Question 1

In an environment of tournament pay, it is quite likely that marginally more productive employees will receive

Accepted Answer

A)  less than their marginal revenue product, while less productive employees receive more than theirs. 
B)  more than their marginal revenue product, while less productive employees receive less than theirs. 
C)  more than their marginal revenue product, as do less productive employees. 
D)  less than their marginal revenue product, as do less productive employees. 
A)  less than their marginal revenue product, while less productive employees receive more than theirs. 
B)  more than their marginal revenue product, while less productive employees receive less than theirs. 
C)  more than their marginal revenue product, as do less productive employees. 
D)  less than their marginal revenue product, as do less productive employees. B

Question 2

Which of the following is most likely to increase the market wage rate in a job category?

Accepted Answer

A)  The employer provides a generous pension plan. 
B)  The work is widely viewed as safe and not stressful. 
C)  The job is widely viewed as interesting and prestigious. 
D)  The job requires employees to move from city to city quite often. 
A)  The employer provides a generous pension plan. 
B)  The work is widely viewed as safe and not stressful. 
C)  The job is widely viewed as interesting and prestigious. 
D)  The job requires employees to move from city to city quite often. D

Question 3

Window cleaners that work the top floors of high-rise office buildings are, on average, paid approximately 30 percent more an hour than those that clean windows on the bottom floor. This is an example of

Accepted Answer

A)  employment discrimination. 
B)  non-pecuniary job benefits. 
C)  irrational wage compensation. 
D)  compensating wage differentials. 
A)  employment discrimination. 
B)  non-pecuniary job benefits. 
C)  irrational wage compensation. 
D)  compensating wage differentials. D

Question 4

The real wages of workers will tend to be high when

Accepted Answer

A)  output per worker is high. 
B)  capital is scarce. 
C)  industries are automating at a slow rate. 
D)  profits are low. 
A)  output per worker is high. 
B)  capital is scarce. 
C)  industries are automating at a slow rate. 
D)  profits are low.

Question 5

The earnings of all employees in a competitive economy would be equal if

Accepted Answer

A)  all individuals were homogeneous. 
B)  all jobs were equally attractive. 
C)  workers were perfectly mobile among jobs. 
D)  all of the above are true. 
A)  all individuals were homogeneous. 
B)  all jobs were equally attractive. 
C)  workers were perfectly mobile among jobs. 
D)  all of the above are true.

Question 6

(I) Differences in worker productivity are one major reason why individual earnings differ. (II) Even if all workers were identical, differences in the desirability of jobs would still cause earnings differentials.

Accepted Answer

A)  Both I and II are true. 
B)  I is true; II is false. 
C)  I is false; II is true. 
D)  Both I and II are false. 
A)  Both I and II are true. 
B)  I is true; II is false. 
C)  I is false; II is true. 
D)  Both I and II are false.

Question 7

Joanne states: "The best way to increase the wages of workers is to increase worker productivity." Is Joanne correct? Why or why not?

Accepted Answer

Joanne is correct. High produc

Question 8

Which of the following best explains why productive workers can command high wages?

Accepted Answer

A)  the bargaining power of labor unions. 
B)  the presence of minimum wage legislation. 
C)  wage and price controls that reflect the political power of labor organizations. 
D)  competition among employers for productive workers. 
A)  the bargaining power of labor unions. 
B)  the presence of minimum wage legislation. 
C)  wage and price controls that reflect the political power of labor organizations. 
D)  competition among employers for productive workers.

Question 9

Millionaires tend to be older than the general population because

Accepted Answer

A)  older workers generally have more education than younger workers. 
B)  many achieve millionaire status by saving from a relatively modest income, and this will take a lengthy period of time. 
C)  the earnings of most people peak during the retirement phase of life. 
D)  older people have less to do, and therefore, they have more time to come up with innovative ideas. 
A)  older workers generally have more education than younger workers. 
B)  many achieve millionaire status by saving from a relatively modest income, and this will take a lengthy period of time. 
C)  the earnings of most people peak during the retirement phase of life. 
D)  older people have less to do, and therefore, they have more time to come up with innovative ideas.

