Question 1

The statement that 'night shift workers make a higher wage than day shift workers' is likely to reflect:

Accepted Answer

The statement suggests that there is a wage differential between night shift and day shift workers. This could be indicative of a supply-demand imbalance or a worker preference for day shift jobs. Option A best reflects this scenario as it suggests that workers generally prefer day shift jobs, thereby creating a premium for night shift labour.

Question 2

Doppelsöldners were sixteenth century German soldiers that received double pay for fighting in the front of their unit. The likely difference in wages was caused by:

Accepted Answer

Doppelsöldners were paid double because they were given the most dangerous job in battle, which was to fight at the front of their unit.

Question 3

On the basis of knowledge obtained in her economics class, Sarah is likely to conclude that:

Accepted Answer

This is because according to the theory of supply and demand, if the job does not require any special skills, there will be a larger pool of potential workers who could do the job, which means the employer has more bargaining power and can offer a lower wage.

B is not necessarily true, as the "fun factor" of a job does not always determine its wage.

C may or may not be true, as the shift differential for night work can vary depending on the employer and industry.

Question 4

The statement, 'coal miners are paid more than workers with similar levels of education', is likely to reflect the fact that:

Accepted Answer

Coal mining jobs are inherently more dangerous than jobs with similar education requirements, leading to higher pay rates to compensate for the increased risk to life and limb.

Question 5

On the basis of knowledge obtained in his economics class, Ferris is likely to conclude that:

Accepted Answer

According to the knowledge obtained in his economics class, the wage offer tends to increase when there is a requirement for special training or certification.

Question 6

An increase in the human capital of workers is:

Accepted Answer

An increase in human capital, through education or training, usually leads to an increase in productivity and skills of workers. This, in turn, increases their value of marginal product, as each worker contributes more to the production process. Therefore, an increase in human capital is likely to increase their value of marginal product.

Question 7

The ownership of human capital:

Accepted Answer

The answer of The ownership of human capital:
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Question 8

The return to investment in human capital is observed:

Accepted Answer

The return to investment in human capital is observed in the wage differential between workers. In other words, workers with more education or skills generally earn higher wages than those with less education or skills, which reflects the return on the investment in their human capital.

Question 9

A compensating differential means that:

Accepted Answer

A compensating differential refers to the wage difference that compensates for the non-monetary characteristics of different jobs, such as risk, working conditions, or location.

Question 10

The wage difference between jobs that require education and those that don't:

Accepted Answer

The wage difference between jobs that require education and those that don't encourages workers to bear the cost of acquiring education. Because jobs that require education typically pay higher wages, workers are incentivized to obtain the necessary education and training in order to qualify for those jobs. This helps to ensure that the labor market has a supply of workers with the skills and education necessary to fill those jobs.

Question 11

When workers who work the night shift are paid more than those who do identical work on the day shift, this is referred to as:

Accepted Answer

The concept of compensating differential involves paying higher wages to workers who work under unfavorable conditions such as night shifts, hazardous environments, or extreme weather conditions. This is done to compensate for the additional discomfort, inconvenience, or risks associated with the job. Therefore, it is not wage inequity, discriminatory wage practice, or inefficient markets, as these terms imply unjust or arbitrary practices or market failures.

Question 12

Professional underwater divers are known to have high wages and work an average of only 20 hours a week. The high wages are partly explained by the fact that the job:

Accepted Answer

The fact that the job is likely to be very dangerous is a reason for the high wages. The other choices do not provide a clear explanation for the high wages.

Question 13

On the basis of knowledge obtained in her economics class, Sarah is likely to conclude that:

Accepted Answer

According to the principle of supply and demand, if the demand for a job requiring special training or certification is higher than the supply of individuals qualified for the job, the wage offer is likely to increase. Therefore, if the lifeguard job has a requirement for special training or certification, it would likely increase the wage offer. Choice A is incorrect because it assumes that individuals would be less willing to perform the job due to the restroom cleaning requirement, but this is not necessarily true. Choice C is incorrect because job requirements can have an impact on wages. Choice D is irrelevant to the economic factors that influence wages.

