Econ #4 Exam

If the wages of less-educated workers were reduced by supply shifts, then we would expect to see a) No change in the employment level of these workers b) An increase in the employment level of these workers c) A decrease in the employment level of these workers d) Either an increase or a decrease in the employment level of these workers

b) An increase in the employment level of these workers

If technical change in the form of an increase in the use of capital increase the demand for skilled labor, then capital and skilled labor must be a) Perfect complements b) Gross complements c) Substitutes in production d) Gross substitutes

b) Gross complements

If the fraction of the people in the middle of the income distribution decreases by 20 percent with half of these moving to the lower end and the other half to the upper end, then income inequality will a) Decrease b) Increase c) Be unaffected d) Uncertain

b) Increase

Holding all else constant, which of the following changes would tend to decrease the supply of union activity? a) An increase in the number of regulated industries b) Increased employer resistance to unions c) A decrease in the ratio of union to non-union wages d) A decrease in the wage elasticity of demand for union labor

b) Increased employer resistance to unions

If supply shifts were the primary cause behind the increasing wage gap between highly-educated and less-educated workers, then a) The employment of less educated workers would decrease relative to the employment of college-educated workers b) The employment of less-educated workers would increase relative to the employment of college-educated workers c) The relative employment of the two groups would not change d) Both supply curves must shift in the same direction

b) The employment of less-educated workers would increase relative to the employment of college-educated workers

The "price" of being in a union includes a) membership dues b) all costs, including money and time. c) the time spent on union activities d) the amount by which wages increase due to union membership.

b) all costs, including money and time

There are more constraints on union power in the long-run because a) product markets become more competitive in the long run with the entry of new firms b) all of the above c) the firm can substitute other inputs for union labor d) in the long run the supply of substitute inputs may be more elastic

b) all of the above

Which of the following CANNOT explain differences in earnings of men and women? a) unobservable characteristics b) income maximization by all workers c) occupation d) experience

b) income maximization by all workers

The Equal Pay Act of 1963 a) outlawed racial discrimination in hiring of workers b) outlawed separate pay scales for men and women who perform the same jobs c) outlawed sexual discrimination in hiring of workers d) outlawed sexual discrimination in firing of workers

b) outlawed separate pay scales for men and women who perform the same jobs

If all incomes were to double (due to inflation, for example) then the coefficient of variation of income will a) increase b) remain unchanged c) either increase or decrease d) decrease

b) remain unchanged

Customer discrimination will cause a) no wage differentials b) segregated workplaces c) discriminating customers to pay lower prices d) firms to give up profits to maximize utility

b) segregated workplaces

workers formed unions in order to protect their interests and

bargain collectively

Which of the following best describes the statement "Earnings at the 80th percentile were $20,000" a) The average earnings of those in the bottom 80% was $20,000 b) 80% were earning $20,000 or more c) 80% were earning $20,000 or less d) The average earnings of those in the top 80% was $20,000

c) 80% were earning $20,000 or less

A decrease in the price of capital will cause the demand for unskilled labor to shift to the left if capital and unskilled labor are a) Complements in production b) Gross complements or gross substitutes c) Gross substitutes d) Gross complements

c) Gross substitutes

Which of the following best describes the economic nature of a union? a) a monopsonist b) a producer of public goods c) a monopoly d) an agency assuring workers get a wage reflecting their supply price of labor

c) a monopoly

Unions have traditionally been thought to lower worker productivity by a) increasing quit rates b) enabling workers to speak with a collective voice in the workplace c) bargaining for limits on the substitution of capital for labor d) bargaining for rules that promote the use of internal labor markets

c) bargaining for limits on the substitution of capital for labor

Comparable worth is a) depends on supply and demand factors b) implies that all professions are underpaid c) ignores market conditions. d) sets salaries in the most efficient manner possible

c) ignores market conditions

Threat effects are a) increases in union wages from threats to strike b) decreases in non-union wages from the threat of replacement by unemployed union members. c) increases in non-union wages from threats to unionize d) decreases in union wages from management threats to use replacement workers during a strike

