Toàn bộ những gì bạn cần để qua môn kinh tế học, tài liệu này tập hợp những câu hỏi trắc nghiệm mới nhất của kinh tế vi mô năm 2018. Về nội dung tài liệu, với các khái niệm phổ biến và khái quát nhất về kinh tế vi mô cũng như những giải thích về các cơ chế hoạt động của nền kinh tế, bộ giáo trình bao gồm 23 phần cung cấp cho người đọc các kiến thức khá toàn diện và chuyên sâu về các nguyên lý kinh tế học như các lý thuyết cổ điển, các lý thuyết về phát triển: nền kinh tế trong dài hạn, các lý thuyết về vòng tròn kinh tế: nền kinh tế trong ngắn hạn, các yếu tố vi mô ẩn sau kinh tế vĩ mô, các tranh luận về chính sách vĩ mô… Tất cả đều được giải thích và đánh giá bởi một vị giáo sư kinh tế hàng đầu trên thế giới. Các khái niệm trong sách được định nghĩa rất rõ ràng, dễ nắm bắt, dễ hiểu, có tóm tắt các chương tạo điều kiện tốt nhất cho việc ôn tập
Chapter 19/Earnings and Discrimination ❖ Chapter 19 Earnings and Discrimination TRUE/FALSE A compensating differential refers to a difference in wages that arises from nonmonetary characteristics ANS: T DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Compensating differentials MSC: Definitional A compensating differential is a difference in wages due to higher levels of education or other forms of human capital ANS: F DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Compensating differentials MSC: Definitional The fact that doctors are paid more than economics professors is an example of a compensating differential ANS: T DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Compensating differentials MSC: Definitional A computer is an example of productivity-enhancing human capital ANS: F DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: MSC: Definitional Human capital Higher levels of human capital are correlated with higher earnings because firms are willing to pay more for better-educated workers who have higher marginal productivities ANS: T DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Human capital MSC: Interpretive As a result of an increase in the earnings gap between skilled and unskilled jobs, the incentive to get a college education has been declining ANS: F DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Increasing value of skills MSC: Interpretive The rising gap in wages between unskilled and skilled workers is most likely related to a larger increase in demand for unskilled occupations relative to skilled occupations ANS: F DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Increasing value of skills MSC: Interpretive 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 ANS: T DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Increasing value of skills MSC: Interpretive The statement that "the rich get richer, and the poor get poorer" is supported by evidence of an expanding wage gap between high-skill and low-skill workers ANS: T DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Increasing value of skills MSC: Interpretive ❖ Chapter 19/Earnings and Discrimination 10 Some economists suggest that international trade has led to an expanding wage gap between high-skill and low-skill workers in the United States ANS: T DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Increasing value of skills MSC: Interpretive 11 It is increasingly clear that technological change, rather than international trade, has been largely responsible for an expanding wage gap between high-skill and low-skill workers ANS: F DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Increasing value of skills MSC: Interpretive 12 The United States is losing manufacturing jobs to countries like China and India, where manufacturing jobs have increased 30 percent since 1995 ANS: F DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Increasing value of skills MSC: Applicative 13 Since 1995, global manufacturing employment has declined, yet global industrial output has risen ANS: T DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Increasing value of skills MSC: Applicative 14 One explanation for the loss in manufacturing jobs is that new technologies have replaced the need for some workers ANS: T DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Increasing value of skills MSC: Applicative 15 The demand for workers with excellent problem-solving skills is increasing, as are the wages for those workers ANS: T DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Increasing value of skills MSC: Applicative 16 One reason why better-looking workers may have higher earnings is that physical attractiveness may enhance a worker’s productivity for certain jobs, especially for those workers who deal with the public ANS: T DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Beauty premium MSC: Interpretive 17 One reason why better-looking workers may have higher earnings is that physical attractiveness is correlated with intelligence ANS: F DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Beauty premium MSC: Interpretive 18 The signaling theory of education maintains that workers who complete specific levels of education signal their high productivity to potential to employers ANS: T DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Signaling MSC: Definitional 19 The signaling theory of education maintains that workers who complete specific levels of education enhance their productivity through education ANS: F DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Signaling MSC: Definitional Chapter 19/Earnings and Discrimination ❖ 20 If the signaling theory of education is correct, then education is correlated with higher earnings because people with higher levels of education are more productive ANS: F DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Signaling MSC: Interpretive 21 The human-capital theory of education maintains that workers who complete specific levels of education enhance their productivity through education ANS: T DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Human capital | Signaling MSC: Definitional 22 Education and on-the-job training are sources of human capital ANS: T DIF: REF: 19-1 NAT: Analytic LOC: Labor markets MSC: Applicative TOP: Human capital 23 The superstar phenomenon explains why professional athletes earn more than amateur athletes ANS: F DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Superstar phenomenon MSC: Definitional 24 Superstars earn high incomes due to their ability to satisfy the demands of millions of people at once ANS: T DIF: REF: 19-2 NAT: Analytic LOC: Labor markets TOP: Superstars MSC: Interpretive 25 An effective minimum wage law will increase the quantity of labor demanded ANS: F DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Above-equilibrium wages MSC: Applicative 26 Labor unions will raise the quantity of labor demanded ANS: F DIF: REF: 19-1 NAT: Analytic LOC: Labor markets MSC: Applicative TOP: 27 Efficiency wages will raise the quantity of labor supplied to the market ANS: T DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: MSC: Applicative 28 Efficiency wages decrease employee effort ANS: F DIF: REF: NAT: Analytic LOC: Labor markets MSC: Interpretive 19-2 29 Efficiency wages decrease employee turnover ANS: T DIF: REF: NAT: Analytic LOC: Labor markets MSC: Interpretive 19-2 Unions Efficiency wages TOP: Above-equilibrium wages TOP: Above-equilibrium wages 30 Economic theory of labor markets suggests that wages are governed by labor supply and labor demand ANS: T DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Wages MSC: Applicative 10 ❖ Chapter 19/Earnings and Discrimination 31 Empirical evidence suggests that ability, effort, and chance are not likely to be significant contributors to wage differences ANS: F DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Wages MSC: Interpretive 32 Discrimination is a reflection of some people's prejudice against certain groups in society ANS: T DIF: REF: 19-2 NAT: Analytic LOC: Labor