Why do workers with more human capital earn a higher wage than workers with less human capital quizlet?

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1. Social Science
2. Economics

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Terms in this set (38)

In the labor market for computer programmers, the labor demand represents
all the workers looking for a job.
the employers looking to hire programmers.
the workers looking for a job as a programmer.
all the employers looking to hire.

the employers looking to hire programmers

In a labor market graph, _____ is measured on the vertical axis, and _____ is measured on the horizontal axis.
product price; number of workers
wage; hours of labor
hours of labor; wage
number of workers; product price

wage; hours of labor

In a perfectly competitive labor market, employers will not pay less than the market wage because at a wage below the equilibrium
the equilibrium wage would rise.
they would be inundated with excess workers.
they would not be able to hire anyone.
there would be a surplus of workers.

they would not be able to hire anyone

The marginal revenue from hiring an additional worker is known as
labor marginal product.
marginal worker revenue.
labor marginal revenue.
marginal revenue product.

marginal revenue product

The marginal revenue product of labor is equal to:
MPL + P.
MR + Wage.
MPL × P.
MR × Wage.

MPL * P

Alena manages a small theme park. She hires one more custodian at $450 per week, and her park is cleaner and more attractive. As a result of this improvement, ticket sales rise by 40 tickets per week. Tickets sell for $12. Use the Rational Rule for Employers to determine if hiring the extra custodian was a good move.
No, it was a bad move because price did not rise as much as ticket sales.
Yes, it was a good move because it added more to revenue than to cost.
No, it was a bad move because it added more to cost than revenue.
Yes, it was a good move because the ticket sales rose more than price.

Yes, it was a good move because it added more to revenue than to cost.

The Rational Rule for Employers implies that they keep hiring until
the wage equals the marginal revenue product of the last worker hired.
marginal product equals marginal revenue.
the wage equals marginal product.
revenue equals cost.

the wage equals the marginal revenue product of the last worker hired.

Why does an employer's labor demand curve slope downward?
diminishing product demand
marginal cost adjustment
substitution rule
diminishing marginal product

diminishing marginal product

If the demand for Ono Yo's organic frozen yogurt increases, then the _____ Ono Yo's workers will _____.
demand for; hold steady
productivity of; rise
wages of; fall
marginal revenue product of; increase

marginal revenue product of; increase

If a company incurs expenses to start providing childcare at work so that employees can have lunch with their preschool children, the company's demand curve for labor will shift to the
right because workers will be more loyal.
right because employees are more expensive to the firm.
left because employees are more expensive to the firm.
left because workers will be more loyal.

left because employees are more expensive to the firm.

Consider the labor market, predict which of the following create an incentive for investment in capital?
Lower land prices
Lower wages
Higher wages
Higher capital prices

higher wages

The opportunity cost of working is
what you would have done during the time if you were not working.
the wage you earn for the time spent working.
what you can buy because you worked.
too high to even consider not working.

What you would have done during the time if you were not working

The Rational Rule for Workers is to work
one more hour as long as the wage exceeds the cost of necessities.
as long as there is a desire for more income that exceeds the loss of income from not working.
one more hour as long as the wage is at least as large as the marginal benefit of another hour of leisure.
as long as the marginal cost exceeds the marginal benefit.

One more hour as long as the wage is at least as large as the marginal benefit of another hour of leisure

The income effect measures
the impact of change in relative prices.
how people's choices change when they have more income.
how people's choices change when they have to work more.
the change in welfare when income rises.

How people's choices change when they have more income

The costs of working do NOT include
could have been bought with the income earned.
it would cost to buy a professional wardrobe if needed for the job.
could have been done with the time spent commuting.
could have been done during the time spent at work.

what could have been bought with the income earned.

Consideration of the benefits of choosing an occupation should NOT include
the amount you love the work.
salary or wage.
the trajectory of income over a career.
if you find it easy.

if you find it easy

The three key labor market decisions that you make do NOT include
how many workers to hire.
how many hours to work.
what kind of work to do.
whether to work.

how many workers to hire.

The labor supply curve for social workers will shift to the right when:
nonwage benefits increase for social workers.
the wages of all workers rise.
wages in other occupations rise.
the government increases benefits for those who are not working.

nonwage benefits increase for social workers.

The accumulated knowledge and skills that make a worker more productive are known as:
efficiency investment.
labor enhancement.
human capital.
labor factoring.

human capital

An efficiency wage is a:
higher wage paid to encourage greater worker productivity.
system of tying wage rates to overall factory efficiency rather than personal productivity.
higher wage paid to reward workers who show greater productivity.
wage that rises when workers invest in their human capital.

higher wage paid to encourage greater worker productivity.

