Question 1

If a person who works in a coal mine gets paid more than a person with a similar background and skills who works in a safer job, then

Accepted Answer

A)   coal miners must have greater human capital than others.
B)   we have observed a compensating differential.
C)   coal miners must be more attractive than other workers.
D)   we have evidence of discrimination against workers outside the coalmine.E) B) and D)
F) All of the above B

Question 2

Which of the following is true regarding the earnings of attractive versus unattractive workers?

Accepted Answer

A)   Attractive people tend to earn less because attractive people are viewed as shallow and more self-absorbed and, therefore, as less productive.
B)   Attractive people tend to earn more because they may actually have a larger value of marginal product.
C)   Attractive people tend to earn more because attractive people usually have greater human capital.
D)   Attractive people tend to earn less because attractive people usually have less human capital.E) None of the above
F) A) and B)

Question 3

All of the following would tend to increase a worker's wage except

Accepted Answer

A)   working the night shift.
B)   working harder.
C)   more education.
D)   having a greater amount of natural ability.
E)   doing a job that is fun.F) B) and D)
G) A) and B) E

Question 4

List the productivity factors that may explain the differences in pay between men and women in similar occupations. Do any of these factors arise as a result of cultural or social traditions? If so, describe how changes in social relationships will affect the pay gap over time.

Accepted Answer

Job experience, education, lif...

Question 5

The most important factors of production are

Accepted Answer

A)   labour, land, and capital.
B)   water, earth, and knowledge.
C)   money, stocks, and bonds.
D)   management, finance, and marketing.E) B) and C)
F) None of the above

Question 6

At least some of the difference in pay between men and women can be explained by the fact that, on average, men may do more unpleasant jobs.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following explanations of wage differentials is not likely to be true?

Accepted Answer

A)   Men have more human capital than women.
B)   Employers in competitive markets are bigots.
C)   Men have more job experience than women.
D)   Minimum wage legislation maintains differences in pay between jobsE) All of the above
F) A) and C)

Question 8

If both input and output markets are competitive and firms are profit maximizing, then in equilibrium each factor of production earns

Accepted Answer

A)   an amount equal to the price of output times total output.
B)   the amount allocated by the political process.
C)   an equal share of output.
D)   the value of its marginal product.E) All of the above
F) A) and D)

Question 9

A new technology that increases the productivity of chefs has what effect on the labour market for chefs?

Accepted Answer

A)   The wage rate will rise, and quantity of chefs employed will fall.
B)   The wage rate will rise, and the quantity of chefs employed will rise.
C)   The wage rate will fall, and quantity of chefs employed will fall.
D)   The wage rate will fall, and the quantity of chefs employed will rise.E) B) and C)
F) All of the above

Question 10

Figure 1 Labour (number of workers)

Labour (number of  Output  Marginal Product  Value of MPL  workers)  per hour  of Labour (MPL)  001529312414515 \begin{array}{cccc} 	ext { Labour (number of } & 	ext {  Output } & 	ext { Marginal Product } & 	ext { Value of MPL } \ 	ext { workers)  } & 	ext {per hour  } & 	ext {  of Labour (MPL)  } \\hline0 & 0 \ 1 & 5 \ 2 & 9 \ 3 & 12 \ 4 & 14 \ 5 & 15\end{array}  Labour (number of  workers)  012345​ Output per hour 059121415​ Marginal Product  of Labour (MPL)   Value of MPL ​ 
-Refer to Figure 1. What is the marginal product of labour as the firm moves from using three workers to using four workers?

Accepted Answer

A)   0
B)   2
C)   8
D)   12
E)   14 F) B) and D)
G) A) and B)

Question 11

Walter's Wheat Farm sells its output and hires its labour in perfectly competitive markets. In the short run, Walter can vary only one input, labour. When Walter is producing in short-run equilibrium, all of the following conditions, except one, will necessarily be satisfied. Which is the exception?

Accepted Answer

A)   The value of marginal product of labour equals the wage rate.
B)   The marginal cost curve crosses the marginal revenue curve from below.
C)   Marginal revenue equals the price of the firm's output.
D)   The firm's total revenue will decrease if more labour is hired.E) A) and B)
F) All of the above

Question 12

Explain the role that consumers play in perpetuating discrimination in labour markets.

Accepted Answer

Consumers are able to exercise their biases when they purchase goods and services. For example, if consumers prefer to have female personal trainers than male personal trainers, then firms may respond to these preferences by paying a higher wage to attract female personal trainers. The higher wage paid to women based solely on their gender (or the lower wage paid to male trainers based solely on their gender) would be an example of discrimination driven by consumer preferences.

Question 13

The demand for a factor is considered to be a derived demand because it is derived from the firm's decision to supply output in another market.

Accepted Answer

A) True 
 B)False

Question 14

Competitive markets tend to

Accepted Answer

A)   increase labour market discrimination because some workers can charge more for their services than other workers in a competitive market.
B)   have no impact on labour market discrimination.
C)   reduce labour market discrimination because non-discriminating firms will employ cheaper labour, earn more profits, and drive discriminating firms out of the market.
D)   increase labour market discrimination because bigoted employers can charge any price they want in a competitive market to cover the cost of their discrimination.E) All of the above
F) C) and D)

Question 15

An individual firm's demand for a factor of production

Accepted Answer

A)   slopes downward because an increase in the production of output reduces the price at which the output can be sold in a competitive market, thereby reducing the value of the marginal product as more of the factor is used.
B)   slopes downward due to the factor's diminishing marginal product.
C)   slopes upward due to the factor's increasing marginal product.
D)   is perfectly elastic (horizontal)  if the factor market is perfectly competitive.E) None of the above
F) A) and D)

Question 16

Economists have hypothesized that the widening gap between the wages of unskilled workers and skilled workers may be due to

