Question 1

Attributing the gender wage gap to ongoing discrimination by employers will likely be incorrect because

Accepted Answer

Differences in years of work experience likely lead to productivity differences between men and women. While discrimination may still be a contributing factor to the gender wage gap, it is not the sole explanation. Efficiency wages, which are wages paid above market wages to increase worker productivity and reduce turnover, could also play a role. Additionally, compensating differentials, where workers are paid extra to compensate for a less desirable job attribute, may lead to higher wages for women in some cases.

Question 2

In the country of Freedonia, men and women have the same level of education and choose different forms of work in the same proportions. The only real difference is that men typically stay home to raise young children, returning to the work force after their children enter elementary school. If no discrimination exists, then we would expect that, on average,

Accepted Answer

The answer of In the country of Freedonia, men and...

Question 3

Differences in human capital are likely to

Accepted Answer

Differences in human capital, such as education and experience, can explain some of the differences in average wage rates across age classifications. However, they cannot fully explain wage differences across gender classifications, as discrimination and other factors may also play a role. Option A is incorrect because although a high school diploma is a requirement for many jobs, there may still be differences in education and training beyond high school that can impact wages. Option B is incorrect because human capital can be helpful in explaining both age and race discrimination. Option D is incorrect because, as mentioned before, human capital cannot fully explain wage differences across gender classifications.

Question 4

Mary and Mike are twins who attended grammar school through college together. Both twins got jobs in the same department of an accounting firm. They both work equally hard and have received similar performance reviews. Mary earns $62,000 a year, and Mike earns $80,000 a year. Select the best explanation for this wage difference.

Accepted Answer

The most likely explanation for the wage difference is that Mary has been discriminated against because she is female. Both twins have the same education and job in the same department, and their performance is similar. Therefore, it is unlikely that the wage difference is due to differences in human capital or discrimination against Mike as a male.

Question 5

Al and Steve are both reporters at the same newspaper. Al is black and Steve is white. Al earns less than Steve. Which of the following can explain why Al earns less?

Accepted Answer

This is the only option provided that suggests a possible reason for the wage disparity based on qualifications and education. The other choices do not address this issue.

Question 6

Scenario 19-3
In the small town of Hamilton, Montana, there is a local hardware store called Eddy's Hardware. There are only two types of workers who apply for jobs at Eddy's Hardware: cowboys and farm boys. Local politicians have received numerous complaints that Eddy's Hardware is practicing wage discrimination against farm boys. Eddy's Hardware denies the complaint and says the store is only trying to maximize profit.
-Refer to Scenario 19-3. Which of the following statements would strengthen the discrimination complaint against Eddy's Hardware?

Accepted Answer

If cowboys call in sick to work more often than farm boys, yet farm boys are still paid less, it suggests that the wage disparity cannot be justified by reliability or attendance, strengthening the discrimination complaint.

Question 7

People who grew up in the western part of Aquilonia have an accent distinct from people who grew up in the eastern part of the country. People from the west also receive lower wages than people from the east. From this information alone, we can conclude that it is possible that

Accepted Answer

All three options are possible explanations for the observed differences. Discrimination could explain the wage differential between east and west if employers in the east have a preference for workers from their own region. Compensating differentials could explain the wage differential if working in the east has some non-monetary advantage (e.g. better working conditions or job opportunities) that compensates for the lower wage. Lower levels of human capital in the west could also explain the wage differential if workers there have less education or training than those from the east. Therefore, all three options could be correct.

Question 8

Which of these instances would constitute labor-market discrimination? Courtney and Nicole are identical in all of their labor-market characteristics except that Courtney earns a higher salary than Nicole because

Accepted Answer

Discrimination based on age is illegal and constitutes labor-market discrimination. The other options are not considered discriminatory (beauty is not a protected characteristic, different shifts may require different pay, and attending job-training seminars is a qualification for higher pay).

Question 9

Empirical work that does not account for differences in the productivity of workers

Accepted Answer

If empirical work does not account for differences in productivity of workers, it is likely to misinterpret apparent evidence of labor market discrimination. This is because wage differentials can be caused by differences in productivity, not just discrimination. Therefore, not accounting for productivity differences can lead to a false conclusion of discrimination. Choices A, B, and D are not accurate because empirical work that does not account for productivity differences may still find evidence of wage differentials, may provide weak evidence of discrimination, and is not accepted as superior to empirical work that does correct for productivity differences.

Question 10

George and Susan work at the same brewery. George works in advertising. Susan works as a forewoman in the bottling plant. George is paid more than Susan.

Accepted Answer

The statement suggests that George might be paid more due to his superior performance reviews. This does not suggest discrimination based on gender, but rather a recognition of individual job performance. The other options do not provide enough evidence to support the claim of discrimination.

Question 11

Scenario 19-3
In the small town of Hamilton, Montana, there is a local hardware store called Eddy's Hardware. There are only two types of workers who apply for jobs at Eddy's Hardware: cowboys and farm boys. Local politicians have received numerous complaints that Eddy's Hardware is practicing wage discrimination against farm boys. Eddy's Hardware denies the complaint and says the store is only trying to maximize profit.
-Refer to Scenario 19-3. Which of the following statements would weaken the discrimination complaint against Eddy's Hardware?

Accepted Answer

If farm boys are generally less educated in the field of hardware than cowboys, it could explain why they may be paid less. This suggests that Eddy's Hardware is not discriminating against farm boys, but rather paying employees based on their education and experience in the field. The other options actually strengthen the discrimination complaint by indicating that farm boys are more productive and work longer hours.

