Chapter 8 Assuming Workers And Jobs Are Identical Information

Chapter 08 Test Bank KEY

1. Assuming workers and jobs are identical, if information is perfect and job search and migration are

costless, then

2. Assuming workers and jobs are identical, if information is perfect but job search and migration are

costly, then

3. Refer to the following diagram.

Consider the two labor markets shown in the diagram above. The wage rates shown represent

4. Refer to the following diagram.

Suppose that all other nonwage aspects of the jobs in these two markets are identical.We would expect

labor supply in B to increase if

5. Of the following occupational groups, 2014 average hourly earnings were greatest among

6. Of the following industries, 2014 average hourly earnings were greatest in

7. In 2013, hourly pay (measured in U.S. dollars) was highest in

8. Average hourly pay for production workers in the United States in 2013 was

9. Heterogeneous jobs are those that

Topic: Wage Differentials: Heterogeneous Jobs

10. Which of the following is not a source of persistent compensating wage differentials?

11. Suppose all workers are identical but working for Ajax is more pleasant than working for Acme. In all

other non-wage respects, the two firms offer the same job characteristics. In equilibrium,

12. If job X pays more than identical job Y, then the wage rates will

13. The wage rate paid workers at Flow, Inc. will most likely exceed that at otherwise identical Stock Co.

if

14. Refer to the diagram below, which represents a local labor market consisting of two submarkets. All

workers are assumed to be identical.

Assume that information is perfect, mobility between jobs is costless, and that all nonwage aspects of the

two are identical. The outcome shown in the diagram

15. Refer to the diagram below, which represents a local labor market consisting of two submarkets. All

workers are assumed to be identical.

Suppose that the wage in B is higher because workers perceive disutility of $2 associated with this job

relative to A. Assuming that information is perfect and mobility between jobs is costless, we can conclude

that

16. All else equal, the wage paid to steelworkers in Youngstown, Ohio, will be lower if

17. Which of the following would tend to increase labor supply to a particular job?

18. Lower-paid workers often seem to have less-desirable working conditions as well because

19. People who receive relatively high pay also tend to work in a relatively desirable work environment.

This is probably because

20. Which of the following research findings would support an efficiency wage explanation of pay

differentials?

21. Suppose a firm decides to raise pay as a way to reduce worker turnover.The resulting pay differential

22. All else equal, large firms tend to pay higher wages. This may be explained by all of the following,

except

23. The concept of noncompeting groups suggests that workers in different groups

24. Which one of the following is a true statement?

Topic: Wage Differentials: Heterogeneous Workers

25. Compared to present-oriented people, individuals who are more future-oriented tend to have _______

discount rates and consequently tend to obtain _______ education and earnings.

26. Consider a worker who faces a trade-off between wages on the vertical axis and job safety on the

horizontal axis.The less averse a worker is to risk of injury on the job, the

27. Refer to the following diagram.

The shape of the worker’s indifference curves—I1, I2, and I3—indicates that

28. Refer to the following diagram.

The firm’s isoprofit curve, P, is shown as concave to the origin, reflecting the assumption that

29. Refer to the following diagram.

The highest level of utility the worker can possibly achieve is

30. Which of the following is not predicted by the hedonic theory of wages, all else constant?

31. Refer to the following diagram.

Consider a worker who faces a trade-off between higher wages and a more relaxed work environment as

shown in the diagram. A worker whose indifference curves are relatively steep

32. Refer to the following diagram.

Which one of the following best explains the differences in the isoprofit curves of the two firms?

33. The hedonic theory of wages predicts that

34. Refer to the following diagrams.

From the indifference curves, we can infer that worker A

35. Refer to the following diagrams.

In equilibrium,

36. Refer to the following diagrams.

As a result of the matching between workers and firms, firm X will pay

37. Fringe benefit packages differ substantially from one firm to the next because

38. Imperfect and costly labor market information will likely result in

39. An example of a sociological immobility is

40. “The high psychic costs of leaving friends and family deter migration in response to wage

differentials.”This statement reflects the existence of

41. According to research by Kostiuk, “shift work“

42. The hedonic method of valuing a human life

Chapter 08 Test Bank Summary