What is the main theoretical implication regarding the standard employer-based
discrimination model?
A. Most firms are discriminatory.
B. Workers dont care if firms are discriminatory.
C. Discrimination is not profitable.
D. Discrimination can only occur if there are exactly two types of labor (e.g., white and
black).
E. Discrimination can only occur in competitive labor markets.
Specific job training
A. allows for more inter-industry job mobility.
B. raises entry level wages for the untrained.
C. leads to lower turnover.
D. discourages workers from earning seniority.
E. leads to a greater willingness by firms to lay off workers.
The perceived cost of hiring a black worker for an employer who is prejudiced against
blacks will exceed
A. the cost of hiring whites.
B. the wage of whites.
C. the wage of blacks.
D. the white-black wage gap.
E. total profit.
Labor demand is more elastic the greater the elasticity of substitution between labor and
capital because
A. workers supply more labor when their wage increases.
B. the firms output price falls when the firm produces more output.
C. a firm is less willing to pay higher labor costs if it is easy for the firm to substitute
capital for labor.
D. firms always have the option of substituting capital for labor.
E. a firms technology is slow to change.
Which is the distinguishing feature of the standard cobweb model?
A. The firm is a perfectly discriminating monopsonist.
B. Wages and employment levels adjust slowly over time.
C. Payroll taxes create a tax wedge, which in turn increases overall employment levels.
D. Real wages steadily increase.
E. Capital is not fixed in the short run.
Assuming that workers are fully aware of their working conditions, which of the
following will not happen when the government mandates pollution control to protect
workers health?
A. Worker utility will increase.
B. Employment will decrease.
C. The air in workplaces will become cleaner.
D. Firms with low-profits before the mandate may shut down or exit the industry.
E. Wages will fall at all but the cleanest firms.
Which of the following regarding internal migration in the United States is not true?
A. Migration is more common among younger workers compared to older workers.
B. Migration is more common among educated workers compared to uneducated
workers.
C. Migration equalizes wages across regions.
D. Empirically the mystery is why there is not more internal migration, not why there is
not less.
E. Repeat and return migration are rational decisions and routinely occur.
Which of the following is not a property of isoprofit curves graphed in Probability of
Injury (x-axis) versus Wage (y-axis) space?
A. All points on each isoprofit curve yield the same level of profit.
B. Profit-maximizing firms are indifferent as to where they operate on any given curve.
C. Isoprofit curves going out along the x-axis yield higher profits.
D. Isoprofit curves going up along the y-axis yield higher profits.
E. Isoprofit lines are upward sloping.
What type of questions cannot be answered with theory or facts alone?
A. Normative questions.
B. Positive questions.
C. Factual questions.
D. Empirical questions.
E. Econometric questions.
The labor supply curve shows how many workers are willing to work
A. in a particular industry.
B. at any given time.
C. at the minimum wage.
D. at any given wage.
E. in order to maximize the firms profit.
Which of the following would not increase the asking wage?
A. The government expands UI benefits from 26 to 52 weeks.
B. The government increases the maximum weekly unemployment benefit from $500 to
$800.
C. An increase in the unemployment rate.
D. Having ones spouse receive a pay raise.
E. The government stops taxing UI benefits.
Suppose labor supply can be described as ES = 0.1w – 1,000 where w is yearly salary.
How many more workers are willing to work at a yearly salary of $40,000 than at a
yearly salary of $35,000?
A. 50
B. 100
C. 500
D. 1,000
E. 5,000
The sectoral shifts hypothesis claims that
A. cyclical unemployment will always exceed frictional unemployment.
B. frictional unemployment will cause workers to extend their temporary lay-offs.
C. most unemployed workers will return to their previous job because the firm knows
the skills of the worker.
D. there will always be a pool of unemployed workers who find jobs quickly (i.e., the
frictionally unemployed).
E. there will always be a pool of unemployed workers who experience long spells of
unemployment because their skills do not match those that employers are looking for
(i.e., the structurally unemployed).
If native workers and immigrants are substitutes, then
A. native workers will be better off with open borders.
B. native workers will encourage immigration.
C. native firms will discourage immigration.
D. immigrant workers will receive a higher wage than native workers.
E. immigration will shift the labor supply curve to the right.
The Roy model concerns
A. the skill-selection associated with immigration flows.
B. specific on-the-job training.
C. general training.
D. the age-earnings profile.
E. the cost-benefit analysis of layoffs or quits.
Which of the following statements is associated with the standard migration model?
A. Return migration signals that the mover regrets having made the initial move.
B. Repeat migration signals that the mover regrets having made the initial move.
C. Repeat migration signals that the mover is moving for job-related reasons.
D. The decision to move is expected to increase the households overall utility.
E. Moving for job reasons is done at the expense of family desires.
In a standard Roy model, migration can lead to an increase in average skills in both
locations. What is necessary for this to happen?
A. The workers who migrate from the source country are below-average in skill relative
to the average source country person but are above-average in skill relative to the
average destination country person.
B. The workers who migrate from the source country are above-average in skill relative
to the average source country person but are below-average in skill relative to the
average destination country person.
C. The highest skilled workers migrate from the source country to the destination
country.
D. The lowest skilled workers migrate from the source country to the destination
country.
E. Migration leads to an increase in average skills in both locations whenever there is
positive selection.
Which of the following is a positive (rather than a normative) question?
A. What effect does increasing welfare assistance by 20% have on female labor supply?
B. Should the U.S. allow unlimited immigration?
C. Should the “Highly Qualified Teacher”provision of No Child Left Behind be
eliminated?
D. Should there be a minimum wage?
E. Should trade unions be allowed to lobby Congress?
The empirical and theoretical results on occupational crowding in the United States
suggest that
A. occupational crowding is substantial in the United States, but this should not be
thought of as a source of discrimination.
B. occupational crowding is substantial in the United States, and much of this should be
thought of as a source of discrimination.
C. occupational crowding is substantial in the United States, but occupational crowding
is unrelated to discrimination.
D. there is minimal occupational crowding in the United States, and therefore it cannot
be a source of discrimination.
E. there is minimal occupational crowding in the United States, but this is still thought
to be an important cause of racial discrimination but not gender discrimination.