Deck 19: Earnings and Discrimination

Question 1

If unskilled labour is relatively plentiful and cheap in many foreign countries,then as Canada expands its trade with these foreign countries,what happens to the domestic demand for unskilled and skilled labour

A)The domestic demand for unskilled labour will rise and demand for skilled labour will fall.
B)The domestic demand for skilled labour will rise and demand for unskilled labour will fall.
C)The domestic demand for both skilled and unskilled labour will rise proportionately.
D)The domestic demand for both skilled and unskilled labour will be unaffected, assuming there are no barriers to free trade.

Answer 1

The domestic demand for skilled labour will rise and demand for unskilled labour will fall.

Question 2

Scenario 19-1
Ferris, a student at a community university, is considering what he should do for summer employment.Two recruiters show up at his school in search of summer workers.Recruiter A is looking for lifeguards to patrol the beach at an exclusive island resort in the Caribbean.Recruiter B is looking for workers to staff positions at a local summer youth camp.
Refer to Scenario 19-1.Ferris is carefully considering the options that each recruiter presents.On the basis of knowledge obtained in his economics class,what is Ferris likely to conclude

A)Because the lifeguard job sounds like a fun job on the beach, the wage is likely to be high.
B)Because the lifeguard job would expose him to a threat of skin cancer, the wage is likely to be low.
C)If the lifeguard job has a requirement for special training or certification, the wage offer will be higher than otherwise.
D)If the lifeguard job also requires a willingness to clean public restrooms, the wage offer will be lower than otherwise.

Answer 2

If the lifeguard job has a requirement for special training or certification, the wage offer will be higher than otherwise.

Question 3

Scenario 19-1
Ferris, a student at a community university, is considering what he should do for summer employment.Two recruiters show up at his school in search of summer workers.Recruiter A is looking for lifeguards to patrol the beach at an exclusive island resort in the Caribbean.Recruiter B is looking for workers to staff positions at a local summer youth camp.
Refer to Scenario 19-1.Ferris is carefully considering the options that each recruiter presents.On the basis of knowledge obtained in his economics class,what is Ferris likely to conclude

A)The lifeguard job is likely to be more fun than the summer camp job, so the wage for that job is likely to be higher than otherwise.
B)If the summer camp job doesn't require any special skills, the wage for that job is likely to be lower than otherwise.
C)Because the summer camp job requires some night-shift work, the wage for that job is likely to be lower than otherwise.
D)The lifeguard job is likely to offer good social opportunities, so the wage for that job is likely to be lower than otherwise.

Answer 3

If the summer camp job doesn't require any special skills, the wage for that job is likely to be lower than otherwise.

Question 4

When competitive labour markets are in equilibrium,what does the neoclassical theory of labour predict

A)The distribution of wages across the economy will be bell-shaped.
B)The wage paid to each worker is equal to that worker's marginal product of labour.
C)Each worker is paid the value of his/her marginal contribution to the economy.
D)The minimum wage will be binding.

Question 5

Taxicab drivers in large cities are likely to earn more than taxicab drivers in rural areas.What could be one reason for this wage differential

A)Driving a taxi in a large city is more dangerous than driving in a rural area.
B)Driving in large cities is more exciting than driving in rural areas.
C)Driving in a large city is easier than driving in a rural area.
D)Drivers in a large city can work longer hours than those in a rural area.

Question 6

Travis,a university student,is considering what he should do for summer employment.Two recruiters show up at his school in search of summer workers.Recruiter A is looking for workers to help a disaster relief agency distribute food aid in Greece.Recruiter B is looking for custodial help to clean motel rooms in a motel located near the entrance to Jasper National Park.Travis is carefully considering the options that each recruiter presents.On the basis of knowledge obtained in his economics class,what is Travis likely to conclude

A)If the motel job requires some night-shift work, wages are likely to be lower than otherwise.
B)The job that is likely to be the most fun is more likely to have a higher wage.
C)If the motel job doesn't require any special skills, the wage offer is likely to be lower than otherwise.
D)The motel job is less pleasant, will attract fewer applicants, and will have a higher wage.

Question 7

What does the basic neoclassical theory of the labour market predict

A)Workers earn a wage equal to the value they contribute to the economy.
B)Wages are determined entirely by market demand.
C)Wages are determined entirely by market supply.
D)Workers are compensated according to their contribution to the social value of society.

