Question 1

An "international trade" hypothesis has been advanced as an explanation for the widening earnings gap between skilled and unskilled workers in the United States.This hypothesis asserts that,when international trade expands,the domestic demand for skilled labor
A)rises, and the domestic demand for unskilled labor also rises.
B)rises, and the domestic demand for unskilled labor falls.
C)falls, and the domestic demand for unskilled labor rises.
D)falls, and the domestic demand for unskilled labor also falls.

Accepted Answer

According to the international trade hypothesis, when international trade expands, the demand for skilled labor rises while the demand for unskilled labor falls. This is because international trade typically involves the exchange of goods and services that require more advanced technology and higher skill levels, such as computer programming or engineering, while less skilled tasks, such as manufacturing or assembly, are outsourced to countries with lower labor costs. As a result, the wages of skilled workers rise relative to those of unskilled workers, leading to a widening earnings gap between the two groups.

Question 2

Workers whose skills become obsolete as a result of technological change are often paid a lower wage as a result of
A)natural ability.
B)geographic location of employment.
C)chance.
D)work effort.

Accepted Answer

The answer of Workers whose skills become obsolete as a...

Question 3

In recent years,the amount of international trade in which the United States engages has
A)increased, altering the demand for skilled and unskilled labor.
B)decreased a little, altering the demand for skilled and unskilled labor.
C)decreased substantially, altering the demand for skilled and unskilled labor.
D)remained fairly constant; thus, the demand for skilled and unskilled labor is unchanged.

Accepted Answer

The first sentence of the passage states that "In recent years, the amount of international trade in which the United States engages has increased." Therefore, the demand for skilled and unskilled labor has been altered as a result of the increase in international trade.

Question 4

The statement "the rich get richer and the poor get poorer" is evident in the fact that
A)the earnings gap between high-skill jobs and low-skill jobs has increased over the last several years.
B)developing countries do not pay workers the value of their marginal product.
C)developed economies export high-skill jobs to developing countries.
D)All of the above are correct.

Accepted Answer

The statement "the rich get richer and the poor get poorer" is supported by the fact that the earnings gap between high-skill jobs and low-skill jobs has increased over the last several years. This means that those who have high-skill jobs are earning more and increasing their wealth, while those with low-skill jobs are earning less and struggling to make ends meet. The other options may contribute to income inequality, but they are not directly related to the statement.

Question 5

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers offer two main hypotheses:
A)One hypothesis emphasizes education, and the other emphasizes random influences.
B)One hypothesis emphasizes education, and the other emphasizes supply and demand.
C)One hypothesis emphasizes international trade, and the other emphasizes technology.
D)One hypothesis emphasizes signaling, and the other emphasizes education.

Accepted Answer

The answer of Economists who attempt to explain the increasing...

Question 6

Which of the following scenarios would serve to decrease the demand for unskilled labor in our country?
A)increased productivity gains among the unskilled laborers
B)increased demand for goods produced by unskilled labor
C)increased international trade with countries where unskilled labor is more plentiful
D)increased supply of migrant workers

Accepted Answer

Increased international trade with countries where unskilled labor is more plentiful would increase competition for unskilled labor in our country, leading to a decrease in demand.

Question 7

Business firms that pay salespeople a percentage of the sales they make are attempting to reward
A)work effort.
B)loyalty to the firm.
C)years of schooling.
D)years of experience.

Accepted Answer

Paying salespeople a percentage of the sales they make is an example of a commission-based compensation plan, which is designed to motivate and reward work effort. The more successful a salesperson is in generating sales, the more they will earn in commissions. This type of compensation plan is commonly used in sales-intensive industries like real estate, financial services, and retail.

Question 8

The difference in wages paid to major-league baseball players and minor-league baseball players is most likely due to
A)chance.
B)natural ability.
C)the fact that the players' union is strong.
D)a compensating differential.

Accepted Answer

The answer of The difference in wages paid to major-league...

Question 9

In recent years,the amount of international trade in which the United States engages has increased.Which of the following accurately describes the effect(s)on labor demanded by firms in the United States?
A)The demand for both skilled and unskilled labor has increased.
B)The demand for both skilled and unskilled labor has decreased.
C)The demand for skilled labor relative to unskilled labor has risen.
D)The demand for unskilled labor relative to skilled labor has risen.