markets TOP: Discrimination MSC: Definitional 33 Differences in human capital among groups of workers is possibly a reflection of past discrimination ANS: T DIF: REF: 19-2 NAT: Analytic LOC: Labor markets TOP: Discrimination MSC: Interpretive 34 Discrimination is an emotionally charged issue that is impossible to study objectively ANS: F DIF: REF: 19-2 NAT: Analytic LOC: Labor markets TOP: Discrimination MSC: Interpretive 35 When differences in human capital among workers lead to discrimination, the differences are typically a result of social or political processes rather than economic processes ANS: T DIF: REF: 19-2 NAT: Analytic LOC: Labor markets TOP: Discrimination MSC: Interpretive 36 When comparing average wages for black and white workers in the United States, wages paid to black workers have been about 20 percent less than those paid to white workers ANS: T DIF: REF: 19-2 NAT: Analytic LOC: Labor markets TOP: Labor-market discrimination MSC: Applicative 37 When comparing average wages for male and female workers in the United States, wages paid to females have been about 40 percent less than those paid to male workers ANS: F DIF: REF: 19-2 NAT: Analytic LOC: Labor markets TOP: Labor-market discrimination MSC: Applicative 38 Politicians often point to average wage differentials as evidence of labor-market discrimination against ethnic minorities and women; however, economists argue against this approach because they don't trust any of the statistics quoted by the politicians ANS: F DIF: REF: 19-2 NAT: Analytic LOC: Labor markets TOP: Labor-market discrimination MSC: Interpretive 39 Politicians often point to wage differentials as evidence of labor-market discrimination against ethnic minorities and women; however, economists argue against this approach because people differ in the kinds of work they are willing and able to ANS: T DIF: REF: 19-2 NAT: Analytic LOC: Labor markets TOP: Labor-market discrimination MSC: Interpretive 40 Economists would argue that the gender wage gap is narrowing because of efficiency wages ANS: F DIF: REF: 19-2 | 19-1 NAT: Analytic LOC: Labor markets TOP: Labor-market discrimination | Efficiency wages MSC: Interpretive Chapter 19/Earnings and Discrimination ❖ 11 41 All differences in wages that are not accounted for by differences in human-capital investment are likely to be a result of discrimination ANS: F DIF: REF: 19-2 NAT: Analytic LOC: Labor markets TOP: Labor-market discrimination MSC: Interpretive 42 In a labor market free from discrimination, wages for workers that are employed by the same company will still differ ANS: T DIF: REF: 19-2 | 19-1 NAT: Analytic LOC: Labor markets TOP: Labor-market discrimination | Human capital MSC: Interpretive 43 Evidence of discrimination is most apparent when one compares wages among broad groups ANS: F DIF: REF: 19-2 NAT: Analytic LOC: Labor markets TOP: Labor-market discrimination MSC: Interpretive 44 When discrimination occurs as a result of prejudice, firms not maximize profits ANS: T DIF: REF: 19-2 NAT: Analytic LOC: Labor markets TOP: Labor-market discrimination MSC: Interpretive 45 Consumers are often a primary source of discrimination in labor markets ANS: T DIF: REF: 19-2 NAT: Analytic LOC: Labor markets TOP: Labor-market discrimination MSC: Interpretive 46 Discrimination is usually not a profit-maximizing strategy ANS: T DIF: REF: 19-2 NAT: Analytic LOC: Labor markets MSC: Interpretive TOP: Discrimination 47 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 ANS: T DIF: REF: 19-2 NAT: Analytic LOC: Labor markets TOP: Labor-market discrimination MSC: Interpretive 48 If people with blue eyes earn more than people with brown eyes, we have proof of discrimination against people with brown eyes ANS: F DIF: REF: 19-2 NAT: Analytic LOC: Labor markets TOP: Discrimination MSC: Interpretive 49 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 ANS: T DIF: REF: 19-2 NAT: Analytic LOC: Labor markets TOP: Labor-market discrimination MSC: Interpretive 50 Streetcar owners in the early 20th century were against segregation for profit maximizing reasons ANS: T DIF: REF: 19-2 NAT: Analytic LOC: Labor markets TOP: Discrimination MSC: Interpretive 51 Experimental evidence indicates women choose less competitive environments than men ANS: T DIF: REF: 19-2 NAT: Analytic LOC: Labor markets TOP: Gender differences MSC: Interpretive 12 ❖ Chapter 19/Earnings and Discrimination SHORT ANSWER After graduating from college, you receive job offers from five different accounting firms All job offers have a different compensation package Is it irrational for you to accept an offer that doesn't provide the highest level of monetary compensation? Use the concept of compensating differentials to explain your answer ANS: Compensating differentials refer to differences in job characteristics across different occupations But compensating differentials can also lead to differences in job characteristics within an occupation Such considerations may include geographic location and quality-of-life issues associated with a particular job offer Thus, it is not irrational to consider nonmonetary compensation DIF: REF: LOC: Labor markets MSC: Analytical 19-1 NAT: TOP: Reflective Compensating differentials The National Collegiate Athletic Association (NCAA) has long argued that nationally-prominent college athletes are compensated with an investment in human capital that far exceeds the monetary reward of playing professional sports Examine this argument in light of your knowledge of human capital theory and the economic theory of labor markets ANS: Many economists would argue that the NCAA is the most exploitative organization in the United States, considering the value that star student athletes contribute to a university Most would argue that the education that star student athletes receive is of less value than what the athletes contribute DIF: REF: LOC: Labor markets MSC: Analytical 19-1 NAT: TOP: Reflective Human capital A recent study of the determinants of wages for clerical staff at a state university found that years of schooling, years of experience, age and job characteristics only explained about one-half of the difference in wages Describe other factors that may be important in explaining wages differences for clerical staff ANS: Other factors may include gender, job tenure, and job responsibilities, ability and effort DIF: REF: LOC: Labor markets 19-1 NAT: TOP: Analytic Wages MSC: Analytical Explain the theory that education acts as a signaling device How does this contrast with the theory of education as an investment in human capital? ANS: The theory of signaling suggests that those who have desirable "productivity" characteristics are more likely to finish educational programs The human capital theory suggests that productivity characteristics are enhanced by the learning that takes place in formal educational programs DIF: REF: LOC: Labor markets MSC: Definitional 19-1 NAT: TOP: Reflective Human capital | Signaling List the productivity factors that may explain the differences in pay between men and women in similar occupations Do any of these factors arise as a result of cultural or social traditions? If so, describe how changes in social relationships will affect the pay gap over time ANS: Job experience, education, lifetime patterns of work experience, etc The gap should narrow as the cultural and social barriers to female access to productivity-enhancing experiences are reduced DIF: REF: LOC: Labor markets MSC: Analytical 19-2 NAT: TOP: Reflective Labor-market discrimination Chapter 19/Earnings and Discrimination ❖ 13 Explain the role of job experience in explaining the differences between the average wages of men and women ANS: Women, who have primary responsibility for housework and child-rearing duties, typically have less continuity in the labor force As such, there is a difference in the average years of job experience between