Question 1

As a result of their experiment economists Muriel Niederle and Lise Vesterlund found that

Accepted Answer

The experiment by Niederle and Vesterlund found that women chose competitive environments less than men, indicating that women may be less inclined to pursue high-paying corporate jobs that are often competitive in nature.

Question 2

Traci is a nurse,and she gets paid an additional $1.00 per hour for agreeing to work the night shift.Carol is also a nurse,but she works the day shift and does not get paid this extra dollar per hour.This difference in pay is an example of a compensating differential.

Accepted Answer

A compensating differential is a difference in pay for two similar jobs that compensates for undesirable aspects of one job compared to the other. In this case, Traci is being compensated for working the less desirable night shift.

Question 3

Compensating differentials are differences in wages related to the characteristics of a job.

Accepted Answer

Compensating differentials refer to differences in wages paid to employees based on the characteristics of their job, such as the level of risk involved or the working conditions. These differences are intended to compensate employees for the challenges or demands of their job.

Question 4

Daryn earns a higher salary than his friend Nick because Daryn is willing to work on the loading dock,whereas Nick prefers to work in an air-conditioned office.The difference in salary could illustrate a compensating differential.

Accepted Answer

This is correct as a compensating differential is a difference in wages that reflects a difference in working conditions. In this case, Daryn earns more because he is willing to work in a less desirable environment, i.e. on the loading dock, while Nick prefers the comfort of an air-conditioned office.

Question 5

In the experiment conducted by economists Muriel Niederle and Lise Vesterlund

Accepted Answer

The answer of In the experiment conducted by economists Muriel...

Question 6

As a result of an increase in the earnings gap between skilled and unskilled jobs,the incentive to get a college education has been declining.

Accepted Answer

This statement is false. The increase in the earnings gap between skilled and unskilled jobs has actually increased the incentive to get a college education, as individuals recognize the importance of obtaining the skills and education necessary to obtain higher-paying jobs.

Question 7

The economic theory of labor markets suggests that wages are determined by labor supply and labor demand.

Accepted Answer

In the economic theory of labor markets, wages are determined by the intersection of the supply and demand curves for labor. The quantity of labor supplied by workers and the quantity of labor demanded by firms determine the wage rate that workers receive.

Question 8

Which of the following factors affects the marginal productivity of a worker?

Accepted Answer

Marginal productivity of a worker is influenced by the worker's level of skill, knowledge, and experience, which are all components of human capital. The other options - disposable income, compensating wage differentials, and discrimination - do not directly impact a worker's productivity.

Question 9

A computer is an example of human capital.

Accepted Answer

A computer is a physical asset or machine and not a human capital, which refers to the knowledge, skills, and abilities of individuals that contribute to the productivity and economic value of an organization.

Question 10

Which of the following statements is not correct?

Accepted Answer

Differences in earnings between different groups alone do not necessarily provide clear evidence of discrimination. Various factors can contribute to these differences, such as differences in education, skill level, work experience, and occupation choices. While discrimination may be a factor in some cases, it is not always the sole or primary explanation for differences in wages.

Question 11

Why do economists study sports teams when looking for evidence of labor-market discrimination?

Accepted Answer

Economists study sports teams when looking for evidence of labor-market discrimination because the wide availability of performance statistics allows economists to control for individual player productivity in ways that are difficult to do for other types of firms. This allows economists to compare the salaries and opportunities of players of different races, genders, and nationalities and determine if there is evidence of discrimination.

Question 12

Higher levels of human capital are correlated with higher earnings because firms are willing to pay more for better-educated workers who have higher marginal productivities.

Accepted Answer

This is because workers with higher levels of human capital, such as education and training, are able to contribute more to the production process, leading to higher productivity and higher wages. Firms are willing to pay more for these workers as they can generate more revenue for the company.

Question 13

The human-capital theory of education maintains that workers who complete specific levels of education enhance their productivity through education.

Accepted Answer

The human-capital theory of education holds that education improves an individual's productivity and earnings potential by enhancing their knowledge, skills, and abilities. Thus, completing specific levels of education enables workers to increase their human capital, which in turn increases their productivity and earning potential.

Question 14

The fact that doctors are paid more than economics professors is an example of a compensating differential.

Accepted Answer

A compensating differential is a difference in wages that compensates workers for differences in job characteristics or work conditions. In this case, doctors may be paid more than economics professors because their job requires more years of education, longer working hours, and higher levels of stress and responsibility. Hence, their higher wage compensates them for these differences in job characteristics.

Question 15

A compensating differential is a difference in wages due to higher levels of education or other forms of human capital.

Accepted Answer

A compensating differential refers to the difference in wages that arises to compensate workers for non-monetary aspects of different jobs, such as risk, discomfort, or undesirable location, rather than differences in education or human capital.

Question 16

The competition experiment conducted by economists Muriel Niederle and Lise Vesterlund was consistent with the results of Terry Odean which were that

Accepted Answer

The competition experiment conducted by economists Muriel Niederle and Lise Vesterlund found that men were more likely to enter a competition than women, even when their abilities were similar. This is consistent with Terry Odean's findings that men trade stocks excessively while women prefer a buy-and-hold strategy. Therefore, choice C is the best answer. Choices A and B are incorrect because they do not relate to the experiment or Odean's study. Choice D is also incorrect because it pertains to a different historical context.

Question 17

John has financial assets totaling $1.5 million,and he plans to use these assets to start his own business.Since John owns these funds and will not need to borrow to start his business,these assets are considered human capital.

Accepted Answer

Financial assets are not considered human capital as they do not involve skills, knowledge or abilities possessed by an individual. Human capital refers to a person's education, experience, and skills that contribute to their ability to earn income.

Question 18

Education and on-the-job training are sources of human capital.

Accepted Answer

Education and on-the-job training are specific investments of time and resources that increase a person's knowledge and skills, which are components of human capital.

Question 19

A compensating differential refers to a difference in wages that arises from nonmonetary characteristics.

Accepted Answer

A compensating differential is a difference in wages paid to compensate for nonmonetary factors such as undesirable working conditions, risk of injury, or lack of job security.

Question 20

Human capital refers to the physical tools and equipment that workers use on their jobs to enhance their productivity.

Accepted Answer

Human capital refers to the knowledge, skills, and abilities that workers possess which enable them to perform their jobs effectively. It includes education, training, and experience, rather than physical tools and equipment.

Quiz 19: Earnings and Discrimination.