Accepted Answer

The increase in international trade has led to an increase in the demand for skilled labor relative to unskilled labor. This is because international trade tends to focus on goods that require greater levels of skill to produce and sell in foreign markets. As a result, firms in the United States have had to increase their use of skilled labor to remain competitive in international markets. However, this does not necessarily mean that the demand for unskilled labor has decreased, as there are still many goods and services that require unskilled labor to produce.

Question 10

If unskilled labor is relatively plentiful and cheap in many foreign countries,then as the United States expands its trade with these foreign countries,the domestic demand for
A)unskilled labor will rise and skilled labor will fall.
B)skilled labor will rise and unskilled labor will fall.
C)both skilled and unskilled labor will rise proportionately.
D)both skilled and unskilled labor will be unaffected, assuming no barriers to free trade.

Accepted Answer

As the US expands its trade with foreign countries where unskilled labor is cheap and plentiful, there will be a greater demand for skilled labor in the US to manage and innovate in this global economy, and a lower demand for unskilled labor which can be easily outsourced to these foreign countries. Therefore, skilled labor will rise and unskilled labor will fall in demand domestically.

Question 11

A "technology" hypothesis has been advanced as an explanation for the widening earnings gap between skilled and unskilled workers in the United States.This hypothesis emphasizes the likelihood that technological advances have
A)increased the supply of both skilled and unskilled workers.
B)increased the supply of skilled workers and decreased the supply of unskilled workers.
C)increased the demand for skilled workers and decreased the demand for unskilled workers.
D)decreased the demand for both skilled and unskilled workers.

Accepted Answer

The "technology" hypothesis suggests that technological advances have increased the demand for skilled workers and decreased the demand for unskilled workers, leading to a widening earnings gap between the two groups.

Question 12

Economists who study labor markets have documented
A)a general decline in the wages of college graduates over the last decade.
B)an increasing trend in U.S.labor markets for employers to pay all costs of education and training.
C)a decrease in the earnings gap between low-skill and high-skill workers over the past two decades.
D)an increase in the earnings gap between low-skill and high-skill workers over the past two decades.

Accepted Answer

Economists who study labor markets have documented an increase in the earnings gap between low-skill and high-skill workers over the past two decades. This is due to the demand for highly skilled workers increasing while the demand for low-skilled workers has decreased. As a result, wages for high-skilled workers have increased, while wages for low-skilled workers have remained stagnant or decreased.

Question 13

Which of the following explains the widening earnings gap between skilled and unskilled workers in the United States?
A)International trade has altered the relative demand for skilled and unskilled labor.
B)Changes in technology have altered the relative demand for skilled and unskilled labor.
C)Both a and b are correct.
D)None of the above is correct.

Accepted Answer

Both international trade and changes in technology have contributed to the widening earnings gap between skilled and unskilled workers in the United States. International trade has increased demand for skilled workers in industries that require a higher level of education and training, while technology has replaced many unskilled jobs with automation and machinery, reducing the demand for those workers. As a result, skilled workers are in higher demand and earn higher wages, while unskilled workers have fewer job opportunities and lower wages.

Question 14

Economists who study labor markets have discovered that
A)only about 5 percent of wage differences are related to chance.
B)ability is not difficult to measure but is largely insignificant in explaining wage differences.
C)work effort is difficult to measure but is not likely to contribute much to an explanation of wage differences.
D)ability, effort, and chance are likely to be significant contributors to wage differences.

Accepted Answer

Economists have found that the factors contributing to wage differences include ability (which can be difficult to measure), effort (which is also difficult to measure but is likely to have an impact), and chance (which may play a role in some cases). Therefore, all three factors are likely to be significant contributors to wage differences in labor markets.

Question 15

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers in the United States offer two main hypotheses.Both hypotheses
A)suggest that demand and supply conditions have played a less important role in determining workers' wages in recent years.
B)suggest that, over time, the demand for skilled labor has risen relative to the demand for unskilled labor.
C)emphasize the shrinking importance of international trade in recent years.
D)emphasize the growing importance of women and teenagers in the workforce in recent years.

Accepted Answer

The two main hypotheses for the increasing earnings gap between skilled and unskilled workers in the United States suggest that over time, the demand for skilled labor has risen relative to the demand for unskilled labor. They do not suggest that demand and supply conditions have played a less important role in determining workers' wages in recent years. They also do not emphasize the shrinking importance of international trade or the growing importance of women and teenagers in the workforce in recent years.

