Question 1

Consider the following pieces of information: 
a.According to Bonnie Reyes,president and chief operating officer of Better Investing,a national organization of investment clubs,women have traditionally made up about 60 percent of the membership of investment clubs.By contrast,less than a third of team-managed mutual funds on Wall Street have even one woman on the management team.
b.Research conducted by professors E.Brooke Harrington and Max Planck concluded that mixed investment clubs,on average,outperformed the typical single-sex investment club.
c.The lack of gender diversity in Wall Street could be influenced by its reputation,according to professor Harrington,"for being inhospitable to women."
Source: Michael Hulbert,"Strategies: At some Funds,a Gender Communications Gap," The New York Times,October 7,2007,Sunday Money,page 5.
The information presented is an example of

Accepted Answer

The information presented shows a negative feedback loop, where women are underrepresented in team-managed mutual funds on Wall Street, which may lead to a reputation for being inhospitable to women and further discourage women from entering or succeeding in the industry. This loop perpetuates gender inequality in finance. The other answer choices do not accurately reflect the information presented.

Question 2

Economic discrimination takes place when an employer

Accepted Answer

Economic discrimination occurs when an employer pays workers different wages on the basis of some arbitrary characteristics of workers that are irrelevant to the job performed, such as race, gender or age. This type of discrimination is illegal and violates employees' civil rights.

Question 3

Comparable worth legislation

Accepted Answer

Comparable worth legislation mandates that employers pay the same wages to workers, regardless of their gender, for jobs that have comparable worth. It is aimed at addressing the issue of gender-based wage discrimination by ensuring that jobs of equal value, regardless of gender, are paid equally. However, it does not guarantee the elimination of the earnings gap between men and women as there may be differences in experience, education, and qualifications that could impact wages.

Question 4

Compensating differentials are

Accepted Answer

Compensating differentials are higher wages paid to workers who have to endure unpleasant aspects of a job, such as dangerous working conditions or working in a noisy environment.

Question 5

Which of the following is an example of a compensating wage differential?

Accepted Answer

Compensating wage differentials refer to differences in wages due to the undesirable aspects of a job. In this case, the dangerous nature of working in a dynamite mine leads to higher wages to compensate for the risk. Option A is an example of differences in wages due to differences in education and qualifications. Option C is an example of differences in wages due to differences in the prestige of the law school attended. Option D is an example of differences in wages due to differences in the popularity or demand for the individual.

Question 6

Some superstar athletes in the sports industry earn very high levels of income relative to other occupations,and over time the wage differential has been increasing.What could have caused this?

Accepted Answer

Technological advances such as cable television have increased the demand for sports entertainment, leading to higher income for star athletes due to increased revenue from broadcasting rights, merchandise sales, and sponsorship deals. The supply of star athletes has remained relatively constant, and while athletes' unions do have some market power, it is not significant enough to explain the significant increase in wage differentials over time.

Question 7

If workers in nuclear power plants underestimate the true risk of their jobs

Accepted Answer

If workers underestimate the true risk of their jobs, they may not demand higher wages to compensate them fully for the risk they are taking on. This means that they will be underpaid for the level of risk they are exposed to, making it more likely that they will accept these jobs even though the risks are higher than they believe them to be. Therefore, the most likely outcome is that wages will not be high enough to compensate these workers fully for the risk they have assumed.

Question 8

In a study conducted by Marianne Bertrand and Sendhil Mullianthan,identical resumes were sent in response to help wanted ads in newspapers,with half of the resumes assigned an African-American-sounding name and half assigned a white-sounding name.The study found that

Accepted Answer

The study found that employers were 50 percent more likely to interview workers with white-sounding names than those with African-American-sounding names. This indicates a possible bias in hiring practices based on race.

Question 9

One reason why the average salary of Major League Baseball players is higher than the average salary of college professors is

Accepted Answer

The marginal revenue product (MRP) of a baseball player is the additional revenue generated by the team from having that player on the roster. The MRP of top baseball players is very high due to the value they bring to the team in terms of on-field performance, marketability, and fan interest. College professors do not generate additional revenue for their institution in the same way, so their MRP is typically lower. This explains why baseball players can command higher salaries than college professors.

