Question 1

As an Internet retailer,I need to find a location for my headquarters.If I am primarily concerned with the cost of labor and want to pay those I hire as little as possible,I should establish my business in a(n):

Accepted Answer

The answer of As an Internet retailer,I need to find...

Question 2

Using an efficiency wage theory,why do some individuals earn more than the market equilibrium wage?

Accepted Answer

The answer of Using an efficiency wage theory,why do some...

Question 3

In which of two unionized firms would you expect workers to receive higher wages?

Accepted Answer

In a unionized firm where the threat of a strike is high, workers have more bargaining power and are more likely to negotiate for higher wages. The threat of a strike is a powerful tool for unions to exert pressure on employers to meet their demands.

Question 4

If you were the chief economics planner in Mitchell,South Dakota,a rural location that boasts the world's largest corn palace,what would be your biggest challenge in encouraging economic development in terms of location?

Accepted Answer

The answer of If you were the chief economics planner...

Question 5

As an employer,I want productive employees who will stay with the firm for an extended period of time,so I should pay:

Accepted Answer

The answer of As an employer,I want productive employees who...

Question 6

What is a significant difference between a union job and a non-union job in terms of pay?

Accepted Answer

Union jobs pay more than non-union jobs because of the threat of a strike. Unions have the power to negotiate with employers on behalf of their members and if the negotiations break down and an agreement cannot be reached, the union can call for a strike. This threat gives unions more bargaining power at the negotiating table, which can result in higher wages and better benefits for unionized workers.

Question 7

When comparing a union job to a non-union job,we would expect to see:

Accepted Answer

Typically, union jobs offer higher wages and better benefits compared to non-union jobs. This is because unions have collective bargaining power that allows them to negotiate fair wages and benefits for their members.

Question 8

What theory suggests that learning material on your own would not generate the same benefits as those achieved by formally attending classes and receiving a degree?

Accepted Answer

The signal theory suggests that attending formal classes and receiving a degree sends a signal to employers about an individual's abilities and commitment to learning. Learning material on one's own does not send the same signal and may not be viewed as favorably by employers.

Question 9

One frequently sees a strong relationship between median annual earnings and education level.What theory would suggest that education provides valuable skills?

Accepted Answer

The human capital theory suggests that education provides valuable skills, which increase an individual's productivity and earning potential. Therefore, higher levels of education lead to higher wages and better job opportunities.

Question 10

A white male from the Midwest earns $50,000 a year and a white female earns $40,000 a year.What can we conclude about this situation?

Accepted Answer

The information provided does not include details about the job roles, experience, education, or other factors that could explain the pay difference, making it impossible to conclude if discrimination is present based solely on the salary difference.

Question 11

As an employee at a convenience store,I am content to stay with my employer because my wage is 50% higher than the market rate.What economic theory could justify my employer's willingness to pay above the market rate?

Accepted Answer

The answer of As an employee at a convenience store,I...

Question 12

Why might I expect a fast-food job to pay a wage higher than the minimum wage?

Accepted Answer

Fast-food jobs often have high turnover rates, meaning that employees frequently leave for other jobs. To combat this, some fast-food companies offer efficiency wages, which are higher than the minimum wage, as an incentive for employees to stay. This can also lead to increased productivity and quality of work.

Question 13

My mother told me that I needed to go to college because it would be the only way I could get a high-paying job.What economic theory would justify her advice?

Accepted Answer

The human capital theory states that investment in education and training can increase an individual's productivity and earnings potential in the future. Therefore, going to college can be seen as a form of investment in one's human capital which can result in higher earnings in the long run.

Question 14

Besides sex discrimination,why might women earn less than men in the workplace?

Accepted Answer

Women may earn less than men in the workplace if they have fewer years of work experience. This could be due to factors such as taking time off to care for children or elderly family members, choosing lower-paying jobs due to gender stereotypes, or facing barriers to career advancement. It is important to address and overcome these barriers to ensure that women are able to achieve equal pay for equal work.

Question 15

When workers of the same ability are not paid the same amount because of a group characteristic such as ethnic origin or age,we call this:

Accepted Answer

Wage discrimination is the act of paying workers of the same ability and experience different wages because of a group characteristic such as race, gender, age, or nationality. This practice is unfair and violates equal pay for equal work principle.

Question 16

What theory would suggest that an employee should receive a wage higher than the equilibrium wage rate?

Accepted Answer

Efficiency wage theory suggests that paying employees a wage higher than the equilibrium wage rate can increase productivity and reduce turnover, resulting in long-term cost savings for the employer.

Question 17

In recent decades,more women than men have received undergraduate degrees.Consequently,women's wages will:

Accepted Answer

According to human capital theory, the increase in women's educational attainment and skills should lead to an increase in their wages. As they acquire more knowledge and skills, they become more productive and valuable in the labor market, which should translate into higher earnings. Therefore, the correct answer is D.

Question 18

As the owner of a television studio,I am concerned about the high wages I must pay my employees relative to wages paid by other television studio owners.A consultant has suggested that my location is a contributing factor to these higher wages because I have built my studio in a(n):

Accepted Answer

The answer of As the owner of a television studio,I...

Question 19

What theory would justify a job advertisement that reads: "Help Wanted! Looking for a person willing to stay with the firm for a long time.Excellent pay"?

Accepted Answer

The job advertisement is offering an "excellent pay" to attract someone who is willing to stay with the firm for a long time. This aligns with the concept of an efficiency wage, where the employer pays higher wages than the market rate to attract and retain the most productive employees. By offering a higher wage, the employer hopes to reduce turnover, increase productivity, and ultimately benefit the firm in the long run.

Question 20

The cost of education at an Ivy League university is over $50,000 per year.At a community college,the cost of education is only a few thousand dollars per year.What economic theory could justify enrolling in an Ivy League school?

Accepted Answer

The economic theory that could justify enrolling in an Ivy League school is the signal theory. According to this theory, attending a prestigious and expensive institution signals to potential employers that the student is high-achieving and intelligent. This increased perceived value can lead to better job opportunities and higher salaries, offsetting the high cost of education.

Quiz 15: Income,inequality,and Poverty

As an Internet retailer,I need to find a location for my headquarters.If I am primarily concerned with the cost of labor and want to pay those I hire as little as possible,I should establish my business in a(n) :