Question 16

Economists have proposed which of the following hypotheses to explain the rising wage gap between skilled and unskilled workers? (i)	increases in the role of unions in setting skilled wage scales
(ii)	increasing international trade
(iii)	technological change
A)(i) and (iii) only
B)(ii) and (iii) only
C)(i) and (ii) only
D)(iii) only

Accepted Answer

Increasing international trade and technological change have both been proposed as hypotheses to explain the rising wage gap between skilled and unskilled workers. The role of unions may also play a role in setting skilled wage scales, but it is not as widely supported as the other two hypotheses. Therefore, option B, (ii) and (iii) only, is the best choice.

Question 17

Workers with more human capital on average earn substantially higher pay than workers with less human capital in
A)most countries but not in the United States.
B)the United States but not in most other countries.
C)the United States and in most other countries.
D)None of the above is correct; the evidence fails to indicate that human capital is a significant factor in determining earnings anywhere in the world.

Accepted Answer

The statement is supported by extensive evidence that workers with more education and training tend to earn higher salaries across a wide range of countries, not just in the United States. This relationship between human capital and earnings is a fundamental concept in labor economics, and has been observed consistently in many different contexts.

Question 18

Over the last 20 years or so,the earnings gap between workers with college degrees and workers with high school degrees has
A)remained roughly constant for both men and women.
B)widened for both men and women.
C)widened for men and narrowed for women.
D)narrowed for men and widened for women.

Accepted Answer

The earnings gap between workers with college degrees and workers with high school degrees has widened for both men and women. This is due to a variety of factors, including automation and globalization leading to higher demand for skilled workers and lower demand for low-skilled workers.

Question 19

When computers are used to replace workers on a factory production line,the wage gap between skilled and unskilled workers
A)will increase only if the company can increase the price of its product.
B)is likely to increase.
C)is likely to decrease.
D)will not change.

Accepted Answer

When computers are used to replace workers on a factory production line, the demand for unskilled labor decreases which can cause a decrease in their wages. The skilled labor, however, may still be needed to operate and maintain the computers, therefore their wages may remain stable or even increase. This leads to a widening of the wage gap between skilled and unskilled workers.

Question 20

In the United States,the earnings gap between workers with college degrees and workers with high school degrees
A)has never been documented by reliable evidence.
B)is evident, but it has remained roughly constant over the past 20 years.
C)is evident, but it has diminished over the last 20 years.
D)is evident, and it has widened over the last 20 years.

Accepted Answer

The earnings gap between workers with college degrees and workers with high school degrees is evident and has widened over the last 20 years. According to a report by the Economic Policy Institute, in 2020, college graduates earned an average of 79% more than workers with only a high school diploma, up from 64% in 2001. This widening gap can be attributed to a variety of factors, including automation, globalization, and the increasing demand for highly skilled workers in the knowledge economy.

Quiz 19: Earnings and Discrimination

An "international trade" hypothesis has been advanced as an explanation for the widening earnings gap between skilled and unskilled workers in the United States.This hypothesis asserts that,when international trade expands,the domestic demand for skilled labor

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

In recent years,the amount of international trade in which the United States engages has

The statement "the rich get richer and the poor get poorer" is evident in the fact that

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers offer two main hypotheses:

Which of the following scenarios would serve to decrease the demand for unskilled labor in our country?

Business firms that pay salespeople a percentage of the sales they make are attempting to reward

The difference in wages paid to major-league baseball players and minor-league baseball players is most likely due to

In recent years,the amount of international trade in which the United States engages has increased.Which of the following accurately describes the effect(s) on labor demanded by firms in the United States?

If unskilled labor is relatively plentiful and cheap in many foreign countries,then as the United States expands its trade with these foreign countries,the domestic demand for

A "technology" hypothesis has been advanced as an explanation for the widening earnings gap between skilled and unskilled workers in the United States.This hypothesis emphasizes the likelihood that technological advances have

Economists who study labor markets have documented

Which of the following explains the widening earnings gap between skilled and unskilled workers in the United States?

Economists who study labor markets have discovered that

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers in the United States offer two main hypotheses.Both hypotheses

Economists have proposed which of the following hypotheses to explain the rising wage gap between skilled and unskilled workers? (i) increases in the role of unions in setting skilled wage scales (ii) increasing international trade (iii) technological change

Workers with more human capital on average earn substantially higher pay than workers with less human capital in

Over the last 20 years or so,the earnings gap between workers with college degrees and workers with high school degrees has

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

In the United States,the earnings gap between workers with college degrees and workers with high school degrees