The union wage gap for private sector unions in the United States is presently on the
order of
A. 2%.
B. 8%.
C. 15%.
D. 28%.
E. 39%.
If ability is positively related to schooling, then estimating the returns to education
directly from the wage-schooling profile will likely
A. under-estimate the return to schooling.
B. over-estimate the return to schooling.
C. under-estimate the average wage.
D. over-estimate the average wage.
E. under-estimate the average discount rate.
Which of the following is a reason why the union wage gap might under-estimate the
actual effect unions have on wages?
A. Unions typically attract the most productive workers to the application pool.
B. Non-union firms may pay higher wages in order to prevent its workers from
unionizing.
C. Non-union jobs will have excess labor available to them because firms will restrict
entry into union jobs, and competition for this excess labor competes down the
observed non-union wage.
D. Unions target high-paying firms.
E. The union wage gap can be over-estimated, but never underestimated.
What is an example of the substitution effect?
A. Workers choose to provide more hours of labor when the wage rate decreases.
B. Hiring more labor as long as the marginal product of labor is positive.
C. The firm expands output when production costs fall.
D. The firm expands output when production costs increase.
In a discrimination model, nepotism is best described as
A. a desire to maximize profit regardless of who one hires.
B. a preference to hire a certain type of worker, e.g., a worker of ones same race.
C. a preference to hire an integrated workforce.
D. a desire to advance social causes over maximizing profits.
E. hiring minority workers but then firing them quickly.
The Human Resources department at a firm has two job candidates for one position.
Both candidates went to the same college, took the same classes and have the same
academic record. They both performed well in the interview and said that they see the
job as a long-term position. One applicant is male; the other is female. Historically
within the firm, women quit their jobs at higher rates than do men. Because of this, the
firm fills the position with the male candidate. What kind of discrimination is this?
A. Employee discrimination.
B. Consumer discrimination.
C. Employer discrimination.
D. Statistical discrimination.
E. None of the above.
State University wishes to hire another labor economist. It targets two economists, Amy
and Beth, who are both currently working at a university in another state and who are
both earning $68,000 per year. Amy is a 32 year-old, single assistant professor who
lived in India and Germany as a child and who will come up for tenure in 2 years. Beth
is a 50 year-old, married full professor with tenure who has worked for a single
university for 22 years. The offer to either economist is for $75,000 per year and the
ability to apply for tenure in 3 years. Given the information above, Amy is more likely
to accept a job offer from State University than is Beth for several reasons. Which is the
least likely reason why?
A. Because Amy is younger than Beth.
B. Because Amy is not yet tenured.
C. Because Amy faces lower moving costs.
D. Because Amy is single while Beth is married.
E. Because both women stand to earn $7,000 more per year by switching jobs.
Which one of the following statements concerning employee discrimination is not true?
A. Employers have no reason to employ a segregated workforce if there is employee
discrimination.
B. Employee discrimination does not affect the profitability of firms as long as firms
can employ segregated work forces.
C. Discriminating employees act as if their wage is less than it actually is if they are
employed by a firm that has an integrated workforce.
D. Workers accept the utility-maximizing job offer even when there is employee
discrimination.
E. Employee discrimination will not produce a wage differential between equally
skilled black and white workers.
The typical labor supply curve
A. is u-shaped.
B. equals the marginal product of labor.
C. slopes up.
D. slopes down.
E. depends on the size of the firm.
In the standard theory of compensating differentials, a workers reservation price is
A. the amount of money it takes to entice the worker into accepting a risky job.
B. the amount of money it costs a worker to take a risky job.
C. the amount of money a worker loses for not taking any job.
D. the amount of money it costs a worker to take a safe job.
E. the difference between the wage paid in firms offering risky jobs and the wage paid
by firms offering safe jobs.
There is a restaurant that employs only males to serve guests, only females to tend the
bar, and a mix of male and female cooks and dishwashers. The dishwashers and cooks
never come in contact with the customers. This hiring pattern is most indicative of
A. employer discrimination.
B. employee discrimination.
C. consumer discrimination.
D. statistical discrimination.
E. racial discrimination.
Supposing that immigrant labor is complementary to native labor in the production
process, a more open immigration policy will likely result in all but which of the
following?
A. Firms will value native labor more highly.
B. The labor demand curve for native workers shifts out.
C. Lower wages paid to native workers.
D. Overall economic efficiency increases.
E. Overall native employment increases.
Why is the short-run labor demand curve less elastic relative to the long-run labor
demand curve?
A. Because firms care about changes in wages in the short-run but not in the long-run.
B. Because firms are better able to substitute capital for labor in the long run compared
to the short run.
C. Because labor is a normal good.
D. Because a perfectly competitive firm can always pay lower wages in the long run.
E. Because isocost curves get shallower when the wage increases.
The wage-schooling locus is
A. downward sloping because education is generally productive.
B. upward sloping because education is generally productive.
C. backward bending.
D. horizontal because wages are unrelated to schooling.
E. vertical because education is a public good.