Question 8

Wage differences that cannot be explained by the number of years of training are likely to be the result of factors associated with which of the following

A)demand, but not supply
B)supply, but not demand
C)compensating differentials
D)conditions of regulated markets

Question 9

When workers who work the night shift are paid more than those who do identical work on the day shift,how is this characterized

A)as a discriminatory wage practice
B)as a compensating differential
C)as a wage inequity
D)as a market inefficiency

Question 10

A plumber who specializes in cleaning plugged sewer lines is typically paid a higher wage than a plumber who works on installing water systems in new residential housing.What is likely to be a partial explanation

A)Plumbers who work with sewer lines require years of specialized training.
B)Plumbing jobs that involve sewer lines are likely to have an element of personal satisfaction.
C)Plumbers who work with sewer lines are more likely to work a standard shift.
D)Plumbers who work with sewer lines are likely to be perceived as having a "dirty" job.

Question 11

When workers do identical work,but get paid different wages,what is likely to exist

A)a compensating differential
B)an accounting error
C)no market explanation for the wage difference
D)differences that are difficult to identify

Question 12

Which argument likely reflects the statement "Night-shift workers make a higher wage than day-shift workers"

A)Most people's preference is to work the day shift.
B)Some people just prefer to work a night shift for nonmonetary reasons.
C)Night shift jobs are generally more technically difficult.
D)More women than men work the night shift.

Question 13

Park wardens at Banff National Park are known to have relatively low wages.What is likely to be a partial explanation

A)Park wardens are often part-time university students.
B)Park wardens don't need much money to live.
C)Park warden jobs are perceived to be dangerous.
D)Park warden jobs are perceived to be fun.

Question 14

The job of night watchman at the Royal Tyrrell Museum in Drumheller is known to have a high wage.What is likely a partial explanation

A)The job is likely to require specialized skills.
B)The job is likely to be difficult.
C)The job is likely to be incredibly dull.
D)The job is likely to provide plenty of time for self-reflection.

Question 15

What does the term "compensating differential" refer to

A)the fact that workers that do similar work should be paid the same wage
B)the fact that some workers live farther from their jobs than do other workers
C)a wage difference that is based on monetary characteristics
D)a wage difference that is provided to offset the nonmonetary characteristics of different jobs

Question 16

Professors are paid less than doctors and lawyers.What is likely to be a partial explanation

A)Teaching jobs are easy.
B)Professors have less education than doctors and lawyers.
C)Professors need very little money to live.
D)The job offers a high element of personal satisfaction.

Question 17

Store clerks are known to have low wages.What is likely to be a partial explanation

A)Store clerk jobs are perceived to be relatively easy.
B)Store clerk jobs are perceived to be relatively difficult.
C)Many people perceive the job of store clerk as having an element of personal satisfaction.
D)Store clerk positions are part-time jobs.

Question 18

Other things equal,when the supply of workers is scarce,what would one predict that market wages would be

A)relatively high
B)relatively low
C)determined solely by factors that affect demand
D)determined outside the domain of the neoclassical theory

Question 19

Professional underwater divers are known to have high wages and work an average of only 20 hours a week.What is likely a partial explanation

A)The job is likely to be very dull.
B)The job is likely to be fun.
C)The job is likely to be very dangerous.
D)The job is very competitive.

Question 20

When the supply of workers is plentiful,what would one predict that market wages would be

A)determined outside the domain of the neoclassical theory
B)determined solely by factors that affect demand
C)low, other things equal
D)high, other things equal

Question 21

If empirical tests of the human-capital theory find conclusive evidence that education enhances productivity,then what would optimal public policy suggest

A)The benefits of increased productivity need to be weighed against the opportunity cost of education.
B)Compulsory schooling laws increase social well-being.
C)Everyone should be required to finish high school.
D)A university education should be required of all members of society.

Question 22

The Asian Development Bank has been investing in education and training programs in the developing economies of Asia over the past five years.As a result of this investment,what would economists who adhere to the human capital view of education likely predict

A)rising wages as labour productivity is enhanced
B)falling wages as the labour market is saturated with too many educated workers
C)no change in the marginal productivity of capital
D)no change in the marginal productivity of labour

Question 23

What can we say about the transferability of the ownership of human capital

A)It is typically embodied in related physical capital.
B)It may be subject to government restrictions on transferability.
C)It is not generally transferable.
D)It is easily transferable to multiple individuals.

