Chapter19 - Chapter 19 Earnings and Discrimination M...

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Unformatted text preview: Chapter 19 Earnings and Discrimination M ULTIPLE C HOICE 1. The basic neoclassical theory of the labor market predicts that a. workers earn a wage equal to the value they contribute to the economy. b. wages are determined entirely by market demand. c. wages are determined entirely by market supply. d. workers are compensated according to their contribution to the social value of society. ANSWER: a. workers earn a wage equal to the value they contribute to the economy. TYPE: M DIFFICULTY: 2 SECTION: 19.1 2. When wage differentials are observed in competitive labor markets, the neoclassical theory of labor markets would predict a. market discrimination. b. that wages will converge over time. c. that wage differences reflect social status. d. a difference in the value of marginal product of labor. ANSWER: d. a difference in the value of marginal product of labor. TYPE: M DIFFICULTY: 2 SECTION: 19.1 3. Since a major league baseball player makes more money than a private preschool teacher we can conclude that a. society values the services of a major league baseball player more than the services of a private preschool teacher. b. a major league baseball player generates more revenue in the economy than a private preschool teacher. c. labor markets are generally inefficient and inequitable. d. None of the above are correct. ANSWER: b. a major league baseball player generates more revenue in the economy than a private preschool teacher. TYPE: M DIFFICULTY: 2 SECTION: 19.1 4. Shaquille ONeal, a famous basketball player, earns more than a university professor. The neoclassical theory of labor markets would suggest that a. university professors who want to be rich should play basketball. b. Shaquille ONeal is smarter than a university professor. c. Shaquille ONeal is the greatest basketball player of all time. d. Shaquille ONeal contributes more to the economy's production of goods and services than a university professor. ANSWER: d. Shaquille ONeal contributes more to the economy's production of goods and services than a university professor. TYPE: M DIFFICULTY: 2 SECTION: 19.1 5. When competitive labor markets are in equilibrium, the neoclassical theory of labor predicts that a. the distribution of wages across the economy will be "bell-shaped". b. the wage paid to each worker is equal to that workers marginal product of labor. c. each worker is paid the value of his/her marginal contribution to the economy....
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This note was uploaded on 10/22/2010 for the course BUSINESS BAIU09 taught by Professor Mr.ken during the Spring '10 term at American InterContinental University Dunwoody.

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Chapter19 - Chapter 19 Earnings and Discrimination M...

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