Question 12

John is an Asian 23-year-old male, and Ken is an Asian 43-year-old male. Both John and Ken are economics majors, and they graduated from the same college with the same GPA - John in 2006 and Ken in 1986. John and Ken are both financial advisers at the same brokerage firm. John earns $52,000 a year, and Ken earns $88,000 a year. Select the best explanation for this wage difference.

Accepted Answer

The wage difference between John and Ken cannot be attributed to discrimination based on age or race as they are both Asian males working in the same field. Since they have the same educational background and GPA, the wage difference is likely due to Ken having more work experience and skills built up over time, giving him more human capital than John.

Question 13

Tiffany is a black 21-year-old female, and Danielle is a black 41-year-old female. Both Tiffany and Danielle were accounting majors, and they graduated from the same college with the same GPA - Tiffany in 2013 and Danielle in 1992. Tiffany and Danielle are both auditors at the same accounting firm. Tiffany earns $63,000 a year, and Danielle earns $95,000 a year. Select the best explanation for this wage difference.

Accepted Answer

The answer of Tiffany is a black 21-year-old female, and...

Question 14

One of the problems with calculating the true amount of discrimination that takes place in the market for labor is

Accepted Answer

Measuring productivity differences between workers can be difficult, and this can make it challenging to determine if wage differentials are the result of discrimination or differences in productivity levels. Other factors, such as differences in education and experience, can also affect wages, making it challenging to isolate the impact of discrimination.

Question 15

Marcia is a white 23-year-old female, and Joan is a black 23-year-old female. Both Marcia and Joan were economics majors, and they graduated from the same college in the same year with the same GPA. Marcia and Joan both got identical jobs at a brokerage firm after graduating from college. They both work equally hard. Marcia earns $38,000 a year, and Joan earns $30,000 a year. Select the best explanation for this wage difference.

Accepted Answer

The most likely explanation for the wage difference is that Joan has been discriminated against because she is black. All other factors, such as their GPA and job responsibilities, are equal, indicating that Joan's race is the only variable that could reasonably account for the wage discrepancy.

Question 16

Allen and Ellen both work at Burger Ranch. Allen is paid more than Ellen. Which of the following could explain why Allen is paid more?

Accepted Answer

The answer of Allen and Ellen both work at Burger...

Question 17

Which of the following is an example of labor-market discrimination? You may assume that worker A and worker B have identical characteristics except for the ones listed. A firm offers a higher salary to worker A than worker B because worker A

Accepted Answer

This is an example of labor-market discrimination based on gender, where worker A (a man) is offered a higher salary than worker B (a woman) despite having identical characteristics other than gender.

Question 18

Harry is 40 and black. Dan is 40 and white. Both work as plumbers, but Harry earns more.

Accepted Answer

Harry earning more than Dan despite having the same job and age might suggest that he has more experience or qualifications as a plumber, rather than discrimination based on race. Option A is not necessarily true without any additional information or evidence of discriminatory practices. Options C and D are unlikely to be the reason for the wage difference without any further information.

Question 19

Which of these instances would constitute labor-market discrimination? Henry receives a higher wage than Ryan. Henry and Ryan are identical in all of their labor-market characteristics except that

Accepted Answer

Discrimination in the labor market occurs when an individual is treated differently based on certain characteristics such as race, gender, or age. In this scenario, Henry receiving a higher wage simply because he is white and Ryan is Black would be an example of labor-market discrimination.

Question 20

Which of the following is an example of labor-market discrimination? You may assume that worker A and worker B have identical characteristics except for the ones listed. A firm offers a higher salary to worker A than worker B because worker A

Accepted Answer

Worker A is offered a higher salary solely based on their age and gender, which is an example of labor-market discrimination. The other options are based on merit or specific job requirements, which would not constitute discrimination.

Quiz 19: Earnings and Discrimination

Attributing the gender wage gap to ongoing discrimination by employers will likely be incorrect because

Differences in human capital are likely to

Al and Steve are both reporters at the same newspaper. Al is black and Steve is white. Al earns less than Steve. Which of the following can explain why Al earns less?

People who grew up in the western part of Aquilonia have an accent distinct from people who grew up in the eastern part of the country. People from the west also receive lower wages than people from the east. From this information alone, we can conclude that it is possible that

Which of these instances would constitute labor-market discrimination? Courtney and Nicole are identical in all of their labor-market characteristics except that Courtney earns a higher salary than Nicole because

Empirical work that does not account for differences in the productivity of workers

George and Susan work at the same brewery. George works in advertising. Susan works as a forewoman in the bottling plant. George is paid more than Susan.

One of the problems with calculating the true amount of discrimination that takes place in the market for labor is

Allen and Ellen both work at Burger Ranch. Allen is paid more than Ellen. Which of the following could explain why Allen is paid more?

Which of the following is an example of labor-market discrimination? You may assume that worker A and worker B have identical characteristics except for the ones listed. A firm offers a higher salary to worker A than worker B because worker A

Harry is 40 and black. Dan is 40 and white. Both work as plumbers, but Harry earns more.

Which of these instances would constitute labor-market discrimination? Henry receives a higher wage than Ryan. Henry and Ryan are identical in all of their labor-market characteristics except that

Which of the following is an example of labor-market discrimination? You may assume that worker A and worker B have identical characteristics except for the ones listed. A firm offers a higher salary to worker A than worker B because worker A