Question 24

The international trade hypothesis has been advanced as an explanation for the widening earnings gap between skilled and unskilled workers in the U.S.What does this hypothesis assert happens to the domestic demand for skilled and unskilled labour when international trade expands

A)The domestic demand for skilled labour rises, and the domestic demand for unskilled labour also rises.
B)The domestic demand for skilled labour rises, and the domestic demand for unskilled labour falls.
C)The domestic demand for skilled labour falls, and the domestic demand for unskilled labour rises.
D)The domestic demand for skilled labour falls, and the domestic demand for unskilled labour also falls.

Question 25

What can we say about the earnings gap between workers with high skills and workers with low skills in Canada

A)It has not been documented by reliable evidence.
B)It has remained roughly unchanged over the past 27 years.
C)It is evident, but it has diminished by 50% over the past 27 years.
D)It is evident, and it has widened over the past 27 years.

Question 26

Which argument likely reflects the statement "Public school teachers are paid less than engineers,but have similar amounts of education"

A)Engineering classes at the university are universally less difficult than are education classes at the university.
B)Engineers have lower intrinsic job satisfaction than public school teachers.
C)Wage discrimination is more likely in markets for public school teachers.
D)There is no compensating wage differential that applies to public school teachers.

Question 27

When an employer pays the cost of educating a worker,what motivation is most likely

A)He is demonstrating altruistic motives.
B)He is pursuing some objective other than profit maximization.
C)He hopes to recapture his investment in the form of increased labour productivity.
D)He receives reimbursement from the government for the cost of the education.

Question 28

What can we say about the wage difference between jobs that require education and those that do not

A)It is not likely to be related to productivity differences.
B)It is a barrier to obtaining an education.
C)It does not affect the supply of workers in the different labour markets.
D)It encourages workers to bear the cost of acquiring education.

Question 29

Which comparison best illustrates a compensating differential

A)John's wage is higher than Jane's because the value of John's marginal product is higher than Jane's.
B)Beth's wage is higher than Bill's because Beth is very personable and Bill is very impatient.
C)Karl's wage is higher than Kay's because Karl's job may well cause long-term health problems and Kay's job will not impair her health.
D)Brenna's wage is higher than Bart's because Brenna is more productive.

Question 30

What is the main difference between human capital and physical capital

A)Human capital is an important determinant of wages, but unlike physical capital, it plays no important role in the production of goods and services.
B)Human capital is an important determinant of wages, and similar to physical capital, it plays an important role in the production of goods and services.
C)Human capital is a specific type of physical capital.
D)Human capital is very different from physical capital in that physical capital represents an investment, while human capital does not represent an investment.

Question 31

Which argument likely reflects the statement "Coal miners are paid more than other workers with similar levels of education"

A)Coal mining is a declining industry.
B)Coal mining jobs are dangerous.
C)All coal mines use union labour.
D)Coal exports are rising.

Question 32

What would be considered an investment in human capital

A)education
B)a teacher's blackboard
C)the purchase of a new computer to enhance labour productivity
D)the purchase of a new suit for job interviews

Question 33

Other things equal,when will a particular job likely pay a higher wage

A)if it involves danger to the worker
B)if it involves personal enjoyment for the worker
C)if it involves intellectual stimulation for the worker
D)if it involves a long commute for the worker

Question 34

In recent years,what has happened to the ratio of earnings of the typical university graduate to the earnings of the typical high school graduate without additional education

A)It has risen as the demand for skilled labour has increased relative to the demand for unskilled labour.
B)It has risen as the demand for skilled labour has decreased relative to the demand for unskilled labour.
C)It has fallen as the demand for skilled labour has increased relative to the demand for unskilled labour.
D)It has fallen as the demand for skilled labour has decreased relative to the demand for unskilled labour.

Question 35

Which argument likely reflects the statement "Professors are paid less than lawyers and doctors,but have similar amounts of education"

A)Education is not likely to be related to compensation.
B)Professors are affected by a compensating wage differential.
C)The jobs of doctors and lawyers provide more job satisfaction than the jobs of professors.
D)Professors must receive an equivalent wage differential.

