Economics 101 Practice Test: Earnings and Discrimination | Practice Test / Quiz / MCQs

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Economics 101 Practice Test: Earnings and Discrimination

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Economic discrimination is a long-term economic inequality among people based on their gender, ethnicity, or color. It can also be defined as the difference in pay or wage rates for equally productive groups. Economic discrimination can include: job availability, wages, prices and/or availability of goods and services, and the amount of capital investment funding available to minorities for business. Economic discrimination can also include discrimination against workers, consumers, and minority-owned businesses. Earnings discrimination occurs when employees producing work of equal... Show more

Economic discrimination is a long-term economic inequality among people based on their gender, ethnicity, or color. It can also be defined as the difference in pay or wage rates for equally productive groups.

Economic discrimination can include: job availability, wages, prices and/or availability of goods and services, and the amount of capital investment funding available to minorities for business.
Economic discrimination can also include discrimination against workers, consumers, and minority-owned businesses.
Earnings discrimination occurs when employees producing work of equal value are differentially remunerated because of their social group.

Some examples of inequality include:
- Women and children with lack of access to healthcare
- Older persons, migrants, and refugees facing lack of opportunities and discrimination
- Discrimination based on religion, ethnicity, gender, and sexual preference

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Economics 101 Practice Test: Earnings and Discrimination

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1. What was the main reason the gender gap did not narrow during the post-war years?

all of theseEmployers were required to pay men more to do the same job women were doing.Women added more to marginal product than men.Many of the women who entered the labor force had not worked for quite some time and therefore lacked experience.

2. Students who are required to finish more schooling have been found to

be happier with their career choices.suffer from unemployment volatility.be more likely to feel the effects of minimum wage increases.earn a higher wage.

3. The signaling view of education is that it

always leads to high-wage jobs.signals natural ability.alters work ethic.enhances productivity.

4. The human capital view of education is that it

enhances productivity.can reduce job discrimination.will decrease job mobility.is a signal of natural intelligence or ability.

5. The issue of comparable worth is one in which

all workers should receive the same wages in an economy.workers with “comparable” education, experience, responsibility, and working conditions would be compensated at similar wage rates.all workers should be provided an opportunity to make a comparable contribution to the economy.markets are allowed to determine a worker’s rate of compensation.

6. Public schoolteachers are known to have low wages. This is likely to be partially explained by the fact that

many people perceive the job of public schoolteacher to have a high element of personal satisfaction.public schoolteachers are required to be college graduates.public schoolteachers need very little money to live.public schoolteacher jobs are easy.

7. A high-rise construction worker is typically paid a higher wage than a carpenter who builds residential housing primarily because

high-rise construction jobs are potentially more dangerous than carpenter jobs.carpenter jobs are perceived as fun and easy.carpenters are more likely to work a standard day shift where high-rise construction workers generally work at night.high-rise construction jobs require years of training while building residential housing requires no special training.

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

increased international trade with countries where unskilled labor is more plentifulincreased productivity gains among the unskilled laborersincreased demand for goods produced by unskilled laborincreased supply of migrant workers

9. Which of the following is a valid economic criticism of comparable worth?

Comparable worth distorts labor market signals, thereby creating labor surpluses and shortages.Women are less likely than men to be heads of households.Comparable worth may attract males into traditionally female-dominated occupations.There is no employment discrimination in the United States.

10. Empirical analysis of wage differences has found evidence

that the physical appearance of people in identical jobs is not likely to impact their wages.that suggests that physical appearance-related wage differentials among males are vastly different than differentials among females.of a direct correlation between wages and attractiveness.of a minor role played by omitted variables.

11. The fact that women are more likely to interrupt their careers to raise children reflects

further evidence that labor markets discriminate against women.a potential market-based reason why average wages for men exceed those for women.evidence that society under-values the role of women in the market place.evidence that markets are inefficient at allocating labor resources.

12. Factors which are likely to have influenced the declining gender wage gap include each of the following EXCEPT:

Fertility rates have fallen.Women are delaying marriage.Women are gaining more continuous work experience.Women are working jobs that have more favorable working conditions.

13. The statement “the rich get richer and the poor get poorer” is evident in the fact that

the poor must shoulder an increasing amount of the public debt.developed economies export high-skill jobs to developing countries.developing countries do not pay workers the value of their marginal product.the earnings gap between high-skill jobs and low-skill jobs has increased over the last several years.

14. By 1998, the earnings gap between both men and women college graduates in the United States and those with only a high school diploma increased to

85 percent for men and 40 percent for women.98 percent for men and 118 percent for women.118 percent for men and 98 percent for women.66 percent for men and 55 percent for women.

15. How does the theory of efficiency wages explain above-equilibrium wages?

Workers get a raise in wage when they prove they are increasing their productivity.Workers demand higher wages to compensate for poor fringe benefits.Employers give their workers a higher wage in the hopes that it will lead to increased productivity.Employers are forced to pay higher wages in efficient markets.

16. A recent law school graduate is considering two offers to practice law, one in California and one in Mississippi. Rumor has it that it is very difficult to pass the Mississippi bar exam and meet other certification requirements required by the Mississippi Attorney Association. Assuming all other things are equal, the attorney would expect

to make a lower wage in Mississippi.wages in California and Mississippi to be identical.to be unable to predict the wage difference between Mississippi and California.to make a higher wage in Mississippi.

17. Discriminatory hiring practices can be expected, even if markets are competitive, as a result of

a perfectly elastic market demand.lower costs of hiring.unrestricted entry and exit in markets.customer preferences.

18. Tiger Woods, a famous golfer, earns more than a university professor. The neoclassical theory of labor markets would suggest that

Sports are generally considered more important in an economy than education.Tiger Woods has received more formal education than a university professor.Tiger Woods and university professors each earn a wage equal to the value they contribute to the economy.Although many university professors play golf, it is just a hobby and not a profession.

19. Racial segregation of streetcars in the southern cities was largely opposed by

all of these.Sherman antitrust laws.streetcar firms.government officials.

20. Economists who study labor markets have discovered that

ability, effort, and chance are likely to be significant contributors to wage differences.only about 5 percent of wage differences are related to chance.work effort is difficult to measure, but is not likely to contribute much to an explanation of wage differences.ability is not difficult to measure, but is largely insignificant in explaining wage differences.

21. Studies have shown that nonunion workers earn about

40 to 50 percent more than union workers.40 to 50 percent less than union workers.10 to 20 percent less than union workers.10 to 20 percent more than union workers.

22. Economists are skeptical that discrimination is employer driven because

employers are profit maximizers.there is a cost advantage for the non-discriminating firm.if there is no difference in productivity, employers choose to hire the cheapest labor available.All of these are reasons.

23. Why do major league baseball players get paid more than minor league players?

The higher wage is often due to educational discrepancies.Playing in the major leagues is less pleasant than playing in the minor leagues.The higher wage reflects a compensating differential.Major league players are better athletes.

24. The idea behind signaling in education is that

most college graduates wouldn’t be half as productive if it were not for the years they spend in the classroom.education can turn an unproductive person into a productive person.many college graduates attended college in an attempt to land an “easier” job.more productive people are more inclined to educate themselves.

25. Wage differences that exist between well-educated workers and less-educated workers can be thought of as

a compensating differential for the cost of becoming educated.unfair by most economists.difficult to explain in a market economy.another form of discrimination in the labor market.

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