men and women DIF: REF: LOC: Labor markets MSC: Analytical 19-2 NAT: TOP: Analytic Labor-market discrimination Explain how compensating differentials could contribute to differences between the average wages of men and women ANS: Men and women may, on average, select different career paths If men tend to be more concentrated in jobs that have less desirable working conditions, then compensating differentials can explain some of the difference in wages between men and women DIF: LOC: TOP: MSC: REF: 19-2 | 19-1 NAT: Analytic Labor markets Labor-market discrimination | Compensating differentials Applicative Evaluate the following statement: "The gender pay gap provides evidence of widespread, severe, ongoing discrimination by employers and fellow workers." ANS: There are many explanations of the gender pay gap Some are associated with discrimination both by consumers and employers Others are not associated with discrimination Examples of factors that would explain why men earn more than women, on average, but that are not associated with discrimination include years of labor-market experience, types of jobs, levels of human capital, and on-the-job training DIF: REF: LOC: Labor markets MSC: Analytical 19-2 NAT: TOP: Reflective Labor-market discrimination In a recent U.S presidential campaign, a lobbyist for a prominent national women's organization made the claim that women in the United States earn $0.60 for every $1.00 earned by a man A reporter, who was prepared for this statement, asked the lobbyist why wages paid to the organization's secretarial staff (all of whom were women) were significantly below the national average if they were truly interested in raising the rates of compensation for women If you were the lobbyist, how would you have answered this question? Do you think your answer is convincing? Explain ANS: The lobbyist would likely respond by citing factors that explain wage differences on the basis of compensating differentials, education, and job experience These arguments would be convincing to those who subscribe to the marginal productivity theory of compensation DIF: REF: LOC: Labor markets MSC: Analytical 19-2 NAT: TOP: Reflective Labor-market discrimination 10 Explain the role that consumers play in perpetuating discrimination in labor markets ANS: Consumers are able to exercise their biases when they purchase goods and services For example, if consumers prefer to have female personal trainers than male personal trainers, then firms may respond to these preferences by paying a higher wage to attract female personal trainers The higher wage paid to women based solely on their gender (or the lower wage paid to male trainers based solely on their gender) would be an example of discrimination driven by consumer preferences DIF: REF: LOC: Labor markets MSC: Applicative 19-2 NAT: TOP: Analytic Labor-market discrimination 14 ❖ Chapter 19/Earnings and Discrimination 11 Explain why the following situation is likely to persist: soccer players in Europe are the highest paid athletes and in the US they are among the lowest paid athletes ANS: Consumers use personal preferences when they make purchases In this case, US consumers prefer other sports such as baseball, basketball, or football over soccer Although over time we would expect a movement together in compensations for athletes in different sports, the discriminatory preferences of consumers allow the gap to persist over time DIF: REF: LOC: Labor markets MSC: Applicative 19-2 NAT: TOP: Analytic Labor-market discrimination Sec 01 Some Determinants of Equilibrium Wages MULTIPLE CHOICE Effective minimum-wage laws will most likely a increase demand for labor b create a surplus of labor c increase incomes for all unskilled workers d decrease incomes for all unskilled workers ANS: B NAT: Analytic MSC: Applicative TOP: Above-equilibrium wages DIF: REF: LOC: Labor markets 19-1 TOP: Above-equilibrium wages If we were to observe above-equilibrium wages in a particular labor market, then a possible explanation might be that a the theory of efficiency wages holds true for that market b there is a powerful labor union representing workers in that market c workers are largely unskilled and/or inexperienced and minimum-wage laws are effectively holding wages up in that market d All of the above are correct ANS: D NAT: Analytic MSC: Applicative 19-1 Above-equilibrium wages caused by efficiency wages will most likely result in a a shortage of labor b increased unemployment c compensating wage differentials d an decrease in the quantity of labor supplied ANS: B NAT: Analytic MSC: Applicative DIF: REF: LOC: Labor markets DIF: REF: LOC: Labor markets 19-1 TOP: Above-equilibrium wages Which of the following statements is not correct? a Some firms pay wages that are above the equilibrium wage b Workers sometimes form labor unions to push their wages up c Wages never deviate from the balance of supply and demand in the market for labor d The federal government mandates that employers pay their workers at least as much as the minimum wage ANS: C DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Wages | Above-equilibrium wages MSC: Interpretive Which of the following is not a consequence of above-equilibrium wages in a labor market? a a surplus of labor b unemployment c more unionized jobs d All of the above are consequences of above-equilibrium wages Chapter 19/Earnings and Discrimination ❖ 15 ANS: C NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 19-1 TOP: Above-equilibrium wages Which of the following is the most likely outcome of minimum wage laws? 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 firms ANS: B NAT: Analytic MSC: Applicative DIF: REF: LOC: Labor markets 19-1 TOP: Above-equilibrium wages Figure 19-1 Refer to Figure 19-1 Some policymakers have argued that the government should establish a "living wage." A living wage would provide workers a reasonable standard of living in their city or region If a living wage of $10 per hour is established in the market pictured here, we would expect a employment will increase to 14 million b employment will decrease to million c the wage will actually rise to $20 per hour d there will be a surplus of 14 million workers ANS: B NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 19-1 TOP: Above-equilibrium wages Refer to Figure 19-1 Suppose the local labor market was in equilibrium to begin with but then the largest local employer decided to change its compensation scheme to $10 as shown Which of the following compensation schemes could the graph be illustrating? a An efficiency wage b Discrimination c A compensating differential d The superstar phenomenon 16 ❖ Chapter 19/Earnings and Discrimination ANS: A NAT: Reflective MSC: Analytical DIF: REF: LOC: Labor markets 19-1 TOP: Above-equilibrium wages Refer to Figure 19-1 What is the loss associated with wages moving from $8 to $10? a million jobs b million jobs c million jobs d 14 million jobs ANS: A NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 19-1 TOP: Above-equilibrium wages Figure 19-2 10 Refer to Figure 19-2 This figure depicts labor demand and supply in a nonunionized labor market The original equilibrium is at point A If a labor union subsequently establishes a union shop and negotiates an hourly wage of $20, then there will be an excess a supply of 3,000 workers b demand of 7,000 workers c supply of 4,000 workers d supply of 7,000 workers ANS: D DIF: REF: 19-1 NAT: Analytic LOC: Labor markets TOP: Above-equilibrium wages | Unions MSC: Analytical 11 Refer to Figure 19-2 This figure depicts labor demand and supply in a nonunionized labor market The original equilibrium is at point A If a labor union subsequently establishes a union shop and negotiates an hourly wage of $20, then the employment level a increases from 6,000 to 10,000 b increases from 3,000 to 10,000 c decreases from 10,000 to 3,000 d decreases from 6,000 to 