Question 36

What does the term "compensating differential" directly refer to

A)the level of wages earned by workers in different jobs
B)the level of education required for workers in different jobs
C)the level of safety that workers experience in different jobs
D)the level of personal and intellectual satisfaction that workers experience in different jobs

Question 37

Where is the return on investment in human capital observed

A)in the wage rate of university professors
B)in the wage differential between workers
C)in the high school dropout rate in inner-city urban school districts
D)in the low wages of educated factory workers

Question 38

A prestigious private high school requires each of its teachers to have a Ph.D.in the subject they teach.Which effect is this requirement likely to have

A)an increase in the supply of teachers to this school
B)an increase in wages for teachers at the private school, relative to those at public schools
C)a decrease in the marginal product of teachers at the private school
D)an increase in the demand for teachers by this school

Question 39

What has happened to the earnings gap between workers with high skills and workers with low skills in Canada over the past 27 years

A)It has remained relatively constant over this period.
B)It has grown over this period.
C)It has widened for men and narrowed for women over this period.
D)It has narrowed for men and widened for women over this period.

Question 40

What have economists who study the value of skills in the labour markets documented

A)a decrease in the earnings gap between low-skill and high-skill workers over the past 27 years in the United States but not in Canada
B)an increase in the earnings gap between low-skill and high-skill workers over the past 27 years in Canada, but not in the United States
C)a decrease in the earnings gap between low-skill and high-skill workers over the past 27 years in both Canada and the United States
D)an increase in the earnings gap between low-skill and high-skill workers over the past 27 years in the United States, but not in Canada

Question 41

Which statement best represents the idea behind signalling in education

A)Education can turn an unproductive person into a productive person.
B)Most university graduates wouldn't be half as productive if it were not for the years they spend in the classroom.
C)The more naturally productive someone is, the more they are inclined to educate themselves.
D)Some schools turn out more productive students than others.

Question 42

What does a signalling theory of education suggest

A)Education is an important measure of human capital.
B)Education is a signal of social status.
C)Education does not necessarily increase productivity.
D)Education necessarily increases productivity.

Question 43

According to the human-capital view,what effect does education have

A)It has no effect on lifetime earnings.
B)It alters work ethic.
C)It enhances productivity.
D)It improves social status.

Question 44

When computers are used to replace workers on a factory production line,what will happen to the wage gap between skilled and unskilled workers

A)It will increase only if the company can increase the price of its product.
B)It is likely to increase.
C)It is likely to decrease.
D)It will not change.

Question 45

When employers sort employment applications into high-ability and low-ability people based on the attainment of a university degree (irrespective of major),they are providing evidence in support of which of the following

A)the human-capital theory of education
B)the signalling theory of education
C)the principle that education enhances marginal productivity
D)the neoclassical principle that most business owners are more interested in discriminating against a particular group than in maximizing profits

Question 46

What are business firms attempting to reward when they pay salespeople a percentage of their sales

A)work effort
B)loyalty to the firm
C)years of schooling
D)years of experience

Question 47

What can we find in empirical research of wage differentials

A)Effort and ability are not likely to contribute to large differences in wages in the Canadian economy.
B)Economists typically find that measurable factors explain less than half of the variation in wages.
C)Economists typically find few factors that are not explicitly measurable.
D)Unmeasurable influences on wage differences are found to be quite small.

Question 48

Which scenario would serve to decrease the demand for unskilled labour in Canada

A)increased productivity gains among the unskilled labourers
B)increased demand for goods produced by unskilled labour
C)increased international trade with countries where unskilled labour is more plentiful
D)increased supply of migrant workers

Question 49

Which finding have economists who study labour markets discovered

A)Chance is difficult to measure, but only about five percent of wage differences are related to chance.
B)Ability is not difficult to measure, but it is largely insignificant in explaining wage differences.
C)Work effort is difficult to measure, but it is not likely to contribute much to an explanation of wage differences.
D)Ability, effort, and chance are all likely to be significant contributors to wage differences.

Question 50

Workers whose skills become obsolete as a result of technological change are often paid a lower wage.What is this a result of

A)natural ability
B)geographic location of employment
C)chance
D)work effort

Question 51

Nemedia and Aquilonia have just started to trade with each other.Nemedia exports goods produced with skilled labour and imports goods made with unskilled labour from Aquilonia.Over time,what would we expect will happen to the wages of skilled and unskilled labour in Nemedia

A)The wages of skilled labour in Nemedia will rise, and the wages of unskilled labour in Nemedia will fall.
B)The wages of skilled labour in Nemedia will fall, and the wages of unskilled labour in Nemedia will rise.
C)The wages of skilled labour in Nemedia will rise, and the wages of unskilled labour in Nemedia will rise.
D)The wages of skilled labour in Nemedia will fall, and the wages of unskilled labour in Nemedia will fall.

