Question 1

One frequently sees a strong relationship between median annual earnings and education level.What theory would suggest that education provides valuable skills?

Accepted Answer

A)  compensating differentials
B)  income mobility
C)  life-cycle wage pattern
D)  signal
E)  human capital

Question 2

What theory can explain why a CEO might earn so much more than other managers with similar experience and education at the same company?

Accepted Answer

A)  efficiency wage theory
B)  winner-take-all theory
C)  human capital theory
D)  samaritan's dilemma
E)  binding arbitration

Question 3

What are some of the causes of income inequality in the United States?

Accepted Answer

There are many causes of income inequali...

Question 4

My identical twin and I earn different levels of income despite having received the same educational degrees from the same institutions.What might be the causes of this difference in income?

Accepted Answer

The difference in income could be becaus...

Question 5

Income mobility represents the:

Accepted Answer

A)  inability of a worker to move to a job.
B)  inability of a worker to be trained and earn less.
C)  inability of a worker to be trained and earn more.
D)  ability of a worker to move to a job where she or he can earn the most.
E)  ability of a worker to move up or down the economic ladder.

Question 6

What theory would lead you to be suspicious of a job advertisement that reads: "Help Wanted! Fun and exciting job with excellent pay"?

Accepted Answer

A)  human capital
B)  life-cycle wage pattern
C)  winner-take-all
D)  compensating differentials
E)  efficiency wage theory

Question 7

What theory might partially explain why an ugly person might earn less than a beautiful person?

Accepted Answer

A)  winner-take-all
B)  compensating differential
C)  samaritan's dilemma
D)  occupational crowding
E)  efficiency wage

Question 8

As the mayor of a local town,I have the power to repeal workplace safety laws.How would repealing all workplace safety laws affect the wages of construction workers building the local school?

Accepted Answer

A)  It would reduce wages because of less severe negative compensating differentials.
B)  It would increase wages because of less severe negative compensating differentials.
C)  It would reduce wages because of more severe negative compensating differentials.
D)  It would increase wages because of more severe negative compensating differentials.
E)  It would have no affect on wages.

Question 9

As a male nurse,I often complain about the low pay I receive despite the fact that I have a significant amount of education.What economic theory explains my suppressed wage?

Accepted Answer

A)  compensating differential
B)  human capital
C)  winner-take-all
D)  occupational crowding
E)  efficiency wage

Question 10

What role does bargaining power in a unionized workplace have on the wage in comparison to the wage in a non-unionized workplace?

Accepted Answer

In a unionized workplace,the wages tend ...

Question 11

___________ occurs when those who collect welfare benefits are then discouraged from working.

Accepted Answer

A)  Income mobility
B)  Poverty threshold
C)  A samaritan's dilemma
D)  An in-kind transfer
E)  Winner-take-all

Question 12

The popular TV shows Ice Road Truckers and Ax Men portray workers engaged in dangerous jobs such as driving big trucks over ice and cutting down big trees.What would you expect the salary of these workers to be,and why?

Accepted Answer

A)  They would earn a low salary because of tax credits for the poor.
B)  They would earn a high salary because they are in desirable geographic locations.
C)  They would earn a high salary because they have dangerous jobs.
D)  They would earn a low salary because they have union jobs.
E)  They would earn a low salary because they have dangerous jobs.

Question 13

Use the accompanying table,which represents the distribution of income in the countries of Sweet and Sour,to answer the questions that follow.
 
-What is the degree of income inequality in Sour?

Accepted Answer

A)  .0075
B)  0.75
C)  7.5
D)  750
E)  7,500

Question 14

What theory can partially explain why pink-collar jobs,such as nurse and dental hygienist,earn so little despite the important services they provide?

Accepted Answer

A)  winner-take-all
B)  compensating differential
C)  samaritan's dilemma
D)  occupational crowding
E)  efficiency wage theory

Question 15

Briefly describe microcredit and the role it plays in a developing economy.

Accepted Answer

Microcredit represents a very small loan...

Question 16

After an extensive interview process,you have been offered a position with your dream company.If your goal is to maximize your annual salary,what advice emerges from compensating differential theory in terms of how you should handle the negotiation process?

Accepted Answer

In terms of compensating differential th...

Question 17

Nicole,a woman,is more educated and better trained than Tom,a male.Despite these differences in education and training,Tom still earns more because he is a coal miner,whereas Nicole is a secretary.Which model best explains the fact that Tom earns more than Nicole?

Accepted Answer

A)  the efficiency wage model
B)  the winner-take-all model
C)  the income mobility model
D)  the human capital model
E)  the model of compensating differentials

Question 18

Coal mining is a dangerous occupation.Which example correctly depicts the effects of new safety regulations on the negative compensating differential for the job of a coal miner?

