Suppose all 18-year-olds are identical in every way except that some have easy access
to credit (i.e., they face a low interest rate when borrowing money) while others have a
difficult time accessing credit (i.e., they face a high interest rate when borrowing
money). Which of the following statements is not true?
A. Those who have easy access to credit have a lower rate of discount than those who
do not have easy access to credit.
B. Those who have easy access to credit will be more likely to go to college than those
who do not have easy access to credit.
C. The present value calculation of college will be higher for those who have easy
access to credit than for those who do not have easy access to credit.
D. Some people who have easy access to credit will not go to college.
E. No one without easy access to credit will go to college.
Which statement best describes international comparisons of unionization rates?
A. Private sector unionization is about the same (around 20%) in all developed
countries.
B. Private sector unionization is greater in less-developed countries than in developed
countries.
C. Private sector unionization rates have steadily fallen in all developed countries over
the last 40 years.
D. Private sector unionization rates vary greatly by country.
E. Private sector unionization rates exceed public sector unionization rates in all
developed countries.
The Phillips Curve relates
A. the unemployment rate to economic growth.
B. the unemployment rate to inflation.
C. the unemployment rate to the real wage.
D. the real wage to total employment.
E. the real wage to the natural rate of unemployment.
Which of the following statements did not reflect the U.S. labor market in the early
2000s?
A. Of working men and women, the average man tended to work more annual hours
than the average woman.
B. The labor force participation rate of men was greatest between the ages of 25 and 55.
C. A greater percentage of women than men worked part-time.
D. Labor force participation was unrelated to education.
E. The labor force participation rate over all women was about 70 percent.
Selection bias is a problem when trying to estimate the return to education in a standard
human capital model. In this context, what does selection bias refer to?
A. Having a non-random data sample.
B. Workers self-select education levels and jobs based on their abilities and preferences.
C. Colleges select who they are willing to accept.
D. The wage-schooling locus does not have a constant slope.
E. The wage-schooling locus is estimated to have a negative slope.
A piece rate compensation system
A. underemphasizes the quantity of output produced.
B. attracts and benefits the most able workers.
C. inherently hurts minorities.
D. decreases a firms productivity.
E. has no disadvantages.
Which is not a decision made by potential workers in the United States?
A. Deciding whether or not to participate in the labor force.
B. Determining how to divide ones time between work and leisure.
C. Choosing how much to produce to maximize firm profit.
D. Choosing how much education to receive.
E. Deciding which occupation to pursue.
Who is not counted in the U.S. labor force?
A. A person working 15 hours a week or more not for pay.
B. A fulltime college student.
C. A person working at least one hour for pay per week.
D. Someone actively looking for a job.
E. A 70-year-old person who supplements his social security payments by working 8
hours each week at minimum wage.
For which reason is increasing the federal minimum wage not a good anti-poverty
program?
A. It is very costly for the government.
B. Roughly two-thirds of minimum wage earners are not the primary worker in their
household.
C. Increasing the federal minimum wage will likely increase employment opportunities.
D. The minimum wage discriminates against minorities.
E. The minimum wage discriminates against the young.
Which of the following is least likely to affect the net gain to migration?
A. An improvement in economic opportunities in the destination state.
B. An improvement in economic opportunities in the source state.
C. An increase in migration costs.
D. Changing ones preferences for living in different places.
E. Government spending.
Any economic model should be judged primarily on:
A. How realistic its assumptions are.
B. How accurately its predictions match observed behavior.
C. How easy the model is to use.
D. How many aspects of real-world behavior and choices are incorporated in the model.
E. How original the model is compared to other models.
The Hicks Paradox concerns
A. the irrationality of unions.
B. the irrationality of union dues.
C. the irrationality of strikes.
D. the irrationality of substituting low-skill labor for high-skill labor.
E. the irrationality of negotiating additional fringe benefits for union workers at the cost
of receiving lower wages.