Question 1

The accumulation of investments in people is called

Accepted Answer

The answer of The accumulation of investments in people is...

Question 2

Jen is a waitress, and she gets paid an additional $2.00 per hour for agreeing to work on Valentine's Day. Jamie is also a waitress, but she did not work on Valentine's Day and hence did not get the extra $2.00 per hour. This difference in pay is an example of differences in human capital.

Accepted Answer

This difference in pay is due to working conditions (holiday pay) rather than differences in skills, education, or experience, which are typically associated with human capital.

Question 3

Consumers are often a primary source of discrimination in labor markets.

Accepted Answer

Consumers can influence hiring practices and workplace diversity through their preferences and biases, leading to discrimination in labor markets.

Question 4

Workers who work the night shift at factories are paid more than similar workers who work the day shift due to a

Accepted Answer

The answer of Workers who work the night shift at...

Question 5

The difference in wages that results from nonmonetary characteristics of different jobs is called the

Accepted Answer

The answer of The difference in wages that results from...

Question 6

According to a study of the "beauty premium," how do the wages of people with average looks compare to those of people considered less attractive than average?

Accepted Answer

The answer of According to a study of the "beauty...

Question 7

The differences in the desirability of different jobs within a company could give rise to a compensating differential between workers.

Accepted Answer

Compensating differentials refer to the differences in wages that arise to offset the desirability or undesirability of different jobs. If a job is less desirable due to factors like higher risk, longer hours, or more strenuous conditions, it might offer higher pay to attract workers, creating a compensating differential.

Question 8

Lucy and Lincoln are salespeople working for the same company with equal skills, ability, and experience. Both are paid a small base salary but the majority of their compensation is in the form of a commission, which is a percentage of the sales they make. Lucy earns more each year than Lincoln. What can you conclude about Lucy and Lincoln?

Accepted Answer

The answer of Lucy and Lincoln are salespeople working for...

Question 9

The most important type of human capital is

Accepted Answer

The answer of The most important type of human capital...

Question 10

One example of labor-market discrimination is that a firm may be less likely to interview a job candidate whose resume clearly indicates he is not a good fit for the job.

Accepted Answer

Labor-market discrimination refers to the unfair treatment of job candidates based on characteristics unrelated to their job performance, such as race, gender, or age, rather than their qualifications or fit for the job.

Question 11

Consider two groups of workers of equal skill level and experience: those who collect garbage and those who stuff envelopes with campaign fliers. Which group is likely to be paid more and why?

Accepted Answer

The answer of Consider two groups of workers of equal...

Question 12

Gerald earns a higher salary than his brother Peter because Gerald went to law school and is a lawyer, whereas Peter dropped out of college to work as a mechanic. The difference in salary illustrates a compensating differential.

Accepted Answer

The difference in salary is more accurately attributed to human capital differences, not compensating differentials. Compensating differentials refer to wage differences designed to offset the desirability or undesirability of a job, not the skill or education level of the worker.

Question 13

According to economists Hamermesh and Biddle, how much more do people who are deemed more attractive than average earn?

Accepted Answer

The answer of According to economists Hamermesh and Biddle, how...

Question 14

Why do college graduates earn more in wages than workers with only a high school diploma?

Accepted Answer

The answer of Why do college graduates earn more in...

Question 15

Table 19-1
 $$\begin{array} { | l | l | l | } 
\hline& \mathbf { 1 9 7 5 } & \mathbf { 2 0 1 1 }\ 
\hline \text { Men } & \
\hline \text { High school, no college } & \$ 48,720 &\$46,038 \
\hline \text { College graduates } & \$ 69,146 & \$ 80,508 \
\hline \text { Percent extra for college grads } & + 42 \% & + 75 \% \
\hline & & \
\hline \text { Women } & & \
\hline \text { High school, no college } & \$ 28,006 & \$ 32,249 \
\hline \text { College graduates } & \$ 37,804 & \$ 58,229 \
\hline \text { Percent extra for college grads } & + 35 \% & + 81 \% \
\hline
\end{array}$$ Source: US Census Bureau and Mankiw's calculations
-Refer to Table 19-1. In 2011, on average how much more income would a man with a college degree earn than a man with a high school degree?

Accepted Answer

The answer of Table 19-1
 \[\begin{array} { | l |...

