Econ yeehaw

Between 1976 and 1996, which group did NOT experience growth in their share of the civilian labor force?

(a) Women (b) White males (c) Hispanics (d) Asians and Native Americans Answer: B

Which of the following could NOT increase the earnings gap between highly-educated and less-educated workers?

(a) a faster increase in the demand for highly-educated workers than for less-educated workers (b) a faster increase in the supply of highly-educated workers than of less-educated workers (c) a decrease in the demand for less-educated workers (d) a decrease in the average strength of unions Answer: B

An increase in inequality will always be accompanied by

(a) a reduction of earnings of those in the lowest percentiles. (b) an increase of earnings of those in the highest percentiles. (c) an increase in the dispersion of incomes. (d) all of the above. Answer: C

If the wages of less-educated workers were reduced by supply shifts, then we would expect to see

(a) an increase in the employment level of these workers. (b) a decrease in the employment level of these workers. (c) no change in the employment level of these workers. (d) either an increase or a decrease in the employment level of these workers. Answer: A

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) gross complements. (b) gross substitutes. (c) gross complements or gross substitutes. (d) complements in production. Answer: B

Female earnings as a fraction of male earnings tend to ________ as age increases and tend to ________ as education increases.

(a) increase; increase (b) increase; decrease c) decrease; increase (d) decrease; decrease Answer: C

Since 1980, the college enrollment rate of both male and female recent high school graduates has ________, while the ratio of earnings of college to high-school graduates has ________.

(a) increased; increased (b) increased; decreased (c) decreased; decreased (d) decreased; increased Answer: A

Technological change

(a) is the equivalent of a decrease in the price of capital. (b) is the equivalent of an increase in international trade. (c) will always decrease the demand for less-educated workers. (d) will always decrease the demand for well-educated workers. Answer: A

Occupational discrimination

(a) occurs when secretaries are paid less than truck drivers. (b) is when the distribution of jobs within one group is different from the distribution of jobs within another group. (c) 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 the desire of those in one group to work in different jobs than those in another group. Answer: C

If males and females are paid the same price for each of their productive characteristics then it follows that

(a) they will earn the same wages. (b) discrimination has been eliminated. (c) males and females are not compensated differently for each added year of experience. (d) Occupational segregation will be zero. Answer: C

The widget industry is perfectly competitive and produces 1000 widgets. Currently, it takes one unit of skilled labor and two units of unskilled labor to produce one widget. Technological change then increases the productivity of skilled labor only. Afterward, the total employment of skilled workers goes up. Which of the following is consistent with this result? ________ units of skilled workers and two units of unskilled labor are needed to produce one widget and total output is ________ widgets.

0.75; 1600

Which of the following best describes the statement "Earnings at the 80th percentile were $20,000"?

80% were earning $20,000 or less.

In the employer model of discrimination where employers differ in how much they devalue the productivity of women, which of the following will lower the relative wage of women?

A) The fraction of females in the workforce increases and, as a result, employers hire a larger fraction of females. B) Employers become more driven to maximize profits. C) Special training raises the productivity of women. D) More non-discriminating employers enter the market, lowering the profits made from hiring women. Answer: A

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) customer discrimination C) employee discrimination D) statistical discrimination Answer: B

If the choice of educational level reflects anticipated labor market discrimination, then

A) it should not be included in the list of premarket variables used to estimate what wages would be in the absence of racial wage discrimination. B) the wage gap between black and white workers is smaller than what is observed in the data. C) the unexplained difference in wages between black and white workers is greater than the observed difference in wages. D) it should be included in the list of premarket variables used to estimate what wages would be in the absence of racial wage discrimination. Answer: A

In the model where employers discriminate against females, those employers that devalue the productivity of the females more than other employers will

A) pay a lower wage to females. B) still hire females even when they earn the same wage as males. C) earn a lower profit. D) do all of the above. Answer: C

Customer discrimination will cause

A) segregated workplaces. B) no wage differentials. C) firms to give up profits to maximize utility. D) discriminating customers to pay lower prices. Answer: A

Employer discrimination implies that

A) some employers give up profits to avoid hiring one group. B) if the group discriminated against is small, there will be a wage differential in the market. C) there will be no market wage differential. D) co-workers and customers prefer one group of workers over another. Answer: A

The index of occupational dissimilarity for women and men

Answer: - Would be 100 if all occupations were completely segregated.

Which of the following could NOT increase the earnings gap between highly-educated and less-educated workers?

Answer: A faster increase in the supply of highly-educated workers than of less-educated workers

In the model where employers discriminate against females, those employers that devalue the productivity of the females more than other employers will

Answer: Earn a lower profit

Much of the recent growth in income inequality was caused by

Answer: Increasing returns to education.

Jeb and his brother John are in manufacturing jobs that pay the mean earnings in the United States. They then become farmers and their usual earnings, while remaining the same on average as the mean earnings in the United States, vary from year to year. In one year, Jeb earns $20,000 more than usual while John earns $20,000 less than usual. If this occurred for many workers, then

Answer: Inequality will increase.

If all incomes were to fall by ten percent (due to deflation, for example) then the variance of income will

Answer: decrease.

The earnings and employment of those with more human capital have both increased dramatically since 1980. This suggests that their ________ curve had shifted ________.

Answer: demand; rightward

Wage discrimination is

Answer: - Paying one group less than another, although they have the same productive characteristics.

If males and females are paid the same price for each of their productive characteristics then it follows that

Answer: Males and females are not compensated differently for each added year of experience.

Suppose that females and males are equally productive and that some employers discriminate against females. If some employers begin discriminating against males, which of these CANNOT happen (assuming that nothing else changes)?

The relative wages of women will fall.

Suppose that tall employees dislike working with short employees. Assume also that short and tall employees are perfect substitutes for one another in producing goods. What is the likely outcome?

Workplaces will be segregated (some employing only tall employees, others all short employees).

Suppose that earnings instability (such that income can go up or down) increases for the lower 20 percent of the workforce. The increase in inequality as measured by the 90:10 ratio will ________ the increase as measured by the 80:20 ratio.

be greater than