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PAGE 1288 ? Chapter 19/Earnings and Discrimination
Chapter 19/Earnings and Discrimination ? PAGE 1309
PAGE 1287
Chapter 19
Earnings and Discrimination
TRUE/FALSE
1. A compensating differential refers to a difference in wages that arises from nonmonetary characteristics.
ANS: T DIF: 2 REF: 19-1
NAT: Analytic LOC: Labor markets TOP: Compensating differentials
MSC: Definitional
2. A compensating differential is a difference in wages due to higher levels of education or other forms of human capital.
ANS: F DIF: 1 REF: 19-1
NAT: Analytic LOC: Labor markets TOP: Compensating differentials
MSC: Definitional
3. The fact that doctors are paid more than economics professors is an example of a compensating differential.
ANS: T DIF: 1 REF: 19-1
NAT: Analytic LOC: Labor markets TOP: Compensating differentials
MSC: Definitional
4. A computer is an example of productivity-enhancing human capital.
ANS: F DIF: 2 REF: 19-1
NAT: Analytic LOC: Labor markets TOP: Human capital
MSC: Definitional
5. 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.
ANS: T DIF: 2 REF: 19-1
NAT: Analytic LOC: Labor markets TOP: Human capital
MSC: Interpretive
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.
ANS: F DIF: 2 REF: 19-1
NAT: Analytic LOC: Labor markets TOP: Increasing value of skills
MSC: Interpretive
7. The rising gap in wages between unskilled and skilled workers is most likely related to a larger increase in demand for unskilled occupations relative to skilled occupations.
ANS: F DIF: 2 REF: 19-1
NAT: Analytic LOC: Labor markets TOP: Increasing value of skills
MSC: Interpretive
8. One hypothesis to explain the rising gap in wages between unskilled and skilled workers in the United States is that international trade has altered the relative demands f
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