3,000 Chapter 19/Earnings and Discrimination ❖ 51 ANS: C NAT: Reflective MSC: Interpretive 17 DIF: REF: LOC: Labor markets TOP: 19-1 | 19-2 MSC: 19-1 | 19-2 MSC: Applicative Joan is a white 23-year-old female, and Marcia is a black 23-year-old female Both Joan and Marica are economics majors, and they graduated from the same college in the same year with the same GPA Joan and Marcia both got jobs at a brokerage firm after graduating from college They both work equally hard Joan earns $38,000 a year, and Marcia earns $30,000 a year Select the best explanation for this wage difference a Joan has less human capital than Marcia b Joan receives a compensating wage differential that Marcia does not c Joan has been discriminated against because she is white d Marcia has been discriminated against because he is black ANS: D DIF: REF: NAT: Analytic LOC: Labor markets TOP: Labor-market discrimination | Human capital 21 MSC: Analytical 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 with the same major 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 a Jane has less human capital than John b Jane has more human capital than John c John has been discriminated against because he is male d Jane has been discriminated against because she is female ANS: D DIF: REF: NAT: Analytic LOC: Labor markets TOP: Labor-market discrimination | Human capital 20 Analytical Which of the following statements is correct? a Compensating wage differentials reflect different skills of workers b Discrimination by employers affects the marginal productivity of workers c The signaling theory of education suggests that schooling does not affect worker productivity d The superstar phenomenon explains why more talented entertainers earn more than less talented entertainers ANS: C DIF: REF: 19-1 | 19-2 NAT: Analytic LOC: Labor markets TOP: Signaling | Labor-market discrimination | Human capital 19 Gender Differences Which of the following factors does not affect the value of a worker's marginal product? a Discrimination against a particular group of workers by a firm's customers b A worker's level of disposable income c A worker's level of human capital d Compensating wage differentials ANS: B DIF: REF: NAT: Analytic LOC: Labor markets TOP: Human capital | Labor-market discrimination 18 19-2 19-1 | 19-2 MSC: Applicative John is an Asian 23-year-old male, and Ken is an Asian 43-year-old male Both John and Ken are economics majors, and they graduated from the same college with the same GPA — John in 2006 and Ken in 1986 John and Ken both are both financial advisers at the same brokerage firm John earns $52,000 a year, and Ken earns $88,000 a year Select the best explanation for this wage difference a John has more human capital than Ken b John has less human capital than Ken c John has been discriminated against because he is young d Ken has been discriminated against because he is old ANS: B DIF: REF: NAT: Analytic LOC: Labor markets TOP: Human capital | Labor-market discrimination 19-1 | 19-2 MSC: Applicative 52 ❖ Chapter 19/Earnings and Discrimination 22 Karen is a black 21-year-old female, and Jessica is a black 41-year-old female Both Karen and Jessica are accounting majors, and they graduated from the same college with the same GPA — Karen in 2008 and Jessica in 1988 Karen and Jessica are both financial advisers at the same mutual fund firm Karen earns $45,000 a year, and Jessica earns $90,000 a year Select the best explanation for this wage difference a Karen has more human capital than Jessica b Karen has less human capital than Jessica c Karen has been discriminated against because she is young d Jessica has been discriminated against because she is old ANS: B DIF: REF: NAT: Analytic LOC: Labor markets TOP: Human capital | Labor-market discrimination 23 19-2 TOP: Labor-market discrimination DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination Why would a wage differential due to discrimination be unlikely to persist in a competitive labor market? a There is a cost advantage for firms that not discriminate b Workers who are victims of discrimination will eventually drop out of the labor market c Competing firms will hire fewer of the workers who are temporarily victimized by discrimination d Discrimination cannot exist in makets ANS: A NAT: Analytic MSC: Analytical 27 DIF: REF: LOC: Labor markets Economists are skeptical that discrimination is employer driven because a discrimination cannot exist in markets b employers are not really interested in maximizing profit c employers typically base wages paid on the prevailing market wage d holding productivity constant, a profit-maximizing employer will hire the cheapest labor available ANS: D NAT: Analytic MSC: Analytical 26 Applicative Politicians often point to wage differentials as evidence of labor market discrimination against ethnic minorities and women Economists, however, argue against this approach because 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 ANS: D NAT: Analytic MSC: Interpretive 25 MSC: If men, on average, earn 20 percent more than women in a particular occupation, a this is clear evidence of discrimination b some of this differential could be due to differences in educational levels c some of this differential could be due to differences in human capital d Both b and c are correct ANS: D NAT: Analytic MSC: Interpretive 24 19-1 | 19-2 DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination Which of the following represents an example of labor-market discrimination? a An employer is more likely to grant an interview to a person graduating from Yale than from the local community college b An employer is more likely to grant an interview to a person graduating from the local community college than from Yale c An employer is more likely to grant an interview to a woman with a traditionally “white” name such as Emily than to a woman with a traditionally “black” name such as Lakisha d An employer is as likely to grant an interview to person with a traditionally “masculine” name such as “Alex” as a person with a traditionally “feminine” name such as “Emily.” Chapter 19/Earnings and Discrimination ❖ 53 ANS: C NAT: Reflective MSC: Analytical 28 DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination By definition, there is discrimination when the marketplace offers different opportunities to similar individuals who differ only by a race, ethnic group, sex, age, or other personal characteristics b qualifications, experience, or job preferences c the levels of human capital d All of the above are correct ANS: A NAT: Analytic MSC: Definitional 32 Labor-market discrimination Discrimination occurs when the marketplace offers different opportunities to similar individuals who differ only by a race b level of education c attitudes toward risk d attitude toward the tradeoff between labor and leisure ANS: A NAT: Analytic MSC: Definitional 31 TOP: Labor-market discrimination is evident when a wages of individuals differ on the basis of some recognizable attribute that is unrelated to productivity b wage rates differ for similar jobs c consumers prefer to shop at some stores, and not at others d wages reflect workers’ human capital ANS: A NAT: Analytic MSC: Definitional 30 19-2 A study of segregated streetcars in the southern United States in the early twentieth century found which of the following? 