Question 10

Economic theory suggests that the standard of living of American workers would rise if

Accepted Answer

A)  the minimum wage were doubled. 
B)  automation was outlawed. 
C)  the amount of physical capital increased. 
D)  technological setbacks lowered output per worker hour. 
A)  the minimum wage were doubled. 
B)  automation was outlawed. 
C)  the amount of physical capital increased. 
D)  technological setbacks lowered output per worker hour.

Question 11

When earnings differentials are adjusted for such factors as age, education, and marital status, the

Accepted Answer

A)  differential between the earnings of white males and those of minority males increases. 
B)  differential between the earnings of white males and those of minority males decreases. 
C)  corrected earnings of minority males are equal to those of similar white men. 
D)  corrected earnings of minority males are greater than those of similar white men. 
A)  differential between the earnings of white males and those of minority males increases. 
B)  differential between the earnings of white males and those of minority males decreases. 
C)  corrected earnings of minority males are equal to those of similar white men. 
D)  corrected earnings of minority males are greater than those of similar white men.

Question 12

If a firm refuses to hire any minorities due to a personal prejudice, its profits will

Accepted Answer

A)  increase markedly. 
B)  decrease. 
C)  not be affected. 
D)  increase slightly. 
A)  increase markedly. 
B)  decrease. 
C)  not be affected. 
D)  increase slightly.

Question 13

Which of the following is the primary source of rapid growth in the real earnings of workers?

Accepted Answer

A)  strong unions 
B)  government regulation of labor markets 
C)  rapid growth in worker productivity 
D)  increases in the minimum wage 
A)  strong unions 
B)  government regulation of labor markets 
C)  rapid growth in worker productivity 
D)  increases in the minimum wage

Question 14

Sally and Joe recently graduated from college, both majoring in history. Joe took a prestigious job as a legal clerk. Sally took a job as a specialist in fighting forest fires. Both received additional training before entering their jobs. Who will likely earn a higher salary and why?

Accepted Answer

We can identify two reasons that Sally w

Question 15

Which of the following is most likely to cause the productivity of labor to increase?

Accepted Answer

A)  higher money wages. 
B)  an increase in the proportion of the workforce that belongs to a labor union. 
C)  more flexible working hours and improved retirement plans. 
D)  a higher rate of investment in human and nonhuman capital. 
A)  higher money wages. 
B)  an increase in the proportion of the workforce that belongs to a labor union. 
C)  more flexible working hours and improved retirement plans. 
D)  a higher rate of investment in human and nonhuman capital.

Question 16

Which of the following is the primary source of cross-country differences in the real earnings of workers?

Accepted Answer

A)  differences in natural resource endowments 
B)  differences in output per worker 
C)  differences in the average number of hours worked 
D)  differences in the share of workers that are members of a labor union 
E)  access to modern technology 
A)  differences in natural resource endowments 
B)  differences in output per worker 
C)  differences in the average number of hours worked 
D)  differences in the share of workers that are members of a labor union 
E)  access to modern technology

Question 17

In a market economy, which of the following is most important if one is going to achieve high earnings?

Accepted Answer

A)  hard work 
B)  provision of goods and/or services that others value highly 
C)  having a graduate degree in a field like history or sociology 
D)  membership in a labor union 
A)  hard work 
B)  provision of goods and/or services that others value highly 
C)  having a graduate degree in a field like history or sociology 
D)  membership in a labor union

Question 18

Automated production methods are only attractive when they

Accepted Answer

A)  reduce labor productivity. 
B)  replace workers. 
C)  decrease per-unit costs of production. 
D)  lower wages. 
A)  reduce labor productivity. 
B)  replace workers. 
C)  decrease per-unit costs of production. 
D)  lower wages.

Question 19

A compensation structure that generates much higher pay rates for the top performers, while those whose productivity is only a little lower receive substantially less compensation is called

Accepted Answer

A)  tournament pay. 
B)  competing differentials. 
C)  dueling executives. 
D)  winner take all. 
A)  tournament pay. 
B)  competing differentials. 
C)  dueling executives. 
D)  winner take all.

Question 20

Which of the following is true?