c) increases in non-union wages from threats to unionize

If a number of new workers enter the labor force and all of them find jobs at the mean level of wages, then this will cause the variance of wages to a) Either increase or decrease b) Remain unchanged c) Increase d) Decrease

d) Decrease

If all incomes were to fall by ten percent (due to deflation, for example) then the variance of income will a) Remain unchanged b) Increase c) Either increase or decrease d) Decrease

d) Decrease

Much of the recent growth in income inequality was caused by a) Decreasing returns to experience b) Increases in real earnings of high school graduates c) Increases in the number of part-time workers d) Increasing returns to education

d) Increasing returns to education

Technological change a) Will always decrease the demand for less-educated workers b) Will always decrease the demand for well-educated workers c) Is the equivalent of an increase in international trade d) Is the equivalent of a decrease in the price of capital

d) Is the equivalent of a decrease in the price of capital

The Lorenz Curve will __________ whenever the distribution of family income becomes less equal a) Move closer to the diagonal line b) Cross the previous Lorenz Curve c) Become straighter d) Move farther from the diagonal line

d) Move farther from the diagonal line

The coefficient of variation of incomes of full-time workers is highest among a) High school graduates b) Younger Workers c) Middle-aged workers d) Older workers

d) Older workers

Occupational discrimination a) occurs when secretaries are paid less than truck drivers. b) is the desire of those in one group to work in different jobs than those in another group. c) is when the distribution of jobs within one group is different from the distribution of jobs within another group. d) is keeping one group in lower-paying jobs although their potential productivity is equal to that of those who have access to higher-paying jobs.

d) is keeping one group in lower-paying jobs although their potential productivity is equal to that of those who have access to higher-paying jobs

Statistical discrimination is a) using statistics to judge the average characteristics of a group of workers b) firing people due to low average productivity c) using statistics in hiring d) judging one person according to a group to which he or she belongs

d) judging one person according to a group to which he or she belongs

Union membership in the United States is currently ________ other industrialized countries. a) similar to that in b) higher than in c) around the median of d) lower than in

d) lower than in

If males and females are paid the same price for each of their productive characteristics then it follows that a) occupational segregation will be zero b) discrimination will be eliminated c) they will earn the same wages d) males and females are not compensated differently for each added year of experience.

d) males and females are not compensated differently for each added year of experience

If attitudes change and unions are perceived as dangerous to American companies' ability to compete in the world market, then a) the demand curve for union services will shift to the right b) we will move to the left along the demand curve for union services. c) we will move to the right along the demand curve for union services. d) the demand curve for union services will shift to the left.

d) the demand curve for union services will shift to the left

Which of these probably has played the LEAST important role in the drop in unionization rates in the United States over the past 20 years? a) resistance to unionization by employers d) the increase in the share of employment in Southern states c) increased competitive pressures within product markets d) the increase in the share of employment by female workers

d) the increase in the share of employment by female workers

Many unions have favored import quotas and tariffs because a) they are trying to increase the welfare of all Americans b) they want their employers to substitute labor for capital and other inputs c) all of the above d) they want to shift demand towards the goods they produce

d) they want to shift demand towards the goods they produce

If one sector of the economy becomes unionized and there is a spillover effect then a) wages will stay unchanged in both sectors b) wages will increase in both sectors c) wages will increase in the unionized sector, but may either increase or decrease in the non-union sector d) wages will increase in the unionized sector, but decrease in the non-unionized sector

d) wages will increase in the unionized sector, but decrease in the non-unionized sector

White collar workers, such as managers and sales workers, tend to have _________ unionization rates

low

Industrialization separated the functions of

management and labor

Workers prior to the industrial revolution were

self-employed

Unions have tried to avoid strikes and used __________________ instead

work slowdowns

What is the economic nature of a union?