When it is hard to monitor worker productivity, employers often pay:
a lower wage.
a higher wage.
a random wage.
a wage based on worker qualifications.

a higher wage

What impact has technology had on the difference between the income of the best engineers and that of good engineers?
It has had little impact on the gap in income.
It has eliminated the large gap that once existed.
It has decreased some of the gap in income.
It has increased the gap in income significantly.

It has increased the gap in income significantly.

Which of the following is a valid explanation of why a star movie actor earns many times more than a star Broadway actor?
In one evening, many more people can view a movie than can see a Broadway play.
Government regulations specify how much each type of actor earns.
Broadway actors are far less skilled than movie actors.
There is discrimination against Broadway actors but not against movie actors.

In one evening, many more people can view a movie than can see a Broadway play.

Compensating differentials lead to:
equal salaries for equal levels of human capital.
higher salaries for more unpleasant jobs.
lower salaries for more unpleasant jobs.
incomes based solely on productivity.

higher salaries for more unpleasant jobs.

Kaila wants her employer to pay her 20% more for making night deliveries in a high-crime neighborhood than the day delivery people receive. Most of the delivery people are willing to make night deliveries in the neighborhood for only a 10% differential. Kaila is seeking:
more than a compensating differential because she has greater concerns than most workers.
less than a compensating differential because she is asking for more than others are.
a compensating differential because others are undervaluing her concerns.
a compensating differential based on her individual concerns about the risks.

more than a compensating differential because she has greater concerns than most workers.

When the government requires that a person have a license to work in a particular occupation, then in the labor market for that occupation:
demand decreases.
demand increases.
supply decreases.
supply increases.

supply decreases.

What will happen in the labor market for aestheticians if the government deregulates the industry and no longer requires individuals to obtain a license to work as aestheticians?
The supply of workers will decrease, resulting in a higher wage and lower quantity of labor.
The supply of workers will increase, resulting in a lower wage and higher quantity of labor.
The demand for workers will decrease, resulting in a lower wage and lower quantity of labor.
The demand for workers will increase, resulting in a higher wage and higher quantity of labor.

The supply of workers will increase, resulting in a lower wage and higher quantity of labor.

Studies of the minimum wage indicate that minimum wage laws _____ employment opportunities for low-skilled workers, but there is less agreement regarding _____.
increase; whether wages rise or fall
reduce; the amount of the reduction
increase; the amount of the increase
reduce; whether wages rise or fall

reduce; the amount of the reduction

Unions are organizations that:
jointly represent a group of workers in negotiating with employers.
local governments sponsor to set work safety standards for employers.
represent employers in negotiating with employees.
enable groups of workers to start their own companies.

jointly represent a group of workers in negotiating with employers.

How does the pay of unionized workers compare with that of nonunionized workers in similar jobs, on average?
Unionized workers earn the same.
Unionized workers earn less.
Unionized workers earn more.
The average incomes are the same, but unionized workers' incomes vary far less.

Unionized workers earn more.

Which of the following is NOT true regarding discrimination in labor markets?
Discrimination may result in some workers being underpaid.
Any differences in wages between members of different racial or age groups is due to discrimination.
Differences in effort or bargaining power across groups can lead to differences in wages across groups.
Groups may differ in wages, due to differences in human capital or the types of jobs held.

Any differences in wages between members of different racial or age groups is due to discrimination.

The three sources of discrimination do NOT include:
prejudice.
statistical discrimination.
malevolent bias.
implicit bias.

malevolent bias.

A preconceived bias against a group that's not based on reason or experience is known as:
statistical discrimination.
implicit bias.
prejudice.
compensatory bias.

prejudice.

An employer who discriminates in hiring based on prejudice is likely to have higher costs than necessary because:
more productive workers may be forgone in order to hire less productive workers who have preferred characteristics.
all inputs will have higher prices as others shun the party who discriminates.
less productive workers may be forgone in order to hire more productive workers who have preferred characteristics.
the employer pays a higher wage to the group of workers discriminated against.

more productive workers may be forgone in order to hire less productive workers who have preferred characteristics.

Callie's firm uses a proprietary and complicated production process to ensure product quality. Her workers are carefully trained in this process as soon as they are hired. Callie thereby:
invests in job-specific skills.
ensures that all workers have the needed general skills.
raises production costs.
prevents employees from leaving the firm.

invests in job-specific skills.

Linking your workers' earnings to their performance is called:
differential performance.
pay-for-performance.
productivity bracketing.
incentivizing profit.

pay-for-performance.

Employees will be motivated to work hard and try to help their employer succeed if the company:
lives up to a core set of ideals that workers identify with.
provides compensating differentials.
uses carrots and sticks.
focuses on extrinsic rewards.

lives up to a core set of ideals that workers identify with.

How can a company's hiring manager attract workers who are motivated to advance in their field?
Provide training.
Provide a retirement savings plan.
Offer gym memberships.
Avoid discrimination.

provide training

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