Question 52

Why do major-league hockey players get paid more than minor-league players

A)Major-league players are better athletes.
B)The higher wage reflects a compensating differential.
C)Playing in the major leagues is less pleasant than playing in the minor leagues.
D)The higher wage is often due to talented agents.

Question 53

Which view of education is best characterized by the belief that education makes a person more productive and thereby raises his or her wage

A)the compensating-differential view of education
B)the natural-ability view of education
C)the unmeasured-variables view of education
D)the human-capital view of education

Question 54

A recent law school graduate is considering two offers to practice law,one in Ontario and one in Nova Scotia.Rumour has it that it is very difficult to pass the Nova Scotia bar exam and meet other certification requirements required by the Nova Scotia Bar Association.Assuming all other things equal,where would the attorney expect to make a higher wage

A)She would be unable to predict the wage difference between Nova Scotia and Ontario.
B)She would expect to make a higher wage in Ontario.
C)She would expect to make a higher wage in Nova Scotia.
D)She would expect the wages in Ontario and Nova Scotia to be about the same.

Question 55

Which statement explains the "beauty premium"

A)Marginal productivity in all occupations has a physical dimension.
B)In some occupations, physical attractiveness of a worker may enhance the value of their marginal product.
C)Beauty acts as an implicit signal of innate intelligence.
D)Beauty is likely to reflect "good breeding" in people.

Question 56

What is most likely the reason for the difference in wages paid to major-league baseball players and minor-league baseball players

A)chance
B)natural ability
C)the fact that the major-league players' have better agents
D)the fact that the minor-league players' union is weak

Question 57

According to the signalling theory of education,what is correlated with educational attainment

A)marginal productivity
B)increasing wage gaps
C)decreasing wage gaps
D)natural ability

Question 58

Liberal arts majors are typically told that a liberal arts degree "does not restrict one's ability to find successful employment in business." This statement is likely to reflect a philosophy that a liberal arts degree is valuable for what reason

A)It is a signal of high ability.
B)It is an indication of how education can directly enhance marginal productivity.
C)It is directly linked to accumulation of human capital.
D)It is broadly based and still relevant to a career in business.

Question 59

The technology hypothesis has been advanced as an explanation for the widening earnings gap between skilled and unskilled workers in the U.S.What does this hypothesis emphasize as the likely effect of technological advances

A)They have increased the supply of skilled workers and increased the supply of unskilled workers.
B)They have increased the supply of skilled workers and decreased the supply of unskilled workers.
C)They have increased the demand for skilled workers and decreased the demand for unskilled workers.
D)They have decreased the demand for skilled workers and decreased the demand for unskilled workers.

Question 60

Which idea has challenged the human-capital theory explanation for why people invest in education

A)Schooling acts as a signal to future employers of a worker's ability.
B)Humans cannot be considered capital.
C)Productivity is not linked to wages.
D)University is largely a social phenomenon.

Question 61

Differences in wages between highly educated workers and less-educated workers are most likely to be considered which of the following

A)a compensating differential for the cost of becoming educated
B)a signal that the market is indifferent to the worker's level of human capital
C)a temporary wage gap that disappears over time
D)completely fair by everyone

Question 62

Which theory would suggest that attending school does not improve productivity,but that high-ability people are more likely to stay in school

A)physical-capital theory
B)human-capital theory
C)signalling theory
D)neoclassical theory

Question 63

Suppose that the country of Libraria made a concerted effort to increase the educational level of its people.If this effort had no effect on the wages of its workers,one might consider this as evidence in support of which of the following

A)the human-capital view of education
B)the signalling view of education
C)the compensating-differential theory of education
D)the natural-ability theory of education

Question 64

What is the primary economic explanation as to why a world-renowned architect cannot attain the "superstar" status that an athlete or actor can attain

A)Architects' services are not as highly valued by society as are the services of athletes and actors.
B)Only physically attractive people can become superstars, and it would be a coincidence if a highly talented architect were also physically attractive.
C)Government regulations place restrictions on the incomes of architects, but there are no such restrictions on the incomes of athletes or actors.
D)It is impossible for an architect to supply his or her services at low cost to every customer.

