Microeconomics Chp. 15

What theory would suggest that an employee should receive a wage higher than the equilibrium wage rate?

a. samaritan's dilemma
b. in-kind transfers
c. binding arbitration
d. occupational crowding
e. efficiency wage

When certain groups or classes are relegated to a narrow range of jobs in the economy, it is called


a. occupational formulation.
b. funneling.
c. occupational crowding.
d. occupational narrowing.
e. occupational hazard.

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. You would expect that these workers would earn a

a. high salary because they are in desirable geographic locations.
b. high salary because they have dangerous jobs.
c. low salary because they have dangerous jobs.
d. low salary because they have union jobs.
e. low salary because of tax credits for the poor.

The cost of education at an Ivy League university is more than $50,000 per year. At a community college, the cost of education is only a few thousand dollars per year. What economic theory could justify enrolling in an Ivy League school?


a. compensating differentials
b. life-cycle wage pattern
c. signal
d. human capital
e. income mobility

If Hanna were the chief economics planner in Mitchell, South Dakota, a rural location that boasts the world's largest corn palace, what would be her biggest challenge in encouraging economic development in terms of location?


a. If the location is deemed undesirable by employees, employers will have to pay higher wages.
b. If the location is deemed undesirable by employees, employers will have to pay lower wages.
c. Its location should have no effect on wages.
d. If the location has a low cost of living, employers will have to pay higher wages.
e. If the location has a high cost of living, employers will have to pay lower wages.

Someone might expect a fast-food job to pay a wage higher than the minimum wage because it


a. doesn't require a lot of education.
b. is safe.
c. is exciting and fast-paced.
d. is boring and an efficiency wage is offered to reduce turnover.
e. is not unionized.

The pay for journalists is quite varied. A top-tier journalist often receives a steady flow of assignments, such as two weekly columns, and so earns generous pay. A lower-tier journalist, however, often experiences sporadic work assignments with little to no pay. What economic theory explains this situation?


a. occupational crowding
b. compensating differentials
c. winner-take-all
d. in-kind transfers
e. efficiency wage

Which of the following factors does not lead to income inequality?


a. income mobility
b. discrimination
c. ability
d. wealth
e. corruption

Developed countries tend to have ________ in income inequality when compared to less developed countries.


a. lesser degrees
b. indeterminate differences
c. imperceptible levels
d. equivalent levels
e. greater degrees

Government programs that subsidize housing or Internet access are an example of


a. in-kind transfers.
b. income supplements.
c. in-cash transfers.
d. disposable income.
e. underground economies.

What differentiates the U.S. income inequality ratio from that found in less-developed countries?


a. In the United States, it is lower than that found in less-developed countries because the poor in the United States earn more than the poor in less-developed countries.
b. There is no significant difference between the inequality ratios in the United States and in less-developed countries.
c. It is higher than in less-developed countries due to the large number of poor people.
d. In less-developed countries, the inequality ratio is lower than in the United States due to the large number of rich people.
e. In the United States, it is lower than in less-developed countries due to corruption.

In the United States, there is a strong belief that anyone willing to work hard is able to become rich. This belief reflects which of the following theories?


a. income mobility
b. occupational crowding
c. compensating differential
d. efficiency wage
e. samaritan's dilemma

The poverty rate is calculated as the percentage of the population


a. who are not working.
b. whose incomes are above a poverty threshold.
c. who are not earning sufficient income from labor.
d. who are unable to pay their food and housing expenses.
e. whose incomes are below a poverty threshold.

Why is it unlikely that income inequality could ever be eliminated?


a. All workers are perfectly mobile.
b. All jobs are roughly equal in their attractiveness to workers.
c. Workers will always have the same skills, abilities, and productivities.
d. Workers all share the goal of earning as much income as possible.
e. Workers will always have different skills, abilities, and productivities.

Government job initiatives have been generally unsuccessful at reducing the poverty rate because they


a. do little to provide education and retraining.
b. discourage winner-take-all situations.
c. discourage in-kind transfers.
d. discourage the formation of unions.
e. discourage efficiency wages from being paid.

Which social welfare policy is most likely to produce unemployment?


a. Medicaid
b. Subsidized Nutritional Assistance Program (SNAP)
c. Supplemental Security Income (SSI)
d. minimum wage
e. Earned Income Tax Credit (EITC)