Question 10

Wage differences among workers of different races and gender could be due to all of the following except

Accepted Answer

Labor unions are not a potential explanation for wage differences among workers of different races and gender, as their purpose is to advocate for fair wages and working conditions for all their members regardless of their demographics. Factors such as job preferences, work experience, and education are all potential explanations for wage differences among workers of different races and gender.

Question 11

Women typically earn less than men,even in the same occupation.Which of the following is an explanation for this discrepancy?

Accepted Answer

Women on average have less work experience than men of the same age due to interruptions in their careers caused by pregnancy, child-rearing, and caregiving responsibilities. This can result in lower salaries and slower career advancement.

Question 12

If national laws protecting the health and safety of workers completely eliminate any and all risk,then

Accepted Answer

Eliminating all risk from risky occupations is unrealistic and practically impossible. However, if it were to happen, compensating wage differentials would disappear. Compensating wage differentials are the additional wages workers in risky occupations receive to compensate for the risk they face. Without this compensation, workers in risky occupations may not be better off, despite the elimination of risk. Therefore, choice B is the best answer.

Question 13

That some talented people may not enter an occupation because they have heard that people with their personal characteristics do not get hired in that occupation is known as

Accepted Answer

This scenario describes a negative feedback loop, where certain personal characteristics are stigmatized in certain occupations, which in turn discourages talented individuals with those personal characteristics from entering those occupations. This can perpetuate the discrimination and lack of diversity in certain fields. Economic discrimination and worker discrimination refer to instances of unequal treatment based on factors such as race, gender, or nationality, while a compensating difference refers to differences in pay or benefits to offset a perceived disadvantage. None of these fully capture the situation described in the question.

Question 14

Worker discrimination occurs when

Accepted Answer

The answer of Worker discrimination occurs when
...

Question 15

Which of the following is a reason why it is difficult to estimate the extent of economic discrimination in the labor market?

Accepted Answer

Differences in wages can be attributed to many factors such as productivity and preferences, making it difficult to isolate discrimination as the sole cause of wage disparities.

Question 16

The primary purpose of labor unions is to

Accepted Answer

Labor unions exist to negotiate with employers on behalf of their members regarding wages, benefits, and working conditions. They advocate for fair treatment and protection of workers' rights. While safety training may be a component of this, it is not the primary purpose of labor unions. Additionally, unions do not typically advocate for identical incomes for all members, as pay and benefits are typically negotiated based on factors such as job duties and seniority. Endorsing political candidates and donating money is a separate activity from the primary purpose of labor unions.

Question 17

Scenario 17-1
In academia, professors in some disciplines receive higher salaries than others. For example, professors teaching in business schools receive higher salaries than professors in the English department. Suppose at Unity College, assistant professors in the business school earn $80,000 while assistant professors in the English department earn $50,000. Now suppose the government passes comparable worth legislation that requires academic institutions to pay all faculty the same salaries.
-Refer to Scenario 17-1.Following the passage of comparable worth legislation,Unity College responds by placing salaries for all assistant professors at $80,000.Which of the following is the result of the legislation?

Accepted Answer

The answer of Scenario 17-1
In academia, professors in some disciplines...

Question 18

Customer discrimination occurs when

Accepted Answer

Customer discrimination occurs when customers refuse to buy products produced by a racially diverse workforce, which is not based on the quality of the product but on the race or ethnicity of the workers. This form of discrimination can negatively impact the diversity and inclusivity of a workplace.

Question 19

Scenario 17-1
In academia, professors in some disciplines receive higher salaries than others. For example, professors teaching in business schools receive higher salaries than professors in the English department. Suppose at Unity College, assistant professors in the business school earn $80,000 while assistant professors in the English department earn $50,000. Now suppose the government passes comparable worth legislation that requires academic institutions to pay all faculty the same salaries.
-Refer to Scenario 17-1.Following the passage of comparable worth legislation,Unity College responds by placing salaries at $65,000.Which of the following is the result of the legislation?

Accepted Answer

The legislation causes a decrease in the salaries of the business school professors, which will lead to a decrease in the supply of business professors. At the same time, the increase in salary for English professors will lead to an increase in their supply. Therefore, there will be a surplus of English professors and a shortage of business professors.

Question 20

Which of the following explains why talented major league baseball players command much higher salaries than neurosurgeons?

Accepted Answer

The answer of Which of the following explains why talented...

Quiz 17: The Markets for Labor and Other Factors of Production