Question 1

San Francisco is a beautiful city with great weather.It also has limited real estate,creating a higher cost of living.How do firms account for these two conflicting compensating differentials when determining wages?

Accepted Answer

Firms in San Francisco will take into consideration both the favorable weather and high cost of living when determining wages for employees. However, the market will ultimately reach an equilibrium price that balances both factors and ensures an adequate supply of labor. This means that wages may be higher in San Francisco compared to other cities, but they are still within a reasonable range that attracts workers to the area.

Question 2

Why might a less developed country have a greater degree of income inequality?

Accepted Answer

In less developed countries, there is often a concentration of wealth among a small group of individuals, which leads to a higher degree of income inequality. This may be due to factors such as limited economic opportunities, lack of resources for education and skill development, or political corruption and instability. As a result, most people in these countries live in poverty while a few enjoy great wealth, creating a wide gap between the rich and the poor.

Question 3

When workers with the same ability as others are not paid the same because of their race,ethnic origin,sex,age,or religion,it is defined as

Accepted Answer

Wage discrimination is the practice of paying workers with the same ability and qualifications differently based on their race, ethnicity, sex, age, religion, or any other non-job-related factors, which is unfair and against equal opportunities in the workplace. Therefore, the best option is B. The other options do not directly relate to paying workers differently based on discrimination factors.

Question 4

The ________ gives victims of wage discrimination more time to file a complaint with the government.

Accepted Answer

The Lilly Ledbetter Fair Pay Act, signed into law in 2009, extends the time period for filing a wage discrimination complaint with the government. Under this act, the 180-day statute of limitations for filing a complaint with the Equal Employment Opportunity Commission (EEOC) resets with each paycheck affected by the discrimination. This gives victims more time to file a claim and seek justice for wage discrimination. The other options listed are either not related to addressing wage discrimination or do not specifically extend the time period for filing complaints.

Question 5

Why might occupational crowding persist in certain industries,despite educational parity and an elimination of discrimination?

Accepted Answer

Personal preferences for certain types of jobs means that some groups will always have higher representation in those industries. Even if there were equal educational opportunities and no discrimination, some individuals may still prefer certain types of work over others. For example, studies have shown that women are more likely to pursue careers in healthcare and education, while men are more likely to pursue careers in engineering and technology. These preferences may continue to result in occupational crowding even with educational parity and no discrimination.

Question 6

According to the text,three women for every two men are enrolled in postsecondary education.This might lead to a reduction in the gender gap for all of the following reasons,EXCEPT that

Accepted Answer

A diminishing quantity supplied of college-educated males would not shift the labor demand to the right; instead, it might shift the labor supply to the left, potentially increasing wages for males rather than reducing the gender gap.

Question 7

When certain groups or classes are relegated to a narrow range of jobs in the economy,it is called

Accepted Answer

Occupational crowding refers to a phenomenon where certain groups or classes are concentrated or crowded into a narrow range of jobs or occupations in the economy. This is often caused by institutional barriers, discrimination, or other societal factors that limit access to a broader range of job opportunities. This can have negative effects on individuals, as well as on the broader economy, by limiting innovation and growth.

Question 8

The ________ is a comparison of the wealth in the top and bottom quintiles of an economy.

Accepted Answer

The income inequality ratio compares the wealth in the top 20% of a population to the wealth in the bottom 20%. This ratio provides insight into how equally or unequally wealth is distributed across a population.

Question 9

Of the five factors that lead to income inequality,over which one does an individual actually have direct control?

Accepted Answer

Individuals have direct control over their training and education, as they can choose to pursue further studies or skills development to improve their income potential.

Question 10

All of the following contribute to wage discrimination,EXCEPT

Accepted Answer

In-kind transfers refer to non-monetary benefits such as healthcare benefits, retirement plans, etc. They do not necessarily contribute to wage discrimination. The other options (race, human capital, sex, and age) are known to contribute to wage discrimination.

Question 11

The life-cycle wage pattern is a type of ________ that is facilitated by increases in ________.

Accepted Answer

The answer of The life-cycle wage pattern is a type...

Question 12

In some less developed economies,property rights aren't guaranteed and bribing public officials is often necessary to engage in commerce.In this system,economists would point to ________ as an obstacle to greater income equality.

Accepted Answer

In this scenario, corruption is the obstacle to greater income equality. Bribery and lack of guaranteed property rights create a system where wealth is concentrated among those who can afford to pay off officials, rather than being available to all members of society. This leads to income inequality, as those without the means to bribe officials are at a significant disadvantage in the marketplace.

Question 13

Based on research into wage discrimination,economists believe

Accepted Answer

Economists believe that broader factors beyond bias, such as differences in education, work experience, and career choices, play major roles in wage discrimination. While bias may still exist, it is not the sole cause of the wage gap.

Question 14

How can measurements of income inequality be misleading to politicians and economists?

Accepted Answer

Income inequality is complex and can be influenced by various factors, making it difficult to measure accurately and easy to misinterpret.

Question 15

Organizations like 5th Pillar,which report attempted bribery to authorities,are combating the forces of ________ in society.

Accepted Answer

Organizations like 5th Pillar that report attempted bribery are combating the forces of corruption in society.

Question 16

"For every $1 men make,women make,on average,82 cents," is used to describe the gender wage gap.Which is the best description for this statement?

Accepted Answer

The statement reflects an average across various factors including profession, education, lifestyle, gender bias, and others, rather than implying a direct one-to-one comparison of pay for the same work or attributing the gap solely to discrimination or personal choices.

Question 17

The reversal of occupational crowding has an interesting side effect: the increased supply of female labor in traditionally male-dominated occupations will result in a(n)________ in wages.

Accepted Answer

The increased supply of female labor in traditionally male-dominated occupations typically leads to a decrease in wages due to the basic economic principle of supply and demand. When the supply of labor increases (more workers available for the same jobs), it often results in lower wages for those positions.

Question 18

Which of the following factors does not lead to income inequality?

Accepted Answer

Income mobility refers to the ability of individuals to move up or down the income ladder. It does not directly contribute to income inequality. The other factors (ability, wealth, discrimination, and corruption) can all have an impact on income inequality.

Question 19

Diminishing marginal returns explain the reduction of value in additional exertions of effort.The concept of ________ indicates the opposite-that the ultimate marginal production can result in disproportionate wage increases.

Accepted Answer

The concept of winner-take-all suggests that the ultimate marginal production can result in disproportionate wage increases, meaning that only the top performers in a field receive a significantly higher wage than their peers. This is in contrast to efficiency wages, which aim to increase productivity and reduce turnover by offering higher wages to all workers in a particular field or company. Productivity discrimination, inclining marginal utility, and maximum human capital are not related to the concept of winner-take-all.

Question 20

In professions where beauty is considered a necessary element of the job,such as modeling,a high value placed on the attribute is most likely

Accepted Answer

A compensating differential is a higher wage offered for a less desirable job trait, such as working in dangerous conditions. In the case of modeling, where beauty is a necessary attribute, a higher wage may be offered as a compensating differential to attract individuals who possess this trait. Therefore, a high value placed on beauty in modeling is most likely a result of a compensating differential.

Quiz 15: Income,inequality,and Poverty