Question 16

Table 19-1
 $$\begin{array} { | l | l | l | } 
\hline& \mathbf { 1 9 7 5 } & \mathbf { 2 0 1 1 }\ 
\hline \text { Men } & \
\hline \text { High school, no college } & \$ 48,720 &\$46,038 \
\hline \text { College graduates } & \$ 69,146 & \$ 80,508 \
\hline \text { Percent extra for college grads } & + 42 \% & + 75 \% \
\hline & & \
\hline \text { Women } & & \
\hline \text { High school, no college } & \$ 28,006 & \$ 32,249 \
\hline \text { College graduates } & \$ 37,804 & \$ 58,229 \
\hline \text { Percent extra for college grads } & + 35 \% & + 81 \% \
\hline
\end{array}$$ Source: US Census Bureau and Mankiw's calculations
-Refer to Table 19-1. What conclusion can you draw about the changes in the gaps in earnings between skilled and unskilled workers between 1975 and 2011?

Accepted Answer

The answer of Table 19-1
 \[\begin{array} { | l |...

Question 17

Table 19-1
 $$\begin{array} { | l | l | l | } 
\hline& \mathbf { 1 9 7 5 } & \mathbf { 2 0 1 1 }\ 
\hline \text { Men } & \
\hline \text { High school, no college } & \$ 48,720 &\$46,038 \
\hline \text { College graduates } & \$ 69,146 & \$ 80,508 \
\hline \text { Percent extra for college grads } & + 42 \% & + 75 \% \
\hline & & \
\hline \text { Women } & & \
\hline \text { High school, no college } & \$ 28,006 & \$ 32,249 \
\hline \text { College graduates } & \$ 37,804 & \$ 58,229 \
\hline \text { Percent extra for college grads } & + 35 \% & + 81 \% \
\hline
\end{array}$$ Source: US Census Bureau and Mankiw's calculations
-Refer to Table 19-1. What are two possible hypotheses to explain the changes in relative demand for high-skilled workers and low-skilled workers in recent years?

Accepted Answer

The answer of Table 19-1
 \[\begin{array} { | l |...

Question 18

Workers in a labor union typically are paid less than workers not in a labor union.

Accepted Answer

Workers in a labor union typically receive higher wages and better benefits compared to non-union workers, as unions negotiate on behalf of their members for better pay and conditions.

Question 19

Customer discrimination is illegal in the United States.

Accepted Answer

The answer of Customer discrimination is illegal in the United...

Question 20

About what proportion of the variation of wages across workers is explained by factors that can be measured? What are the other factors that explain wage differences but are difficult to measure?

Accepted Answer

The answer of About what proportion of the variation of...

Quiz 19: Earnings and Discrimination

The accumulation of investments in people is called

Jen is a waitress, and she gets paid an additional $2.00 per hour for agreeing to work on Valentine's Day. Jamie is also a waitress, but she did not work on Valentine's Day and hence did not get the extra $2.00 per hour. This difference in pay is an example of differences in human capital.

Consumers are often a primary source of discrimination in labor markets.

Workers who work the night shift at factories are paid more than similar workers who work the day shift due to a

The difference in wages that results from nonmonetary characteristics of different jobs is called the

According to a study of the "beauty premium," how do the wages of people with average looks compare to those of people considered less attractive than average?

The differences in the desirability of different jobs within a company could give rise to a compensating differential between workers.

The most important type of human capital is

One example of labor-market discrimination is that a firm may be less likely to interview a job candidate whose resume clearly indicates he is not a good fit for the job.

Consider two groups of workers of equal skill level and experience: those who collect garbage and those who stuff envelopes with campaign fliers. Which group is likely to be paid more and why?

Gerald earns a higher salary than his brother Peter because Gerald went to law school and is a lawyer, whereas Peter dropped out of college to work as a mechanic. The difference in salary illustrates a compensating differential.

According to economists Hamermesh and Biddle, how much more do people who are deemed more attractive than average earn?

Why do college graduates earn more in wages than workers with only a high school diploma?

Workers in a labor union typically are paid less than workers not in a labor union.

Customer discrimination is illegal in the United States.

About what proportion of the variation of wages across workers is explained by factors that can be measured? What are the other factors that explain wage differences but are difficult to measure?