Accepted Answer

A)  The passage of workplace safety laws at first increases but then decreases the severity of the negative compensating differential for such a job.
B)  The passage of workplace safety laws increases the severity of the negative compensating differentials for such a job.
C)  The passage of workplace safety laws decreases the severity of the negative compensating differentials for such a job.
D)  The passage of workplace safety laws at first decreases but then increases the severity of the negative compensating differentials for such a job.
E)  The passage of workplace safety laws has no effect on the compensating differentials for such a job.

Question 19

In recent decades,more women than men have received undergraduate degrees.Consequently,women's wages will:

Accepted Answer

A)  fall,according to compensating differential theory.
B)  increase,according to compensating differential theory.
C)  decrease,according to human capital theory.
D)  increase,according to human capital theory.
E)  decrease,according to efficiency wage theory.

Question 20

Using a compensating differential wage theory,why do some individuals earn more than others?

Accepted Answer

A)  Workers who earn more are more productive.
B)  Workers need to earn more to be willing to accept dangerous working conditions.
C)  Workers need to earn more to be willing to accept a safe indoor job.
D)  Workers who are more educated and better trained are able to earn more than the equilibrium wage.
E)  Workers who earn more tend to be concentrated in a single occupation.

Exam 15: Income,inequality,and Poverty

What theory can explain why a CEO might earn so much more than other managers with similar experience and education at the same company?

Correct AnswerverifiedShow Answer

Nicole,a woman,is more educated and better trained than Tom,a male.Despite these differences in education and training,Tom still earns more because he is a coal miner,whereas Nicole is a secretary.Which model best explains the fact that Tom earns more than Nicole?

Correct AnswerverifiedShow Answer

After an extensive interview process,you have been offered a position with your dream company.If your goal is to maximize your annual salary,what advice emerges from compensating differential theory in terms of how you should handle the negotiation process?

Correct AnswerverifiedIn terms of compensating differential th...View AnswerShow Answer

What are some of the causes of income inequality in the United States?

Correct AnswerverifiedThere are many causes of income inequali...View AnswerShow Answer

As the mayor of a local town,I have the power to repeal workplace safety laws.How would repealing all workplace safety laws affect the wages of construction workers building the local school?

Correct AnswerverifiedShow Answer

What theory might partially explain why an ugly person might earn less than a beautiful person?

Correct AnswerverifiedShow Answer

Use the accompanying table,which represents the distribution of income in the countries of Sweet and Sour,to answer the questions that follow. -What is the degree of income inequality in Sour?

Correct AnswerverifiedShow Answer

One frequently sees a strong relationship between median annual earnings and education level.What theory would suggest that education provides valuable skills?

Correct AnswerverifiedShow Answer

In recent decades,more women than men have received undergraduate degrees.Consequently,women's wages will:

Correct AnswerverifiedShow Answer

As a male nurse,I often complain about the low pay I receive despite the fact that I have a significant amount of education.What economic theory explains my suppressed wage?

Correct AnswerverifiedShow Answer

Briefly describe microcredit and the role it plays in a developing economy.

Correct AnswerverifiedMicrocredit represents a very small loan...View AnswerShow Answer

My identical twin and I earn different levels of income despite having received the same educational degrees from the same institutions.What might be the causes of this difference in income?

Correct AnswerverifiedThe difference in income could be becaus...View AnswerShow Answer

Using a compensating differential wage theory,why do some individuals earn more than others?

Correct AnswerverifiedShow Answer

The popular TV shows Ice Road Truckers and Ax Men portray workers engaged in dangerous jobs such as driving big trucks over ice and cutting down big trees.What would you expect the salary of these workers to be,and why?

Correct AnswerverifiedShow Answer

What theory can partially explain why pink-collar jobs,such as nurse and dental hygienist,earn so little despite the important services they provide?

Correct AnswerverifiedShow Answer

___________ occurs when those who collect welfare benefits are then discouraged from working.

Correct AnswerverifiedShow Answer

What theory would lead you to be suspicious of a job advertisement that reads: "Help Wanted! Fun and exciting job with excellent pay"?

Correct AnswerverifiedShow Answer

Income mobility represents the:

Correct AnswerverifiedShow Answer

What role does bargaining power in a unionized workplace have on the wage in comparison to the wage in a non-unionized workplace?

Correct AnswerverifiedIn a unionized workplace,the wages tend ...View AnswerShow Answer

Coal mining is a dangerous occupation.Which example correctly depicts the effects of new safety regulations on the negative compensating differential for the job of a coal miner?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
In terms of compensating differential th...
View Answer

Correct Answer
verified
There are many causes of income inequali...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Microcredit represents a very small loan...
View Answer

Correct Answer
verified
The difference in income could be becaus...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
In a unionized workplace,the wages tend ...
View Answer

Correct Answer
verified