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 ANS: C NAT: Analytic MSC: Interpretive 29 DIF: REF: LOC: Labor markets DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination Offering different opportunities to similar individuals who differ only by race, ethnic group, sex, age, or other personal characteristics is called a a compensating differential b an efficiency wage c discrimination d compensating variation ANS: C NAT: Analytic MSC: Definitional DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination 54 ❖ Chapter 19/Earnings and Discrimination 33 Which of the following is an example of discrimination in the labor market? a Women earn less than men because women are more likely to be employed in occupations that pay less, such as elementary school teachers rather than electrical engineers b Women earn less than men because women have, on average, fewer years of experience in the labor force because women, on average, periodically leave the labor force to raise children c A pharmaceutical sales company pays women less than men because the company's customers, physicians and pharmacists, say that they prefer to deal with men rather than women d All of the above are examples of discrimination ANS: C NAT: Analytic MSC: Analytical 34 DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination Evidence of differences in average wages of black workers compared to white workers 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 ANS: A NAT: Analytic MSC: Applicative 38 Labor-market discrimination Evidence of differences in average wages of women compared to men a clearly illustrates differences in productivity between genders b provides conclusive evidence of discrimination on the basis of gender c is seldom used to provide evidence of discriminatory bias d does not provide conclusive evidence of discrimination ANS: D NAT: Analytic MSC: Applicative 37 TOP: Suppose that an employer hires workers with brown hair and workers with blond hair Each type of worker has the same productivity Which of the following is correct if the employer discriminates by offering blonde workers lower wages than brunette workers? a The employer will be just as efficient as a nondiscriminating employer b The employer will face higher costs than firms that focus only on maximizing profits c The employer will immediately go out of business because discrimination is illegal d The employer will face union strikes ANS: B NAT: Analytic MSC: Interpretive 36 19-2 Which of the following statements is correct? a Differences in human capital may explain differences in wages between blacks and whites b Racial discrimination is the strongest explanation for differences in wages between blacks and whites c Gender discrimination is the strongest explanation for differences in wages between blacks and whites d None of the above statements is correct ANS: A NAT: Analytic MSC: Applicative 35 DIF: REF: LOC: Labor markets DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination Evidence of discrimination in labor markets a applies only to race and gender b is conclusively identified in large differences in average wages rates between men and women c is difficult to verify by reference to differences in average wage rates d is more easily identified on the basis of race than gender Chapter 19/Earnings and Discrimination ❖ 55 ANS: C NAT: Analytic MSC: Applicative 39 DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination Firms that operate in competitive product markets and choose to practice discrimination in hiring workers a will survive if they increase production and garner a larger market share b will eventually earn zero economic profits c will survive as long as they are willing to have a smaller market share d are likely to eventually go out of business ANS: D NAT: Analytic MSC: Applicative 43 Labor-market discrimination A natural correction to employer discrimination in market economies is the a threat of judicial review b profit motive c political process d union movement ANS: B NAT: Analytic MSC: Interpretive 42 TOP: Economists generally agree that a human capital theory provides the best explanation of discriminatory practices b differences in average wages not by themselves provide conclusive evidence about the magnitude of discrimination effects in labor markets c discrimination is exclusively an economic, rather than political, phenomenon d most of the wage differentials observed in the U.S economy are due to discrimination ANS: B NAT: Analytic MSC: Interpretive 41 19-2 Differences in human capital are likely to 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 ANS: C NAT: Analytic MSC: Applicative 40 DIF: REF: LOC: Labor markets DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination Evidence suggests that business owners are generally a interested in profits only when discrimination is illegal b more interested in discrimination than in making a profit c unable to determine the link between discrimination and profitability d more interested in making a profit than in discriminating against a particular group ANS: D NAT: Analytic MSC: Applicative DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination 56 ❖ Chapter 19/Earnings and Discrimination Scenario 19-3 In the small town of Hamilton, Montana, 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 cowboys Eddy's Hardware denies the complaint and says the store is only trying to maximize profit 44 Refer to Scenario 19-3 Which of the following statements would weaken the discrimination complaint against Eddy's Hardware? a Cowboys are more productive than farm boys b Cowboys work longer hours than farm boys and their effort is greater c Cowboys are generally less educated than farm boys in the field of hardware d All of the above would weaken the discrimination complaint ANS: C NAT: Reflective MSC: Analytical 45 TOP: Labor-market discrimination DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination The fact that wage differentials continue to exist across different groups of workers leads economists to believe that a discrimination by customers is the most common type of economic discrimination b differences in human capital and job characteristics must be important in explaining the differences in wages c firms apparently are not profit maximizers d the market has failed to properly allocate wages to different workers ANS: B NAT: Analytic MSC: Interpretive 47 19-2 Refer to Scenario 19-3 Which of the following statements would strengthen the discrimination complaint against Eddy's Hardware? a Farm boys call in sick to work more often than cowboys b Cowboys are less educated than farm boys, on average c Farm boys' experience with hardware generally exceeds cowboys' experience with hardware d Many cowboys take six months per year off from work to compete in a rodeo circuit and therefore have less on-the-job experience with a hardware store ANS: A NAT: Reflective MSC: Analytical 46 DIF: REF: LOC: Labor markets DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination Business owners who care only about making money are a likely to discriminate against certain groups of workers b likely to be replaced by discriminating businesses c more concerned about racial discrimination than gender discrimination d at an advantage when competing against those who practice discrimination ANS: D NAT: Analytic MSC: Interpretive DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination 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 48 Refer to Scenario 19-4 If consumers not discriminate between bald barbers and barbers with hair, then a all barbershops now earn a normal economic profit b the difference in wages is able to be maintained since a haircut is not a homogeneous good 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 Chapter 19/Earnings and Discrimination ❖ 57 ANS: D NAT: Analytic MSC: Analytical 49 DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination Empirical work that does not account for differences in the productivities of workers a is unlikely to find evidence of wage differentials b can provide strong evidence of labor market discrimination c is likely to misinterpret apparent evidence of labor market discrimination d is accepted as superior to empirical work that does correct for differences in productivity of workers ANS: C NAT: Analytic MSC: Interpretive 53 Labor-market discrimination Refer to Scenario 19-4 If some consumers in the market for haircuts