Question 1

According to the Hamermesh and Biddle study,people deemed more attractive than average earn

Accepted Answer

According to the Hamermesh and Biddle study, people deemed more attractive than average earn about 5 percent more than average looking people. They did not find a significant difference between the earnings of attractive and average looking people, but did find that unattractive people earned 15-20 percent less than average looking people.

Question 2

Of the theories listed below,which do the best job of explaining why educated people are paid more than uneducated people?

Accepted Answer

The human-capital theory suggests that education increases an individual's productivity and therefore, they are paid more. The signaling theory suggests that education signals that the individual is of higher quality, making them more attractive to employers. Both of these theories explain why educated people are paid more than uneducated people.

Question 3

Which of the following might explain the beauty premium found by labor economists Hamermesh and Biddle?

Accepted Answer

All three options could potentially contribute to the beauty premium found by labor economists. Good looks could be seen as an innate ability for certain jobs, leading to higher productivity and wages. Additionally, good looks may be indirectly associated with other types of abilities or qualities that are valued in the workplace. Finally, discrimination based on personal appearance could also play a role in the beauty premium. However, it is important to note that these explanations are not mutually exclusive and may interact with each other in complex ways.

Question 4

When employers sort employment applications into high-ability and low-ability people based on whether or not the applicant has a college degree (irrespective of major),they are providing evidence in support of the

Accepted Answer

The sorting of employment applications based on whether or not the applicant has a college degree (irrespective of major) is evidence of the signaling theory of education. This theory suggests that education serves as a signal of a person's abilities and traits, rather than actually increasing their productivity. Employers may use a college degree as a signal of a person's intelligence, work ethic, and perseverance, even if the degree itself is not directly relevant to the job.

Question 5

Suppose that a college student receives an offer for a summer internship with a stock brokerage firm.Unfortunately for the student,the internship is unpaid.Is it ever economically beneficial to accept an unpaid job?

Accepted Answer

Accepting an unpaid job can be economically beneficial if it provides valuable experience and skills that can be used to increase the individual's human capital. This can lead to better job opportunities and higher wages in the future. While there is an opportunity cost to accepting an unpaid job, the benefits of gaining experience and skills may outweigh this cost in the long run.

Question 6

A study by labor economists Hamermesh and Biddle found that

Accepted Answer

The study found that above-average looking people earn more than average-looking people, all else equal. Choices A and C are not correct as they suggest that shorter-than-average men and women or shorter women earn more, which is not what the study found. Therefore, the best choice is B.

Question 7

According to the human-capital view,education

Accepted Answer

The human-capital view suggests that education enhances productivity, meaning that individuals who receive higher levels of education are more productive in the workforce and can therefore earn higher lifetime earnings. Education is seen as an investment in an individual's skills and knowledge, which ultimately leads to higher productivity and earning potential.

Question 8

Which of the following theories would suggest that attending school does not improve productivity but that high-ability people are more likely to stay in school?

Accepted Answer

Signaling theory suggests that education serves as a signal to employers of a person's innate ability rather than as a means of increasing productivity. This theory would suggest that high-ability people are more likely to stay in school and attain higher degrees, but that attending school itself does not necessarily improve their productivity.

Question 9

Which of the following statements is not correct?

Accepted Answer

If the human capital theory of education is correct, additional schooling should increase wages as it leads to workers acquiring more skills and knowledge. Therefore, statement C is not correct as it contradicts the theory.

Question 10

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

Accepted Answer

Human-capital theory posits that education and training increase workers' productivity, which in turn leads to higher wages. This theory suggests that increasing educational levels for all workers would raise their productive contribution to the economy, resulting in higher wages for all.

Question 11

Which of the following is not an explanation for why better educated workers earn more,on average,than less educated workers?

Accepted Answer

This statement explains why the earnings of workers with more education can be higher than those with less education due to the fact that skilled labor becomes a substitute for unskilled labor, resulting in higher earnings for those with more education. The other statements (A, B, and D) provide valid explanations for the wage differential between more and less educated workers.

Question 12

Which of the following theories explains why increased education translates into higher wages?

Accepted Answer

The human-capital theory suggests that education and other forms of investment in one's skills and knowledge create higher productivity and increase an individual's value to an employer, thus leading to higher wages.

Question 13

The human capital theory explanation for why people invest in education has been challenged by a theory that suggests

Accepted Answer

The theory suggests that education acts as a signal of ability rather than just increasing productivity and earning potential.

Question 14

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

Accepted Answer

Signaling theory suggests that education serves as a signal of an individual's productivity rather than actually enhancing productivity. Therefore, according to this theory, raising all workers' educational levels would not necessarily lead to an increase in wages as it is the perceived productivity, rather than the actual level of education, that matters in determining wages.

Question 15

A college degree makes a person more productive according to

Accepted Answer

The answer of A college degree makes a person more...

Question 16

A signaling theory of education suggests that educational attainment

Accepted Answer

The signaling theory of education posits that educational attainment serves as a signal of both high marginal productivity (choice A) and natural ability (choice B). The theory suggests that employers use educational credentials as a way to screen potential employees, assuming that individuals with higher levels of education are likely to be more productive and have higher ability levels. However, this theory does not necessarily suggest that education increases the productivity of low-ability workers (choice C).

Question 17

Which of the following statements represents the idea behind signaling in education?

Accepted Answer

The answer of Which of the following statements represents the...

Question 18

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

Accepted Answer

If the effort to increase education had no effect on wages, it suggests that education is not increasing a person's productivity directly, which is the main assumption of the human-capital view. Instead, it suggests that education is being used as a signal of a person's abilities and willingness to work hard, which is the main assumption of the signaling view. Therefore, the evidence supports the signaling view of education.

Question 19

Jake and Bill are both college graduates.Jake is a patrolman and Bill is a detective in the same police precinct.While Jake's job is inherently more dangerous than Bill's,Bill passed a difficult exam to gain promotion to detective.Bill earns more than Jake because

Accepted Answer

The answer of Jake and Bill are both college graduates.Jake...

Question 20

Bill and Phil are identical twins who attended grammar school through college together.Bill took a job as an engineer who does not have to travel out of the state.Phil took a job as an engineer who must travel out of state once a week.Bill earns $105,000 a year,and Phil earns $185,000 a year.Select the best explanation for this wage difference.

Accepted Answer

Phil's higher wage compensates for the fact that he must travel out of state once a week, which is likely considered an inconvenience or burden compared to Bill's job that does not require travel.

Quiz 19: Earnings and Discrimination