

Certain factors that are probably important in determining wages are nevertheless difficult to measure. Consequently, labor economists find those factors difficult to incorporate into their studies of labor markets and wages. Those factors include

Accepted Answer

A) effort and natural ability. 
B) natural ability and years of experience. 
C) years of experience and job characteristics. 
D) race and job characteristics. 
A) effort and natural ability. 
B) natural ability and years of experience. 
C) years of experience and job characteristics. 
D) race and job characteristics.

Exam 19: Earnings and Discrimination

Figure 19-1 -Refer to Figure 19-1. If the minimum wage in this market is $9, then

Consider two groups of workers of equal skill level and experience: those who collect garbage and those who stuff envelopes with campaign fliers. Which group is likely to be paid more and why?

One example of labor-market discrimination is that firms may be less likely to interview job-market candidates whose names suggest that they are members of a racial minority.

Kalene and Jin both work at the local factory producing cars. Kalene earns $24 per hour working the day shift, and Jin earns $26 per hour working the night shift. Kalene and Jin do the same job, have the same experience, and have the same level of education. This means that the

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.

The fact that doctors are paid more than economics professors is an example of a compensating differential.

Benjamin and Ian are identical twins who attended elementary school through high school together. Benjamin got a job after high school, and Ian got a job after graduating from college. Benjamin earns $33,000 a year, and Ian earns $62,000 a year. Select the best explanation for this wage difference.

A study using data from the late 1960s showed that black baseball players earned less than comparable white players. Studies of more recent salaries in baseball, however, have found no evidence of discriminatory wage differentials.

If a good is produced with technology that allows the best producer to supply every customer at a low cost and every customer in the market wants to enjoy the good supplied by the best producer, the best producer will be called a

Why do college graduates earn more in wages than workers with only a high school diploma?

Efficiency wages will raise the quantity of labor supplied to the market.

According to economists Hamermesh and Biddle, how much more do people who are deemed more attractive than average earn?

Traci is a nurse, and she gets paid an additional $1.00 per hour for agreeing to work the night shift. Carol is also a nurse, but she works the day shift and does not get paid this extra dollar per hour. This difference in pay is an example of a compensating differential.

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?

Figure 19-7 ​ ​ -Refer to Figure 19-7. Given demand, D1, and supply, S2, how many workers are unemployed if a minimum wage of $8 per hour is imposed on this market?

Figure 19-5 -Refer to Figure 19-5. Given demand for labor, D1, and supply of labor, S2, which of the following could be considered an efficiency wage?

The accumulation of investments in people is called

Certain factors that are probably important in determining wages are nevertheless difficult to measure. Consequently, labor economists find those factors difficult to incorporate into their studies of labor markets and wages. Those factors include

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Applications: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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Figure 19-7 -Refer to Figure 19-7. Given demand, D1, and supply, S2, how many workers are unemployed if a minimum wage of $8 per hour is imposed on this market?

Figure 19-5 -Refer to Figure 19-5. Given demand for labor, D₁, and supply of labor, S₂, which of the following could be considered an efficiency wage?