Accepted Answer

A)   decrease in the demand for unskilled workers because of increases in technology and increases in international trade.
B)   increase in the number of unskilled workers available due to immigration into the UK.
C)   decrease in the demand for unskilled workers because workers are more poorly educated.
D)   increase in the number of unskilled workers available because workers are more poorly educated.E) A) and D)
F) C) and D)

Question 17

An increase in the demand for a firm's output

Accepted Answer

A)   decreases the prosperity of the firm but increases the prosperity of the factors hired by the firm.
B)   decreases the prosperity of both the firm and the factors hired by the firm.
C)   increases the prosperity of both the firm and the factors hired by the firm.
D)   increases the prosperity of the firm but decreases the prosperity of the factors hired by the firm.E) B) and C)
F) None of the above

Question 18

If two jobs require the same amount of skills and experience, the job that pays the most is most likely to be the one that is

Accepted Answer

A)   unpleasant.
B)   discriminatory.
C)   safe.
D)   fun.
E)   easy.F) A) and E)
G) A) and C)

Question 19

A decrease in the supply of farm tractors will cause all but which of the following?

Accepted Answer

A)   an increase in the rental rate for tractors
B)   a decrease in the rental rate of farmland
C)   an increase in the value of the marginal product of tractors
D)   an increase in the wage of farm workersE) B) and C)
F) None of the above

Question 20

It is not considered discrimination when an employer offers different opportunities to individuals that differ only by their

Accepted Answer

A)   productivity.
B)   age.
C)   sex.
D)   race.E) C) and D)
F) A) and B)

Exam 17: The Economics of Factor Markets

If a person who works in a coal mine gets paid more than a person with a similar background and skills who works in a safer job, then

Correct Answer
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B

Which of the following is true regarding the earnings of attractive versus unattractive workers?

Correct Answer
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All of the following would tend to increase a worker's wage except

Correct Answer
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E

List the productivity factors that may explain the differences in pay between men and women in similar occupations. Do any of these factors arise as a result of cultural or social traditions? If so, describe how changes in social relationships will affect the pay gap over time.

Correct Answer
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Job experience, education, lif...
View Answer

The most important factors of production are

Correct Answer
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At least some of the difference in pay between men and women can be explained by the fact that, on average, men may do more unpleasant jobs.

Correct Answer
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Which of the following explanations of wage differentials is not likely to be true?

Correct Answer
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If both input and output markets are competitive and firms are profit maximizing, then in equilibrium each factor of production earns

Correct Answer
verified

A new technology that increases the productivity of chefs has what effect on the labour market for chefs?

Correct Answer
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Correct Answer
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Walter's Wheat Farm sells its output and hires its labour in perfectly competitive markets. In the short run, Walter can vary only one input, labour. When Walter is producing in short-run equilibrium, all of the following conditions, except one, will necessarily be satisfied. Which is the exception?

Correct Answer
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Explain the role that consumers play in perpetuating discrimination in labour markets.

The demand for a factor is considered to be a derived demand because it is derived from the firm's decision to supply output in another market.

Correct Answer
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Competitive markets tend to

Correct Answer
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An individual firm's demand for a factor of production

Correct Answer
verified

Economists have hypothesized that the widening gap between the wages of unskilled workers and skilled workers may be due to

Correct Answer
verified

An increase in the demand for a firm's output

Correct Answer
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If two jobs require the same amount of skills and experience, the job that pays the most is most likely to be the one that is

Correct Answer
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A decrease in the supply of farm tractors will cause all but which of the following?

Correct Answer
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It is not considered discrimination when an employer offers different opportunities to individuals that differ only by their

Correct Answer
verified

Exam 17: The Economics of Factor Markets

If a person who works in a coal mine gets paid more than a person with a similar background and skills who works in a safer job, then

Correct AnswerverifiedB

Which of the following is true regarding the earnings of attractive versus unattractive workers?

Correct AnswerverifiedShow Answer

All of the following would tend to increase a worker's wage except

Correct AnswerverifiedE

List the productivity factors that may explain the differences in pay between men and women in similar occupations. Do any of these factors arise as a result of cultural or social traditions? If so, describe how changes in social relationships will affect the pay gap over time.

Correct AnswerverifiedJob experience, education, lif...View AnswerShow Answer

The most important factors of production are

Correct AnswerverifiedShow Answer

At least some of the difference in pay between men and women can be explained by the fact that, on average, men may do more unpleasant jobs.

Correct AnswerverifiedShow Answer

Which of the following explanations of wage differentials is not likely to be true?

Correct AnswerverifiedShow Answer

If both input and output markets are competitive and firms are profit maximizing, then in equilibrium each factor of production earns

Correct AnswerverifiedShow Answer

A new technology that increases the productivity of chefs has what effect on the labour market for chefs?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Explain the role that consumers play in perpetuating discrimination in labour markets.

The demand for a factor is considered to be a derived demand because it is derived from the firm's decision to supply output in another market.

Correct AnswerverifiedShow Answer

Competitive markets tend to

Correct AnswerverifiedShow Answer

An individual firm's demand for a factor of production

Correct AnswerverifiedShow Answer

Economists have hypothesized that the widening gap between the wages of unskilled workers and skilled workers may be due to

Correct AnswerverifiedShow Answer

An increase in the demand for a firm's output

Correct AnswerverifiedShow Answer

If two jobs require the same amount of skills and experience, the job that pays the most is most likely to be the one that is

Correct AnswerverifiedShow Answer

A decrease in the supply of farm tractors will cause all but which of the following?

Correct AnswerverifiedShow Answer

It is not considered discrimination when an employer offers different opportunities to individuals that differ only by their

Correct AnswerverifiedShow Answer

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B

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E

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Job experience, education, lif...
View Answer

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