A monopoly

Employer discrimination implies that a) there will be no market wage differential. b) some employers give up profits to avoid hiring one group. c) co-workers and customers prefer one group of workers over another. d) if the group discriminated against is small, there will be a wage differential in the market.

b) some employers give up profits to avoid hiring one group

If one sector of the economy becomes unionized and there is a spillover effect then a) wages will increase in both sectors b) wages will increase in the unionized sector, but decrease in the non-unionized sector c) wages will stay unchanged in both sectors d) wages will increase in the unionized sector, but may either increase or decrease in the non-union sector

b) wages will increase in the unionized sector, but decrease in the non-unionized sector

What are the causes of inequality?

Changes in Supply, Changes in Demand from technology, Changes in demand from earnings instability, Changes in institutional factors

Outlaws both wage discrimination and employment discrimination (race, gender, religion, national origin, color) Applies to private employers, labor unions, government employees

Civil Rights Act of 1964

Placing women into a narrow set of "female occupations", prompting men to receive higher wages and women rates fall

Crowding Model

What does a Lorenz Curve compare?

Cumulative percentage of households (x-axis) to the percentage of monetary income (y-axis)

Which of the following will reduce inequality? a) The poor and rich earn less, but the earnings of the poor go down proportionately more b) The poor and the rich earn proportionately more c) The rich and poor earn more, but the rich earn proportionately more d) The poor and rich earn less, but the earnings of the rich go down proportionately more

d) The poor and rich earn less, but the earnings of the rich go down proportionately more

In a given market, women with the same skills as men earn less. Which of the following would suggest that the main source of discrimination against women is employers? a) The companies hiring more women make a larger profit. b) Companies hiring women offer more daycare and other job amenities favored by women. c) Male managers who work with women must be paid more. d) Companies make the same profit whether they hire women or men.

a) The companies hiring more women make a larger profit

The increase in wage inequality has been more rapid in the United States than in other industrialized countries for all the following reasons EXCEPT a) Unskilled workers are retrained more quickly in the United States b) Wage determination is more decentralized in the United States c) Unemployment rates among unskilled workers have risen more rapidly in other countries d) The supply of skilled workers has grown less quickly in the United States

a) Unskilled workers are retrained more quickly in the United States

Over the 1970 to 2012 period, the labor force participation rate of black women was ________ the rate of white women, while the rate for black men was ________ the rate of white men. a) greater than; less than b) equal to; less than c) equal to; equal to d) greater than; equal to

a) greater than; less than

In a given market, women with the same skills as men earn less. Which of the following would suggest that the main source of the discrimination is the managers that must work with them? a) managers working with women must be paid more b) All of these answers c) Companies hiring women offer more daycare and other amenities favored by women. d) Companies with managers who hire more women make a larger profit.

a) managers working with women must be paid more

A study finds that handsome people make more than ugly people in occupations where workers interact with customers. This supports which of these models of discrimination? a) employer discrimination b) statistical discrimination c) employee discrimination d) customer discrimination

d) customer discrimination

Female earnings as a fraction of male earnings tend to ________ as age increases and tend to ________ as education increases a) increase; increase b) decrease; decrease c) increase; decrease d) decrease; increase

d) decrease; increase

What do most employers think about comparable worth policies?

too arbitrary, not good to artificially adjust wages

Are whites or African Americans more likely to be in a union?

African Americans

Do men or women tend to be more involved as a group?

Men

Top occupation for which women most often represent in movies?

Nurse

Workers became dependent on owners for

employment and income

Argues that the increased union wage advantage in the 1970s cause firms to fight unions more aggressively

Managerial-Opposition Hypothesis

a firm doesn't hire you because of your race or gender, why unemployment rates change

Employment Discrimination

Requires that men and women doing the same job be paid the same, outlaws wage discrimination

Equal Pay Act of 1963

Who is responsible for ending Child Labor?

FDR

If blacks and women have less access to productivity-increasing opportunities (formal schooling and on-the-job training)

Human Capital Discrimination

What are we not investing in?

Human Capital and Research

Flow of money going into factors of production, earned in this lifetime

Income

Wages, rental income and interest are all examples of what?

Income

What are the methods to increase Union Labor Demand?

Increase product demand, enhance productivity, influence the prices of related inputs, increase the number of employers

What are the two ways to improve human Capital?

