Question 1

Studies of wages by labor economists indicate that measurable variables such as age, job characteristics, years of education, and years of experience account for

Accepted Answer

While measurable variables such as age, job characteristics, years of education, and years of experience do have some correlation with wages, they only account for some of the variation in wages in our economy. Other factors such as discrimination, supply and demand for certain skills, and negotiation abilities also play a role in determining wages.

Question 2

In empirical analyses of factors that help explain wages,

Accepted Answer

Empirical analyses of factors that help explain wages typically find that measurable factors (such as education, experience, and occupation) can explain less than half of the variation in wages. However, it is important to note that this does not necessarily mean that unmeasurable factors (such as effort and ability) do not contribute significantly to wage differences. It simply means that these factors are difficult to quantify and include in statistical models of wage determination.

Question 3

Hunter is an ambitious, competitive person who has always tried to be the best at everything he does. Consider the following job options facing Hunter and choose the option that will likely afford him the highest wage.

Accepted Answer

As a salesperson, Hunter will have the potential to earn a higher wage through commission on the sales he makes. This appeals to his competitive nature and ambition to do well. The other options either have fixed salaries or a limited work schedule, which may not be as financially rewarding in the long run.

Question 4

Certain factors that are probably important in determining wages are nevertheless difficult to measure. Consequently, labor economists find those factors difficult to incorporate into their studies of labor markets and wages. Those factors include

Accepted Answer

Effort and natural ability are subjective and difficult to measure factors that can influence wages. While years of experience and job characteristics can also play a role, they are more easily quantifiable and commonly included in labor market analyses. Race and job characteristics are important factors as well, but they are listed as a less likely option in this question.

Question 5

Which of the following is not an interpretation of the "beauty premium"?

Accepted Answer

The statement that beautiful workers are not willing to work for lower wages is not an interpretation of the "beauty premium." In fact, the beauty premium refers to the tendency for beautiful workers to earn higher wages than their less attractive counterparts, regardless of their willingness to work for lower wages. This is due to various other factors, such as discrimination or the perception that good looks reflect other valuable skills.

Question 6

A compensation scheme that pays salespeople a percentage of the sales they make is attempting to reward

Accepted Answer

A percentage of sales is directly tied to the amount of effort the salesperson puts into selling the product or service, making it a way to reward their work effort.

Question 7

Tom and Eric went to trade school at the same time. Each graduated with an associate's degree. They have received similar performance evaluations. Eric's employer is not a good business manager, and the sales manager lost a major deal. Because of the decrease in profits, the employees did not receive raises last year. Tom's employer is a savvy business manager and the sales manager is experienced and works hard. If Tom has higher earnings than Eric, the difference is most likely a function of

Accepted Answer

The answer of Tom and Eric went to trade school...

Question 8

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

Accepted Answer

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

Question 9

Which of the following helps to explain the differences in earnings in the United States?

Accepted Answer

The answer of Which of the following helps to explain...

Question 10

Economists have found evidence that differences in wages can be explained by

Accepted Answer

The statement is correct. Economists have found evidence that differences in wages can be explained by experience, job characteristics, and physical attractiveness.

Question 11

Christy and Claudia are aspiring models. Talent scouts consider them to be similarly beautiful. Both enter a talent show. Claudia contracts food poisoning the night before the competition and withdraws. Christy wins the competition and signs a multi-million dollar contract. The differences in their earnings likely reflect

Accepted Answer

The earnings difference between Christy and Claudia was due to chance, as Claudia's withdrawal from the competition was an uncontrollable factor that affected her earning potential.

Question 12

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.

Question 13

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

Accepted Answer

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

Question 14

Which of the following variables related to a worker's wage are the most difficult to measure?

Accepted Answer

Ability, effort, and chance are difficult to measure because they are subjective and can vary from person to person. Job characteristics, gender, race, geographic location, years of schooling, age, and years of experience are more objective and can be measured with more accuracy.

Question 15

Economists who study labor markets have documented

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 technological changes and globalization that have led to a greater demand for high-skilled workers and a decline in demand for low-skilled workers.

Question 16

In determining wages, ability, effort, and chance

Accepted Answer

Ability, effort, and chance all play a role in determining wages, but their importance is hard to accurately measure. It is difficult to distinguish between innate ability and effort, and chance factors such as luck or random events can impact success in the labor market. Therefore, while these factors may be influential in wage determination, their precise contribution is hard to quantify.

Question 17

Which of the following does not affect the wages a worker earns?

Accepted Answer

The answer of Which of the following does not affect...

Question 18

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. The other choices are not supported by the study's findings.

Question 19

Economists who study labor markets have discovered that

Accepted Answer

Economists who study labor markets have found that ability, effort, and chance all play significant roles in explaining wage differences. While ability can be difficult to measure, it is still an important determinant of earnings. Effort is even more difficult to measure, but it may still contribute to wage differences in some cases. And chance factors, such as luck or timing, can also impact earnings. Overall, a combination of these factors is likely to be responsible for most of the variation in wages seen in the labor market.

Question 20

Over the past several years, the earnings gap between high-skilled and low-skilled workers has widened because

Accepted Answer

The answer of Over the past several years, the earnings...

Quiz 19: Earnings and Discrimination