Question 65

What theory of education states that a university degree makes a person more productive

A)the compensating-differential theory of education
B)the human-capital theory of education
C)the signalling theory of education
D)the natural-ability theory of education

Question 66

What have studies shown about the earnings of union workers

A)They earn about 30 to 40 percent less than nonunion workers.
B)They earn about 10 to 20 percent less than nonunion workers.
C)They earn about 10 to 20 percent more than nonunion workers.
D)They earn about 30 to 40 percent more than nonunion workers.

Question 67

Which theory does the best job of explaining why educated people are paid more than uneducated people

A)the human-capital and price-fixing theories
B)the human-capital and signalling theories
C)the wage-differential and common-demand theories
D)the cost-allocation and derived-demand theories

Question 68

Since a major-league baseball player makes more money than a private preschool teacher,what can we conclude

A)Society values the services of a major-league baseball player more than the services of a private preschool teacher.
B)A major-league baseball player generates more revenue in the economy than a private preschool teacher.
C)Labour markets are generally inefficient and inequitable.
D)Professional sport is more highly valued than preschool education.

Question 69

Economists Alan Krueger and Stacy Dale found that earnings of university graduates were mostly unrelated to the toughness of their universities' admissions standards.Which theory will help explain this

A)theory of signalling
B)theory of human capital
C)theory of superstar phenomenon
D)theory of compensating differentials

Question 70

What is a union's major source of power

A)its high-profile leadership
B)its ability to increase productivity
C)its ability to threaten a strike
D)its ability to deny employers the opportunity to bargain over wages

Question 71

Why is a plumber unlikely to be as rich as a movie star

A)Compensating differential creates a higher wage in the movie business.
B)There haven't been any decent technological advances in the plumbing industry.
C)Productivity levels are low in the plumbing industry due to low worker morale.
D)A plumber can provide his services to only a limited number of customers.

Question 72

What is the most important source of human capital

A)education
B)effort
C)chance
D)physical strength

Question 73

Which theory would support the idea that education does NOT enhance productivity and that raising all workers' educational levels would NOT affect wages

A)signalling theory
B)human-capital theory
C)physical-capital theory
D)efficient-market hypothesis

Question 74

Which occupation can the superstar phenomenon be applied

A)high school teacher
B)anchorperson for a national news program
C)heart surgeon
D)amateur athlete

Question 75

Wayne Gretzky earned much more during his NHL career than a university professor would earn.What would the neoclassical theory of labour markets suggest

A)Wayne Gretzky was overpaid as a hockey player.
B)Wayne Gretzky was more valued by society than a university professor.
C)Wayne Gretzky is the greatest hockey player of all time.
D)Wayne Gretzky has contributed more to the economy's production of goods and services than a university professor.

Question 76

The most popular movie stars have high incomes for a number of reasons.What is one such reason

A)the ability of almost everyone to enjoy movies at a relatively low cost
B)the above-average intellect of the typical movie star
C)a compensating differential
D)the advanced degrees held by most stars in the movie industry

Question 77

Which theory is supportive of the idea that increasing educational levels for all workers would raise all workers' productivity and thereby their wages

A)the theory of compensating differential
B)the efficient-market hypothesis
C)human-capital theory
D)signalling theory

Question 78

What is a partial explanation for the very high pay earned by the most successful actors and actresses

A)They benefit from a compensating differential.
B)Moviegoers all want to see the very best actors.
C)They have acting degrees from accredited acting schools.
D)The supply of good actors is very large.

Question 79

What have studies shown about the earnings of nonunion workers

A)They earn about 30 to 40 percent less than union workers.
B)They earn about 10 to 20 percent less than union workers.
C)They earn about 10 to 20 percent more than union workers.
D)They earn about 30 to 40 percent more than union workers.

Question 80

For a "superstar" to emerge,what must be the case

A)It is possible to supply the good or service that the superstar produces at low cost to every customer.
B)Some customers are willing and able to pay large sums of money to enjoy the good or service provided by the superstar.
C)The superstar has a natural monopoly on his or her good or service.
D)The superstar is willing to settle for a level of pay that is less than his or her value of marginal product.