A strike
A. can be a rational response during the union-firm negotiation process.
B. is a Pareto optimal outcome.
C. hurts the firms management and share holders but not the union members.
D. is never in the best interest of the rank and file.
E. is always in the firms best interest.
Many immigrants and many American high school dropouts possess very few skills.
What impact will these low-skill immigrants likely have on the labor market
opportunities of American high school dropouts?
A. Immigration of low-skilled workers is associated with higher wages paid to
American high school dropouts.
B. Immigration of low-skilled workers is associated with lower wages paid to American
high school dropouts.
C. Immigration of low-skilled workers does not affect wages paid to American high
school dropouts.
D. Immigration of low-skilled workers is associated with greater employment among
American high school dropouts.
E. None of the above.
In an econometric model, the dependent variable is
A. the behavior one is trying to explain.
B. unchanging across sub-samples.
C. always the wage.
D. also known as the residual.
E. unrelated to the independent variables.
What best describes unemployment spells in the United States?
A. Most spells of unemployment are rather short, and therefore most weeks of
unemployment can be attributed to these short spells.
B. Most spells of unemployment are rather short, but most weeks of unemployment are
attributed to very long spells.
C. Most spells of unemployment are rather long, and therefore most weeks of
unemployment can be attributed to these long spells.
D. Most spells of unemployment are rather long, but most weeks of unemployment are
attributed to short spells.
E. Most spells of structural unemployment are much shorter than most spells associated
with frictional unemployment, but how these two interact to determine the average
length of an unemployment spell is unknown.
An implication of the exit-voice hypothesis is that
A. union workers who earn lower wages will circumvent union leadership to ask
management for pay raises.
B. labor turnover (voluntary quits) will be lower at union firms than at non-union firms
as workers can bring issues to management through their union leadership.
C. the union wage gap will be higher for more experienced union members.
D. dues paid by rank and file union members must increase prior to wage negotiations.
E. dues paid by rank and file union members should be saved during stretches of labor
peace in order to fund worker benefits during strikes.
Which one of the following conclusions is not supported by the intertemporal
substitution hypothesis?
A. The profile of hours of work over the life cycle will have roughly the same shape as
the age-earnings profile.
B. Hours of work over the life cycle will be inversely related to wages over the life
cycle.
C. Hours of work increase as the wage rises and decline as the wage falls.
D. An unemployed person might choose to become a discouraged worker during a
low-wage recession with an eye toward returning to the labor market when wages
increase.
E. A high wage worker may choose to work 60+ hours a week during her peak wage
years in order to retire at a younger age later in life.
If designed correctly, tournaments
A. discourage competition.
B. reward players according to their ranked productivity.
C. elicit equal effort from all workers.
D. always reward a single winner.
E. reduce the applicant pool to just those workers with the best degrees.
The human capital externality refers to
A. an additional tax placed on institutions of higher learning.
B. the governments subsidization of institutions of higher learning.
C. the quality of the environment in which a child is raised.
D. the cohort affect from selection bias.
E. the environmental costs associated with rapid population growth.
A profit-maximizing monopsonist
A. pays the same wage to all types of labor.
B. hires an equal number of male and female workers and pays them the same wage.
C. hires more minority workers than non-minority workers, but pays the minority
workers less than the non-minorities.
D. hires fewer workers and pays its workers less than it would if it were operating in a
competitive labor market.
E. substitutes low-skilled labor for high-skilled labor in the long run.
What would a person do if the market wage is less than his or her reservation wage?
A. The person will enter the labor market.
B. The person will work as much as possible.
C. The person will work more hours as the wage falls further.
D. The person will be unemployed.
E. The person will not participate in the labor force.
If labor supply of unskilled workers is perfectly inelastic, then
A. firms face an increasing marginal cost of hiring unskilled labor.
B. firms face a horizontal value of marginal product of employment curve.
C. the labor supply curve of unskilled workers is horizontal at the market clearing
wage.
D. the labor supply curve of unskilled workers is vertical at the total number of
unskilled workers in the market.
E. workers will supply more hours of labor to the market when wages increase.
Which of the following is typically not a possible disadvantage of a tournament?
A. Competitors have little incentive to help one another (and they may even sabotage
each others work).
B. Workers rarely understand all of the rules to a tournament.
C. A large prize can encourage workers to provide effort until the very end of the
tournament, even if the worker has a small chance of winning.
D. Workers may collude to share the prize in order to provide lower levels of effort.
E. The outcome of a tournament may appear to be random.
What does it mean for the U.S. economy to have a positively skewed wage distribution?
A. Most workers earn below the average wage.
B. A large proportion of workers earn very high wages.
C. The average wage equals the median wage.
D. The distribution of wages is symmetric around the mean.
E. The mean wage equals the median wage.
Which of the following statements regarding the increase in supply of high-skill labor
in the United States since 1960 as measured by education level is not true?
A. The percent of workers without a high school degree has fallen dramatically since
1960.
B. The percent of workers with a high school degree has fallen dramatically since 1960.
C. The percent of workers with a college degree has increased dramatically since 1960.
D. The percent of workers with an advanced degree has increased dramatically since
1960.
E. The supply of highly-skilled women to the workforce has increased dramatically
since 1960.
The likelihood of experiencing a spell of unemployment lasting at least 12 months
A. is roughly the same in the United States as it is in Europe.
B. is much lower in the United States than in Europe.
C. is much higher in Europe than in the United States with all European countries
having at least 30% of their unemployed experiencing a spell of unemployment of at
least 12 months.
D. varies substantially across European countries, with some rivaling the United States
but many others being much higher than the U.S.
E. varies substantially across European countries, with some rivaling the United States
but many others being much lower than the U.S.
Which one of the following statements regarding the intertemporal substitution
hypothesis is false?
A. Workers are willing to reduce labor supplied during a recession.
B. Increases in unemployment may be voluntary as workers collect UI benefits.
C. Increases in unemployment may be voluntary as workers trade income for leisure
during low-wage periods.
D. Wages and hours of leisure will tend to move together over the course of the
life-cycle.
E. Labor supply responds to changes in the real wage.
Which of the following does not characterize a perfectly discriminating monopsonist?
A. The firms marginal cost of hiring curve is the labor supply curve.
B. The firm hires more workers than it would if it were a competitive firm.
C. The firm chooses employment and wage levels in order to maximize profit.
D. The firm pays each worker his or her reservation wage.
E. The labor supply curve can be upward sloping.
Occupational crowding refers to
A. Employee-based discrimination.
B. Licensure requirements to enter certain occupations.
C. Women being intentionally segregated into particular occupations.
D. Firms receiving more applications for high-wage job openings than for low-wage job
openings.
E. Low turnover associated with high-wage occupations.
From 1980 to 2009, the black-white wage ratio for males in the United States
A. held constant at about 0.7.
B. fell steadily from about 1.0 in 1980 to 0.5 in 2009.
C. increased modestly from 0.7 in 1980 to about 0.8 in 2009.
D. increased substantially from under 0.5 in 1980 to almost 1.0 in 2009.
E. increased substantially from 0.4 in 1980 to over 0.8 in 2009.