have a strong preference for having their hair cut by a barber who is not going bald, then a the difference in wages will eventually disappear since a haircut is a homogeneous good b barbershops that hire barbers with hair will be able to charge a higher price for a haircut to those consumers who have a strong preference for barbers with hair c barbershops that hire barbers with hair will always be much more profitable d barbershops that hire bald barbers will always be much more profitable ANS: B NAT: Reflective MSC: Analytical 52 TOP: Refer to Scenario 19-4 Competition in the market for haircuts is consistent with which of the following statements? a Firms hiring nonbald barbers will have a cost advantage, leading to an increase in the demand for nonbald barbers b All firms that hire only bald barbers will go out of business c Firms hiring bald barbers will enter the market, increasing the demand for bald barbers d Firms hiring nonbald barbers will enter the market, increasing the demand for nonbald barbers ANS: C NAT: Reflective MSC: Analytical 51 19-2 Refer to Scenario 19-4 If consumers not discriminate between bald barbers and barbers with hair, then a competitive pressure in the market for haircuts will eventually cause the equilibrium wage in both markets to be identical b the equilibrium wage in the "bald" market will eventually fall c the equilibrium wage in the "hairy" market will eventually rise d wages in the market for barbers can never be in equilibrium ANS: A NAT: Analytic MSC: Analytical 50 DIF: REF: LOC: Labor markets DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination Attributing the gender wage gap to ongoing discrimination by employers will likely be incorrect because a some of the wage gap is explained by efficiency wages b differences in years of work experience likely lead to productivity differences between men and women c compensating differentials usually lead to higher wages for women d All of the above are correct ANS: B NAT: Analytic MSC: Applicative DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination 58 ❖ Chapter 19/Earnings and Discrimination 54 One of the problems with calculating the true amount of discrimination that takes place in the market for labor is 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 ANS: C NAT: Analytic MSC: Applicative DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination Scenario 19-5 Billy works for the local piano moving company part-time after school Billy has worked for the company for two years but still hasn't received a wage increase, even though newer employees have received raises Billy has threatened his employer with a lawsuit if he doesn't get a raise in the next few weeks Billy believes he is a victim of labor-market discrimination 55 Refer to Scenario 19-5 Which of the following statements would weaken Billy's case against his employer? 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 ANS: D NAT: Reflective MSC: Analytical 56 TOP: Labor-market discrimination DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination Refer to Scenario 19-5 In a competitive market for piano movers, why might Billy's wage differential persist? a Billy workers harder than the other employees b Billy joins a labor union c Billy's amiable personality allows him to work well with his co-workers d Customers not like Billy because he has a bad attitude ANS: D NAT: Analytic MSC: Analytical 58 19-2 Refer to Scenario 19-5 Why might an economist be skeptical of Billy's discrimination complaint? a Through antitrust laws, discriminating firms can be penalized with large fees b In a competitive market, employers pay employees based on their value to the firm c Discrimination leads to profit maximization d Only cost minimizers practice discrimination ANS: B NAT: Analytic MSC: Analytical 57 DIF: REF: LOC: Labor markets DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination Which of these instances would constitute labor-market discrimination? Pat receives a higher wage than James Pat and James are identical in all of their labor-market characteristics except that a Pat is a college graduate, and James has only a high school diploma b Pat is a black , and James is white c Pat has 15 years of experience at her job, whereas James has only five years of experience d Pat is more willing to accept dangerous working conditions than James ANS: B NAT: Analytic MSC: Interpretive DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination Chapter 19/Earnings and Discrimination ❖ 59 59 According to evidence provided by the U.S government, the median black 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 22 percent less than the median white man d All of the above are correct ANS: C NAT: Analytic MSC: Applicative 60 DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination In what way competitive markets have a "natural remedy" for discriminatory hiring practices? a Governments regulate to resolve problems of discrimination b Profit-maximizing firms that not discriminate tend to replace firms that discriminate c Wages paid to groups that are victimized by discrimination are eventually bid up to aboveequilibrium levels d Discrimination is usually the outcome of rational decision-making processes, and competitive markets produce rational outcomes ANS: B NAT: Analytic MSC: Analytical 64 Labor-market discrimination A consensus view among economists regarding the possibility of labor-market discrimination is that a most wage differences among groups are attributable to discrimination b many employers use compensating differentials to hide discriminatory practices c wage differences among groups are not sufficient by themselves to determine how much discrimination there is d all wage differences among groups are attributable to differences in human capital and compensating differentials ANS: C NAT: Analytic MSC: Analytical 63 TOP: Which of the following can be used to help explain wage differences among different groups of workers? a human capital acquired through education b human capital acquired through job experience c compensating differentials d All of the above can explain wage differences ANS: D NAT: Analytic MSC: Interpretive 62 19-2 Given that the median male is better paid than the median female, which of the following is a valid explanation for wage differences? a compensating differentials b differences in human capital c discrimination d All of the above can be a partial explanation ANS: D NAT: Analytic MSC: Interpretive 61 DIF: REF: LOC: Labor markets DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination If there is systematic discrimination against a group of workers, then the wage paid to those workers likely will be a lower due to a higher supply of workers in that group b lower due to a lower demand for workers in that group c higher due to a lower supply of workers in that group d higher due to a higher demand for workers in that group ANS: B NAT: Analytic MSC: Analytical DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination 60 ❖ Chapter 19/Earnings and Discrimination 65 If employers are profit-maximizers, then a competition will always eventually eliminate employment discrimination b employment discrimination may persist if consumers discriminate c employment discrimination will persist because it is always profitable d compensating differentials cannot exist ANS: B NAT: Analytic MSC: Interpretive 66 Labor-market discrimination DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination 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? 