Question 1

The earnings of all employees in a competitive economy would be equal if

Accepted Answer

If all individuals were homogeneous, all jobs were equally attractive, and workers were perfectly mobile among jobs, there would be no differences in earnings due to personal characteristics, job preferences, or mobility constraints, leading to equal earnings.

Question 2

Wages in the United States are higher than those in Mexico primarily because

Accepted Answer

Wages are generally higher in the United States because output per worker, or productivity, is higher due to better human and physical capital, technology, and infrastructure.

Question 3

Wages in the United States are higher than those in India primarily because

Accepted Answer

Wages are generally higher in the United States because American workers typically have access to more human and physical capital, which increases their productivity compared to workers in India.

Question 4

Other things constant, which of the following job characteristics would be most likely to result in a higher pay rate for the job?

Accepted Answer

Jobs that require substantial amounts of stressful out-of-town travel often pay higher rates to compensate for the inconvenience and stress associated with frequent travel.

Question 5

In a market economy, which of the following is most important if a worker is going to achieve high earnings?

Accepted Answer

In a market economy, earnings are largely determined by the value of goods and services provided. If a worker provides something that others value highly, they are more likely to achieve high earnings.

Question 6

When employment discrimination results from the personal prejudices of employers, economic theory suggests that

Accepted Answer

Discrimination based on personal prejudices can lead to higher costs for employers because they may overlook more qualified candidates, leading to less efficient operations and potentially higher wages for less qualified employees.

Question 7

Wages in the United States are higher than wages in China primarily because

Accepted Answer

Higher wages in the United States are primarily due to higher worker productivity, which is often supported by better technology, education, and capital investment.

Question 8

Joanne states: "The best way to increase the wages of workers is to increase worker productivity." Is Joanne correct? Why or why not?

Accepted Answer

The answer of Joanne states: "The best way to increase...

Question 9

The fact that some people will work hard to earn a lot of money while others will be content with much less income indicates that

Accepted Answer

Worker preferences play a significant role in earning differentials, as individuals have different motivations and satisfaction levels with varying income levels.

Question 10

Happyland is a country devoted to consumption. The inhabitants spend all of their income on pleasurable things and virtually none on capital investment, human or otherwise. Seriousland is frugal, spending very little on consumption and a great deal on human and physical capital. Ten years from now, which country would you prefer to inhabit?

Accepted Answer

The answer of Happyland is a country devoted to consumption....

Question 11

Economic theory suggests that the standard of living of American workers would rise if

Accepted Answer

Technological improvements that increase output per worker-hour lead to higher productivity, which can result in higher wages and a better standard of living for workers.

Question 12

The major determinant of an individual's income is

Accepted Answer

An individual's income is primarily determined by their productivity and the demand for the goods or services they produce. Higher productivity and greater demand typically lead to higher income.

Question 13

Automated production methods are only attractive when they

Accepted Answer

Automated production methods are attractive when they reduce per-unit costs.

Question 14

In the late 1800s, Bernard made buggy whips. Their quality was such that people came from hundreds of miles to buy the whips. As mechanized transportation developed, horse-drawn buggies largely disappeared and so did the demand for Bernard's whips. Would Bernard have been better off if these new modes of transportation had never been invented?

Accepted Answer

The answer of In the late 1800s, Bernard made buggy...

Question 15

No questions exist for this section.

Accepted Answer

The answer of No questions exist for this section....

Question 16

Given the amount of time and other costs of investing in human capital that it takes to earn a Ph.D., why are college professors paid less than other occupations that require similar or lesser amounts of human capital?

Accepted Answer

The answer of Given the amount of time and other...

Question 17

Ethyl does not like redheads and refuses to hire any at her business. Paul was the perfect job candidate on paper, but the personal interview revealed that he was a redhead. Are there any costs to Ethyl for not hiring Paul?

Accepted Answer

The answer of Ethyl does not like redheads and refuses...

Question 18

Sally and Joe recently graduated from college, both majoring in history. Joe took a prestigious job as a legal clerk. Sally took a job as a specialist in fighting forest fires. Both received additional training before entering their jobs. Who will likely earn a higher salary and why?

Accepted Answer

The answer of Sally and Joe recently graduated from college,...

Question 19

Which of the following is the primary source of rapid growth in the real earnings of workers?

Accepted Answer

Rapid growth in worker productivity is the primary source of increases in real earnings, as it allows for more output per worker, leading to higher wages.

Question 20

If all persons had identical preferences and productivity factors (ability, skill level, education, experience, etc.), the highest paying jobs would be the most

Accepted Answer

If all persons had identical preferences and productivity factors, the highest paying jobs would be the most undesirable because people would need an incentive, such as higher pay, to take on jobs that are less appealing or more difficult.

Quiz 13: Earnings, Productivity, and the Job Market