Increasing the quality of education and importing human capital from skilled immigrants

What are the positive effects of unions?

Investment in technological processes, collective voice, lower turnover, productivity rises, increased training

Why does unionization tend to be high in transportation, communications and utilities?

Low demand elasticities (hard to replace with capital)

Occurs if one is restricted from entering, even though they are just as capable; restricted to certain jobs and careers within the firms

Occupational Discrimination

Any type of discrimination that occurs after a person has entered the labor market (actively looking but not getting a job)

Postmarket Discrimination

Human Capital discrimination occurs prior to entering the labor market (early on, affecting you later in life)

Premarket Discrimination

Women are choosing to leave the labor market to have children, are not investing into education and training, prompting their lower wages

Rational Choice

What are the methods to decrease Labor Supply?

Reduce the number of qualified suppliers of labor, raise the non wage income

What are the negative effects of unions?

Restrict work rules, strikes, labor misallocation

Top occupation for females in 2010?

Secretary

Top occupation for females in the 1950s?

Secretary

Employers base hiring decisions upon the average characteristics of the group to which the employee belongs (Age, education, experience)

Statistical Discrimination

The labor force and economy have changed in ways that are unfavorable to unions (as a country we are moving from goods to services)

Structural Change Hypothesis

Argues that the government and employers now provide services previously provided by unions (OSHA)

Substitution Hypothesis

Assuming one does not get hired because the employer is willing to pay a higher wage and forego output and profits Arises from customers, co-workers and employers

Taste Discrimination Model

What is the college premium?

The gap between High School Grads and College Grads (unskilled vs skilled)

What is the social contract we are failing at?

The implicit promise of equal opportunity, irrespective of familial background

The earnings and employment of those with more human capital have both increased dramatically since 1980. This suggests that their ________ curve had shifted ________. a) Demand; rightward b) Supply; rightward c) Demand; leftward d) Supply; leftward

a) Demand; rightward

The ________ Act established the National Labor Relations Board and required employers to bargain with unions representing the majority of their employees. a) National Labor Relations b) Taft-Hartley c) Norris-LaGuardia d) Landrum-Griffin

a) National Labor Relations

Wage discrimination is a) paying one group less than another, although they have the same productive characteristics. b) paying less productive workers lower wages. c) paying one group more than another, while paying the same price for productive characteristics in both groups. d) paying part-time workers less per hour than full-time workers.

a) paying one group less than another, although they have the same productive characteristics

Why do unions exist?

To protect their interests and to bargain collectively (increase wages and employment of members)

Requiring all new workers to join the union

Union Shop

Female or black workers are paid less than male workers for doing the same work, same ability and tenure, occurs after hiring

Wage Discrimination

What happens to wages and employment when you decrease Labor Supply of the union?

Wages rise, employment falls

What happens to wages and employment when you increase Labor Demand of the union?

Wages rise, employment rises

Current value of assets a person has, what you are born into/passed down

Wealth

Pensions, property ownership, and savings are all examples of what?

Wealth

When will successful union bargaining for higher wages cause greatest reduction in employment?

When Ld is highly elastic

What are the requirements for discrimination to exist?

When workers who have the same ability, education, training and experience as white male workers are given inferior treatment with respect to hiring, access, promotion, wage rate and working conditions

Unions have recently increased organizing efforts and targeted ________________ workers

White Collar

Holding all else constant, which of the following changes would tend to decrease the demand for union activity? a) A decrease in the average job tenure b) Increased use of tariffs and import quotas to restrict the flow of foreign imports c) Higher penalties for committing an unfair labor practice d) The repeal of some right-to-work laws because of changing attitudes towards unions

a) A decrease in the average job tenure

Which of the following could NOT increase the earnings gap between highly-educated and less-educated workers? a) A faster increase in the supply of highly-educated workers than of less educated workers b) A decrease in the average strength of the union c) A faster increase in the demand of highly educated workers than for less educated workers d) A decrease in the demand for less educated workers

a) A faster increase in the supply of highly-educated workers than of less educated workers