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 ANS: B NAT: Analytic MSC: Analytical 69 TOP: People who grew up in the western part of Aquilonia have an accent distinct from people who grew up in the eastern part of the country People from the west also receive lower wages than people from the east From this information alone, we can conclude that it is possible that a discrimination against people from the west exists b people from the east receive compensating differentials c people from the west have lower levels of human capital d All of the above could be correct ANS: D NAT: Analytic MSC: Analytical 68 19-2 In the country of Freedonia, men and women have the same level of education and choose different forms of work in the same proportions The only real difference is that men typically stay home to raise young children, returning to the work force after their children enter elementary school If no discrimination exists, then we would expect that, on average, a women would earn less than men b women would earn more than men c men and women would earn the same wage d wage differences between men and women would be due to differences in beauty ANS: B NAT: Analytic MSC: Analytical 67 DIF: REF: LOC: Labor markets DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination A study conducted by economists Marianne Bertrand and Sendhil Mullainathan found evidence of labormarket discrimination based on which of the following findings? a Restaurant customers preferred to be waited on by white waitresses than by black waitresses b Black basketball players earned more than white basketball players c Employers were more likely to request interviews with job applicants with “white” names such as Greg than from applicants with “black” names such as Jamal d Employers were more likely to request interviews with job applicants with “masculine” names such as Mark than from applicants with “feminine” names such as Lisa ANS: C NAT: Analytic MSC: Applicative DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination Chapter 19/Earnings and Discrimination ❖ 61 70 Suppose that consumers suddenly prefer to business with left-handed workers instead of right-handed workers We would expect that the marginal revenue product of a left-handed workers would rise, which would increase the demand for left-handed workers This will increase the number of left-handed workers employed, which will in turn increase the marginal product of left-handed workers b left-handed workers would rise, which would increase the demand for left-handed workers This will increase the number of left-handed workers employed, which will in turn reduce the marginal product of left-handed workers c right-handed workers would rise, which would increase the demand for right-handed workers This will increase the number of right-handed workers employed, which will in turn increase the marginal product of right-handed workers d right-handed workers would fall, which would reduce the demand for right-handed workers This will reduce the number of right-handed workers employed, which will in turn reduce the marginal product of right-handed workers ANS: B DIF: REF: 19-2 NAT: Reflective LOC: Labor markets TOP: Labor-market discrimination | Marginal product of labor 71 In the early twentieth century, streetcars in many southern cities were segregated by race This racial segregation was the result of a laws that required such segregation b long-standing southern traditions about which the law was silent c streetcar firms trying to maximize profits d streetcar firms trying to minimize costs ANS: A NAT: Analytic MSC: Applicative 72 19-2 TOP: Labor-market discrimination DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination In the early 20th century, streetcar seating which was segregated by race a was a result of economic discrimination by railroad company managers b was less profitable than streetcar seating that didn't have restrictions c was strongly supported by private streetcar companies d led to higher revenue and lower costs for streetcar companies ANS: B NAT: Analytic MSC: Applicative 74 DIF: REF: LOC: Labor markets The case study of segregated street cars in southern cities illustrates which of the following? a Racial discrimination in the seating areas was an important catalyst in the Civil Rights movement b Segregation laws were supported by local business owners as well as patrons c Firms usually care more about maximizing profits than discriminating against certain customers d Racial discrimination was a precursor to gender discrimination ANS: C NAT: Analytic MSC: Interpretive 73 MSC: Analytical DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination In the early twentieth century, racial segregation of streetcars in the southern cities was largely opposed by a streetcar firms b government officials c Sherman antitrust laws d consumers ANS: A NAT: Analytic MSC: Applicative DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination 62 ❖ Chapter 19/Earnings and Discrimination 75 The example of segregated streetcars in the southern United States in the early twentieth century is one example of a racial discrimination by firms, despite government efforts to halt it b racial discrimination by firms with no government action either to halt it or to support it c government-mandated racial discrimination d a failure to find any discrimination where most would expect to find it ANS: C NAT: Analytic MSC: Interpretive 76 DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination Discrimination may persist even in competitive markets when the source of the discrimination is a employer prejudice b customer prejudice c wage prejudice d employee prejudice ANS: B NAT: Analytic MSC: Applicative 80 Labor-market discrimination A competitive market may be consistent with a discriminatory wage differential if a firms' customers have discriminatory preferences b the wage differential is explained by a compensating differential c the wage differential is explained by differences in human capital d All of the above are correct ANS: A NAT: Analytic MSC: Analytical 79 TOP: If firms are competitive, then labor-market discrimination a cannot exist in either the short run or the long run b will be more of a problem than if the market were monopolistic or imperfectly competitive c likely will not be a long-run problem unless customers exhibit discriminatory preferences or government maintains discriminatory policies d likely will be more of a problem in the long run than in the short run due to the zero-profit condition that characterizes long-run equilibrium for competitive firms ANS: C NAT: Reflective MSC: Analytical 78 19-2 Some discriminatory hiring practices can be expected, even if markets are competitive, as a result of a unrestricted entry and exit in markets b lower costs of hiring c a perfectly elastic market demand d customer preferences ANS: D NAT: Analytic MSC: Interpretive 77 DIF: REF: LOC: Labor markets DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination Which of the following statements is not correct? a If a firm discriminates by paying short workers less than tall workers, the firm may be able to compete in the market if the firm's customers also prefer taller workers to shorter workers b If the government passes regulations that prevent shorter workers from working in higher paying jobs, taller workers may continue to earn higher wages than shorter workers c Government regulation that prohibits discrimination is economically necessary because market forces support discrimination d Competitive markets will eliminate discrimination in wages over time unless customer preferences also reflect discrimination and/or government intervention promotes discrimination Chapter 19/Earnings and Discrimination ❖ 63 ANS: C NAT: Reflective MSC: Applicative 81 DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination Studies of professional sports teams suggest that, in sports, racial discrimination is 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 ANS: C NAT: Analytic MSC: Interpretive 85 Labor-market discrimination A 1990 study of the market for collectable baseball cards suggested a there was no evidence of price discrimination on the basis of player position (hitter