Accepted Answer

A)  Automated production processes are generally adopted regardless of whether they reduce costs. 
B)  Automated production processes eliminate jobs and, thereby, endanger our future living standards. 
C)  Cost-reducing automated production techniques will expand output directly and/or release scarce resources for the expansion of output in other areas. 
D)  Use of the most advanced technology will always minimize the cost of a productive activity. 
A)  Automated production processes are generally adopted regardless of whether they reduce costs. 
B)  Automated production processes eliminate jobs and, thereby, endanger our future living standards. 
C)  Cost-reducing automated production techniques will expand output directly and/or release scarce resources for the expansion of output in other areas. 
D)  Use of the most advanced technology will always minimize the cost of a productive activity.

In an environment of tournament pay, it is quite likely that marginally more productive employees will receive

Which of the following is most likely to increase the market wage rate in a job category?

Window cleaners that work the top floors of high-rise office buildings are, on average, paid approximately 30 percent more an hour than those that clean windows on the bottom floor. This is an example of

The real wages of workers will tend to be high when

The earnings of all employees in a competitive economy would be equal if

(I) Differences in worker productivity are one major reason why individual earnings differ. (II) Even if all workers were identical, differences in the desirability of jobs would still cause earnings differentials.

Joanne states: "The best way to increase the wages of workers is to increase worker productivity." Is Joanne correct? Why or why not?

Which of the following best explains why productive workers can command high wages?

Millionaires tend to be older than the general population because

Economic theory suggests that the standard of living of American workers would rise if

When earnings differentials are adjusted for such factors as age, education, and marital status, the

If a firm refuses to hire any minorities due to a personal prejudice, its profits will

Which of the following is the primary source of rapid growth in the real earnings of workers?

Sally and Joe recently graduated from college, both majoring in history. Joe took a prestigious job as a legal clerk. Sally took a job as a specialist in fighting forest fires. Both received additional training before entering their jobs. Who will likely earn a higher salary and why?

Which of the following is most likely to cause the productivity of labor to increase?

Which of the following is the primary source of cross-country differences in the real earnings of workers?

In a market economy, which of the following is most important if one is going to achieve high earnings?

Automated production methods are only attractive when they

A compensation structure that generates much higher pay rates for the top performers, while those whose productivity is only a little lower receive substantially less compensation is called

Which of the following is true?

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Applying the Basics: Special Topics in Economics

Filters

Exam 13: Earnings, Productivity, and the Job Market

In an environment of tournament pay, it is quite likely that marginally more productive employees will receive

Which of the following is most likely to increase the market wage rate in a job category?

Window cleaners that work the top floors of high-rise office buildings are, on average, paid approximately 30 percent more an hour than those that clean windows on the bottom floor. This is an example of

The real wages of workers will tend to be high when

The earnings of all employees in a competitive economy would be equal if

(I) Differences in worker productivity are one major reason why individual earnings differ. (II) Even if all workers were identical, differences in the desirability of jobs would still cause earnings differentials.

Joanne states: "The best way to increase the wages of workers is to increase worker productivity." Is Joanne correct? Why or why not?

Which of the following best explains why productive workers can command high wages?

Millionaires tend to be older than the general population because

Economic theory suggests that the standard of living of American workers would rise if

When earnings differentials are adjusted for such factors as age, education, and marital status, the

If a firm refuses to hire any minorities due to a personal prejudice, its profits will

Which of the following is the primary source of rapid growth in the real earnings of workers?

Sally and Joe recently graduated from college, both majoring in history. Joe took a prestigious job as a legal clerk. Sally took a job as a specialist in fighting forest fires. Both received additional training before entering their jobs. Who will likely earn a higher salary and why?

Which of the following is most likely to cause the productivity of labor to increase?

Which of the following is the primary source of cross-country differences in the real earnings of workers?

In a market economy, which of the following is most important if one is going to achieve high earnings?

Automated production methods are only attractive when they

A compensation structure that generates much higher pay rates for the top performers, while those whose productivity is only a little lower receive substantially less compensation is called

Which of the following is true?

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Applying the Basics: Special Topics in Economics

Filters