A large employer gives each new hire an aptitude test, which is scored from 1 to 20. Let
T be a workers score on the test. The firm then pays the new worker a wage of w = 0.6T
+ 0.4G where G is the average test score for the workers gender-16 for women; 12 for
men. How much more is a woman paid than a man when both scored a 10 on the test?
A. $0.20
B. $0.40
C. $0.80
D. $1.60
E. $3.20
What does it mean to conduct a sequential search?
A. To search for jobs even when employed.
B. To accept a job offer from an employer, but then to still search for a better job offer.
C. To accept the first job that one is offered.
D. To apply to all job openings.
E. To determine an asking wage and then accept the first job offer that pays a wage
equal to or greater than the asking wage.
The cross-elasticity of labor with respect to capital is
A. the change in labor relative to a change in capital.
B. the change in wages relative to a change in the price of capital.
C. the percent change in labor relative to a percent change in capital.
D. the percent change in wages relative to a percent change in the price of capital.
E. the percent change in labor relative to a percent change in the price of capital.
The Labor-Management Relations Act of 1947 (also known as the Taft-Hartley Act)
was significant because it
A. curtailed union power by permitting states to pass right-to-work laws.
B. granted firms the right to break unions.
C. outlawed yellow-dog contracts.
D. created the National Labor Relations Board.
E. granted union rank and file the right to decertify its leadership via election.
When plotting log wages (y-axis) against years of schooling (x-axis), the slope of the
regression line indicates
A. the average wage.
B. the average logged wage.
C. the average years of schooling.
D. the economic return to each additional year of schooling measured in dollars.
E. the economic return to each additional year of schooling measured in percentage
terms.
Assuming labor demand is downward sloping and that the labor market is competitive,
what happens to national income as a result in immigration?
A. National income increases by more than the total earnings of immigrants.
B. National income increases by less than the total earnings of immigrants.
C. National income decreases by more than the total earnings of immigrants.
D. National income decreases by less than the total earnings of immigrants.
E. Immigrants have no effect on national income because they are not citizens.
In the United States, the poorest 10 percent of households earn approximately what
share of total income?
A. 2%
B. 5%
C. 10%
D. 20%
E. 50%
The female-male wage gap in the United States is associated with women earning
between 25 and 30 percent less than men. By all accounts, most of this difference is
attributable to differences in
A. education levels.
B. returns to skill.
C. height.
D. labor market experience.
E. productivity.
Which of the following statements regarding immigration is true?
A. For each employed immigrant there is an unemployed native worker.
B. Immigration always results in lower native wages.
C. All immigrants are low-skilled.
D. Firms do not receive a substantial immigrant surplus.
E. Consumers benefit from immigration via lower prices.
Union jobs are highly sought out:
A. When economic conditions worsen.
B. When workers face job insecurity during periods of high unemployment.
C. When there is a decline in real wages.
D. When working conditions are poor.
E. All of the above are true.
Which one of the following statements best describes profit sharing?
A. Profit sharing is an equal division of all revenues among workers.
B. Profit sharing ties pay to the performance of individuals.
C. Profit sharing is a program that donates profits to the poor.
D. Profit sharing provides a system by which workers receive a share of the firms
profits.
E. Profit sharing discourages free-riding among workers.
Which of the following statements about migration is not true?
A. Migration is greater among younger workers compared to older workers, because
older workers have a shorter period in which to benefit from the returns to migration.
B. Migration is greater among highly educated workers compared to less educated
workers, because the returns to education for highly-educated workers vary much more
from location to location than for workers with low levels of education.
C. Migration is greater among married couples compared to single-person households,
because migration costs are less for married couples.
D. A tied-stayer is someone who would move if he or she were single.
E. Migration is greater among people who like the adventure of moving compared to
people who do not like the adventure of moving, because the psychic costs of moving
are less for those who enjoy moving.
Present value calculations allow one to determine
A. the return to an uncertain asset.
B. the present-day costs and/or benefits of various options.
C. the utility value of a particular option.
D. the social cost of financial calculations.
E. the real wage.
If a firm operates in a competitive labor market and in a non-competitive output market,
then the firm faces
A. a constant wage rate when hiring more labor and a constant price when selling more
of its output.
B. an increasing wage rate when hiring more labor but a constant price when selling
more of its output.
C. a constant wage rate when hiring more labor but a decreasing price when selling
more of its output.
D. an increasing wage rate when hiring more labor but a decreasing price when selling
more of its output good.
E. a decreasing wage rate when hiring more labor but a decreasing price when selling
more of its output good.
Which statement about human capital is false?
A. Human capital gives firms a way to differentiate between workers.
B. Workers accumulate human capital during formal education and through life
experiences.
C. There is more human capital in the U.S. now than there was 100 years ago.
D. Human capital has a low rate of return.
E. Human capital tends to be an important determinant of ones wages.
In the case of a vertical contract curve, union negotiations will result in the firm hiring
A. more workers and at a higher wage than it would in the absence of the union.
B. the same number of workers but at a higher wage than it would in the absence of the
union.
C. fewer workers but at a lower wage than it would in the absence of the union.
D. fewer workers but at a higher wage than it would in the absence of the union.
E. the same number of workers but at a lower wage than it would in the absence of the
union.
Why is frictional unemployment considered to be productive?
A. Search activities of workers and firms resulting in frictional unemployment improve
the allocation of resources.
B. Firms do not hire a worker until they find the most educated worker.
C. There are more potential workers seeking jobs than there are jobs for workers when
there is frictional unemployment.
D. The demand for highly-skilled workers exceeds the supply of highly-skilled workers
when there is frictional unemployment.
E. Frictional unemployment leads to a decrease in the unemployment rate.
Which is not true regarding a delayed-compensation contract?
A. A delayed-compensation contract discourages workers from shirking.
B. A delayed-compensation contract decreases employee turnover within the firm.
C. An effective delayed-compensation contract requires a mandatory retirement age.
D. A delayed-compensation contract makes workers inherently more productive.
E. A delayed-compensation contract is associated with an upward-sloping age-earnings
profile.