versus pitcher) b markets in which the product price is low are not typically characterized by consumer-driven race discrimination c cards for white players (both hitters and pitchers) were 10 to 13 percent higher than those for comparable black players d cards for black players (both hitters and pitchers) were 10 to 13 percent higher than those for comparable white players ANS: C NAT: Analytic MSC: Interpretive 84 TOP: Evidence from a 1988 study of the market for professional basketball players a found no evidence of consumer-driven wage discrimination b found some evidence of consumer-driven wage discrimination c found that measurement of marginal productivity was very difficult for basketball players d indicated that sports with strong player associations are unlikely to experience wage discrimination ANS: B NAT: Analytic MSC: Interpretive 83 19-2 Evidence from a study of the market for baseball players using 1960s data a indicated that sports with strong player associations are unlikely to experience wage discrimination b suggested that government regulation had eliminated most evidence of wage discrimination c found some evidence of consumer-driven wage discrimination d found that measurement of marginal productivity was very difficult for baseball players ANS: C NAT: Analytic MSC: Interpretive 82 DIF: REF: LOC: Labor markets DIF: REF: LOC: Labor markets 19-2 TOP: Labor-market discrimination Regarding wage differences among various groups of workers — blacks and whites, men and women, etc — most economists believe that a no such differences are evident from the available data b most of the differences are attributable to discrimination c some of the wage differences are attributable to discrimination, but there is disagreement about how much d none of the differences are attributable to discrimination ANS: C DIF: REF: 19-2 NAT: Analytic LOC: The study of economics, and definitions of economics TOP: Labor-market discrimination | Wages MSC: Interpretive 64 ❖ Chapter 19/Earnings and Discrimination 86 It is likely that, if we could measure the quality as well as the quantity of education, a the human-capital argument would become less compelling as a means of explaining wage differentials between white workers and black workers b the human-capital argument would become less compelling as a means of explaining wage differentials between male workers and female workers c wage differentials between white workers and black workers would be more puzzling than they are now d wage differentials between white workers and black workers would be more fully explained ANS: D DIF: REF: 19-2 NAT: Analytic LOC: The study of economics, and definitions of economics TOP: Labor-market discrimination | Wages MSC: Interpretive 87 Men and women tend to choose different types of occupations, and so a a source of wage differences between men and women is differences in human capital b a source of wage differences between men and women is compensating differentials c the gap between the earnings of men and the earnings of women is likely even more significant than the data alone indicate d we should expect the earnings of women to rise relative to the earnings of men, in order to induce women to accept jobs that they have been reluctant to accept in the past ANS: B DIF: REF: 19-2 NAT: Analytic LOC: The study of economics, and definitions of economics TOP: Labor-market discrimination | Wages MSC: Interpretive 88 Assume men, on balance, have lower amounts of human capital than women have Then we would expect a the demand for female labor to be lower than the demand for male labor b the demand for female labor to be higher than the demand for male labor c the supply of female labor to be lower than the demand for male labor d the supply of female labor to be higher than the supply of male labor ANS: B DIF: REF: 19-2 NAT: Analytic LOC: The study of economics, and definitions of economics TOP: Labor-market discrimination | Wages MSC: Interpretive 89 Some economists are skeptical of the argument that employers are responsible for discriminatory wage differences They argue that market economies provide a natural remedy to employer discrimination, and that remedy is a social responsibility b the profit motive c fear of reprisal from groups that suffer from those wage differences d fear of reprisal from government in the form of prosecution ANS: B DIF: REF: 19-2 NAT: Analytic LOC: The study of economics, and definitions of economics TOP: Labor-market discrimination | Wages MSC: Interpretive 90 Studies of discrimination in baseball suggest that black players a suffered from discriminatory wage differentials several decades ago and those wage differentials persist today b suffered from discriminatory wage differentials several decades ago but those wage differentials have been eliminated c did not suffer from discriminatory wage differentials several decades ago but in recent years wage differentials have become evident d did not suffer from discriminatory wage differentials in the past and they not suffer from wage differentials today ANS: B DIF: REF: 19-2 NAT: Analytic LOC: The study of economics, and definitions of economics TOP: Labor-market discrimination | Wages MSC: Interpretive Chapter 19/Earnings and Discrimination ❖ 65 91 Economists argue competitive markets provide a “natural remedy” to discriminatory wage practices Which of the following is widely recognized as a potential limit to the effectiveness of that natural remedy? a Some workers are members in unions b Some firms pay efficiency wages; others not c Some customers are discriminatory in their buying habits d Some employees have accumulated more human capital than other employees ANS: C DIF: REF: 19-2 NAT: Analytic LOC: The study of economics, and definitions of economics TOP: Labor-market discrimination | Wages MSC: Interpretive 92 It is argued that competitive markets provide a “natural remedy” to discriminatory wage practices Which of the following is widely recognized as a potential limit to the potency of that natural remedy? a Governments sometimes mandate discriminatory practices b Some employees have a lot of job experience; others have little job experience c In a discriminatory environment, a competitive firm that takes prices and wages as given has nothing to gain from any particular choice it makes regarding who to hire or which customers to serve d Not all firms exhibit social responsibility in sufficient measure to counter discriminatory wage practices ANS: A DIF: REF: 19-2 NAT: Analytic LOC: The study of economics, and definitions of economics TOP: Labor-market discrimination | Wages MSC: Interpretive 93 In the presence of discrimination by customers, a market forces nevertheless always work to prevent discriminatory wage differentials b discriminatory wage differentials can exist, but only if firms refrain from maximizing their profits c discriminatory wage differentials can exist, but only if government reinforces customers’ practices by passing laws that mandate discrimination d discriminatory wage differentials can exist, even in the absence of discriminatory practices by firms or by government ANS: D DIF: REF: 19-2 NAT: Analytic LOC: The study of economics, and definitions of economics TOP: Labor-market discrimination | Wages MSC: Interpretive ... 54 D DIF: REF: 19- 1 | 19- 2 Reflective LOC: Labor markets Compensating differentials | Signaling | Efficiency wages | Labor-market discrimination Analytical C DIF: REF: 19- 1 | 19- 2 Reflective... Definitional 74 19- 1 TOP: Human capital DIF: REF: LOC: Labor markets 19- 1 TOP: Human capital DIF: REF: LOC: Labor markets 19- 1 TOP: Human capital DIF: REF: LOC: Labor markets TOP: Human capital 19- 1 The... ANS: B NAT: Analytic MSC: Applicative DIF: REF: LOC: Labor markets 19- 1 TOP: Above-equilibrium wages Figure 19- 1 Refer to Figure 19- 1 Some policymakers have argued that the government should establish