Which of the following measures would best allow one to compare the relative wealth
of poor households to the typical household in an economy?
A. The perfect-equality Lorenz curve.
B. The Gini coefficient.
C. The 90-10 wage gap.
D. The 50-10 wage gap.
E. The 90-50 wage gap.
Middle-aged workers being paid more than their younger counterparts is likely due to
A. the natural inverse relationship between age and experience.
B. the implementation of a mandatory retirement age by the firm.
C. more recent education and job training programs being more effective than older
programs.
D. firms using a delayed compensation scheme.
E. workers prefer delaying their earnings to as late in life as possible.
A firms labor demand curve is typically
A. a vertical line.
B. a horizontal line.
C. upward-sloping.
D. downward-sloping.
E. associated with a slope equal in absolute value to the slope of the labor supply curve.
Which group of workers tends to have the highest unemployment rate among high
school dropouts?
A. Men
B. Women
C. Blacks
D. Hispanics
E. Whites
Labor demand is more elastic
A. the greater is the supply elasticity of capital.
B. the greater is the elasticity of substitution between labor and capital.
C. the greater is the elasticity of demand for the firms output.
D. the greater is labors share in total costs.
E. All of the above.
Why might it be wrong to include self-proclaimed discouraged workers in calculations
of the unemployment rate?
A. Discouraged workers likely have a job but are discouraged only because they would
like a better-paying job.
B. Some discouraged workers are taking advantage of a low-wage period to consume
large amounts of leisure.
C. Discouraged workers receive federal assistance.
D. Discouraged workers are already included in official unemployment statistics as long
as no one else in their household is working.
E. By definition, discouraged workers are only temporarily laid-off, and they will return
to a job shortly.
A perfectly discriminating monopsonist
A. pays the equilibrium wage to all workers.
B. pays each worker his or her reservation wage.
C. receives zero profit in the long run.
D. disregards minimum wage laws.
E. faces an increasing value of marginal product curve.
Which of the following is the best theoretical explanation for why strikes occur?
A. The firm has a downward sloped resistance curve.
B. The union and firm know that it is impossible to eventually negotiate an outcome on
the contract curve.
C. The unions leadership wants to please management.
D. The union doesnt know how valuable labor is to the firm.
E. The firm wants to minimize labor costs.
If the U.S. system of unemployment insurance didnt exist, one would predict that
A. workers would never become unemployed.
B. workers who became unemployed would remain unemployed for longer durations.
C. no worker would accept a job that is associated with seasonal unemployment.
D. seasonal unemployment would cease to exist.
E. workers in jobs that have high risks of unemployment or in jobs that face seasonal
cycles of unemployment would be paid higher wages.
The government is a player in the U.S. labor market in part because the government
A. determines who can go to college.
B. assigns potential workers to particular industries.
C. sets workplace worker safety regulations.
D. suggests a minimum wage for firms to pay.
E. funds employer-based health insurance benefits.
In order to use schooling as a signal:
A. The signal must be more costly for low-skilled workers than for high-skilled
workers.
B. The cost of purchasing the signal must not be so costly that high-skilled workers
dont value obtaining it.
C. Firms must be able to easily verify each workers amount of schooling.
D. Some people must choose to not complete schooling.
E. All of the above are required for schooling to serve as a signal.
When the government mandates that firms supply a particular benefit, it is usually the
case that
A. the cost of providing the benefit is less than the workers value of the benefit.
B. employment will increase.
C. the wage will increase.
D. the wage will decrease by more than the cost of providing the benefit.
E. the wage will decrease by less than the cost of providing the benefit.
Owners of mens clothing stores traditionally discriminate against males when making
hiring decisions because they believe that male customers are more eager to buy
clothing from female associates. In reality, however, ones sex does not affect ones sales
(i.e., ones sex does not affect ones productivity). Discrimination of this sort throughout
the labor market has resulted in clothing stores paying male associates lower wages
than they pay female associates. A new mens clothing store enters the industry without
these prejudicial beliefs. Which of the following outcomes is not likely to come about?
A. The new store will hire more male associates than the typical existing store.
B. The new store will make greater profit than it would if it would hold similarly biased
views.
C. The new store will have lower per-employee labor costs than existing stores.
D. The new store will likely have lower prices than existing stores.
E. The new store will have to hire female associates to compete with its competition.
The wage differential between a safe and risky job is $5,000. Which of the following is
not true?
A. The marginal worker is indifferent between working the safe or risky job.
B. All but the marginal worker in safe jobs require a wage differential above $5,000 to
accept a risky job.
C. All but the marginal worker in the risky job require a wage differential below $5,000
to be indifferent between safe and risky jobs.
D. The per-worker cost for any firm to change technologies to offer safe jobs in place of
risky jobs is $5,000.
E. The average per worker cost of offering safe jobs exceeds $5,000 at the risky firms.
Regression toward the mean is captured by which of the following?
A. The tendency for inequality to be wider as a country experiences economic growth.
B. The tendency for countries to diverge in their inequality.
C. The tendency for income differences across families to get smaller over time as the
various families move toward the mean income of the population.
D. The tendency for the 90-50 wage gap to approach the 50-10 wage gap as a country
experiences economic growth.
E. The tendency for the tax code to erode inequality by targeting the mean tax rate to
mean income.
Which of the following affects a persons decision to work?
A. The price of consumption goods relative to the wage.
B. The persons income from non-labor sources.
C. How much the person enjoys working.
D. The amount of fringe benefits offered to the person.
E. All of the above affect a persons decision to work.
A potential implication of OSHA regulation is that
A. the most risk averse workers begin working the riskiest jobs.
B. the hedonic wage function may no longer exist at the safest levels.
C. the hedonic wage function may no longer exist at the riskiest levels.
D. average wages increase.
E. for the same amount of output produced, total production costs will be less.