Question 14

The wage differential between educated workers and uneducated workers in developing economies is typically:

Accepted Answer

The wage differential between educated workers and uneducated workers in developing economies is typically larger than that which exists in developed economies. This can be attributed to the fact that there is a shortage of skilled and educated workers in developing economies, leading to an increased demand for these workers and subsequently higher wages. Additionally, education may be a more significant factor in determining productivity in developing economies, where technology and capital investment are less prevalent.

Question 15

The statement that 'public school teachers are paid less than engineers, but have similar amounts of education', is likely to reflect market conditions such that:

Accepted Answer

Public school teachers must receive a compensating wage differential because they require similar levels of education as engineers, but their wages are lower. This means that in order to attract and retain qualified teachers, their wages must be high enough to compensate for the lower pay compared to engineers. Furthermore, wage discrimination is more likely in markets for public school teachers due to factors such as gender, race, and other forms of biases.

Question 16

Sarah, a university student, is trying to consider what she should do for summer employment. Two recruiters show up at her university in search of summer workers. Recruiter A is looking for lifeguards to patrol the beach. Recruiter B is looking for workers to staff positions at a summer youth camp.
On the basis of knowledge obtained in her economics class, Sarah is likely to conclude that:

Accepted Answer

Based on the principles of supply and demand, a larger pool of applicants for a job (such as the lifeguard position) tends to drive down wages, while a smaller pool of applicants (such as for the summer camp job) tends to drive up wages. The information given does not provide any evidence to support option C.

Question 17

Technology is an important factor in explaining the high incomes of superstars because:

Accepted Answer

Technology allows for the best producer to reach a large number of customers at a low cost, making it possible for superstars to earn high incomes by supplying a larger customer base than their competitors.

Question 18

Both Lee and John have got a business degree from a university. They both got jobs as research analysts in the same firm. Two years later Lee is earning more money than John. This wage difference is likely caused by:

Accepted Answer

Compensating differentials refer to differences in wages due to differences in job characteristics such as risk, unpleasant working conditions, or long hours. It is likely that Lee's job duties have more compensating differentials than John's, resulting in a higher wage. Discrimination by the firm or regulations in the labor market are unlikely to be the main causes of the wage difference as both Lee and John have the same degree and job position. Differences in work experience may be a factor but are not mentioned in the scenario.

Question 19

Library assistants are known to have low wages. This is likely to be partly explained by the fact that:

Accepted Answer

Library assistants jobs are perceived to be relatively easy, which can lead to lower wages compared to jobs that are perceived to be more difficult or require more skills/training.

Question 20

A plumber who specialises in cleaning plugged sewer lines is typically paid a higher wage than a plumber who works on installing water systems in new residential housing. This is likely to be partly explained by the fact that:

Accepted Answer

The perception of working with clogged sewer lines as a 'dirty' job can lead to higher wages due to the undesirable nature of the work, compensating for the unpleasant aspects of the job.

Quiz 20: Earnings and Discrimination

The statement that 'night shift workers make a higher wage than day shift workers' is likely to reflect:

Doppelsöldners were sixteenth century German soldiers that received double pay for fighting in the front of their unit. The likely difference in wages was caused by:

On the basis of knowledge obtained in her economics class, Sarah is likely to conclude that:

The statement, 'coal miners are paid more than workers with similar levels of education', is likely to reflect the fact that:

On the basis of knowledge obtained in his economics class, Ferris is likely to conclude that:

An increase in the human capital of workers is:

The ownership of human capital:

The return to investment in human capital is observed:

A compensating differential means that:

The wage difference between jobs that require education and those that don't:

When workers who work the night shift are paid more than those who do identical work on the day shift, this is referred to as:

Professional underwater divers are known to have high wages and work an average of only 20 hours a week. The high wages are partly explained by the fact that the job:

On the basis of knowledge obtained in her economics class, Sarah is likely to conclude that:

The wage differential between educated workers and uneducated workers in developing economies is typically:

The statement that 'public school teachers are paid less than engineers, but have similar amounts of education', is likely to reflect market conditions such that:

Technology is an important factor in explaining the high incomes of superstars because:

Both Lee and John have got a business degree from a university. They both got jobs as research analysts in the same firm. Two years later Lee is earning more money than John. This wage difference is likely caused by:

Library assistants are known to have low wages. This is likely to be partly explained by the fact that:

A plumber who specialises in cleaning plugged sewer lines is typically paid a higher wage than a plumber who works on installing water systems in new residential housing. This is likely to be partly explained by the fact that: