Econ 371
Sample Exam 4

1. If a black woman is paid a lower wage than a similarly qualified and experienced man performing the same job at the same firm, then this is an example of:
a. wage discrimination
b. employment discrimination
c. occupational discrimination
d. human capital discrimination

2. Which of the following exemplifies occupational discrimination?
a. 97% of all secretaries are women
b. women secretaries make, on average, 40% of their boss’ pay while male secretaries average 50% of their boss’ pay
c. women secretaries average 12 years of education and obtain little on-the-job training; male secretaries average 12.5 years of education and usually qualify for advanced training programs
d. the unemployment rate for women secretaries is typically 2% higher than that for male secretaries

3. An employer whose discrimination coefficient approaches infinity:
a. refuses to hire any women or minorities regardless of the wage rate
b. does not discriminate against women or minorities
c. discriminates against women but not minorities
d. discriminates in favor of women and minorities

Questions 4 and 5 refer to the following diagram, in which W_b/W_w is the ratio of the black wage rate to the white wage rate:

4. The demand curve in the diagram eventually slopes downward because:
a. as the black/white wage ratio falls, more firms find it "too costly" to indulge their tastes for discrimination
b. as the black/white wage ratio rises, more firms find it "too costly" to indulge their tastes for discrimination
c. as the black/white wage ratio falls, firms find it "less costly" to indulge their tastes for discrimination
d. as the black/white wage ratio falls, firms will reduce their discrimination coefficients

5. The horizontal portion of the demand curve will be extended by an increase in the:
a. number of firms that discriminate
b. number of firms that do not discriminate
c. productivity of white workers
d. supply of black workers

6. Which one of the following is a true statement?
a. Female unemployment rates are approximately twice that of males, while blacks are not overly represented among the unemployed.
b. Women are overrepresented in blue collar jobs, and underrepresented in service and white-collar jobs
c. Blacks are overrepresented in the relatively low-paying blue-collar and service jobs, and underrepresented in the high-paying white-collar jobs
d. There is little or no evidence of human-capital discrimination in the U.S.

7. Discrimination:
a. redistributes national income but does not affect gross domestic product
b. does not redistribute national income and does not affect gross domestic product
c. redistributes national income and reduces gross domestic product
d. does not redistribute national income but does reduce gross domestic product

8. Critics of the "rational choice" argument contend that:
a. differences in earnings may be the result of freely-made schooling and occupational choices
b. differences in schooling and occupational choices are caused by discrimination
c. wage differentials may be due to nondiscriminatory factors
d. sexual harassment and discrimination do not affect occupational choices

9. Empirical estimates of the extent of discrimination may be downwardly biased if:
a. certain variables which have a positive effect on productivity are omitted from the study
b. certain variables which have a negative effect on productivity are omitted from the study
c. many of the control variables (such as education or occupation) reflect personal choices
d. all of the above

10. Which of the following required equal treatment for all persons in hiring, firing, promotion and compensation decisions?
a. Equal Pay Act of 1963
b. Civil Rights Act of 1964
c. A 1968 Executive Order
d. Landrum-Griffin Act of 1959

11. Which one of the following views of the labor market best represents the views of proponents of comparable worth?
a. Labor markets are competitive
b. Wage rates reflect marginal products
c. Market wages are distorted by unions, statistical discrimination, and imperfect information
d. Policies aimed to aid disadvantaged groups often do not aid such groups

12. The Wagner Act (1935) did all of the following except:
a)  declare "yellow-dog contracts" illegal.
b)  guarantee labor the right to collective bargaining.
c)  define unfair labor practices by management.
d)  create the National Labor Relations Board.

13. Under which of the following sets of conditions will a union be able to achieve a wage increase at the smallest employment cost?
a) product demand is stable and firms find it easy to substitute other resources for union labor.
b) product demand is growing and firms can easily subcontract with non-union firms to handle the growth in demand.
c) product demand is stable and firms find it difficult to substitute other resources for union labor.
d) product demand is growing and firms find it difficult to substitute other resources for union labor.

14. Which of the following statements about union objectives is true?
a)  unions care only about wages and employment, so deriving an objective function for unions is simple.
b)  unions have historically focused on wage gains to the exclusion of other factors, so a theory which assumes that wage growth is the sole union objective is likely to be accurate.
c)  unions have multiple objectives, so developing a clear notion of the union's objective function is likely to be difficult.
d)  unions have historically focused on protecting the employment of union members, so a theory which assumes that employment security is the sole union objective is likely to be accurate.
e)  unions care only about seeing Hillary Clinton elected President.

15. In the median voter model of union bargaining, a necessary condition for a union to agree to a wage concession is that:
a)  the median member not be eligible for supplemental unemployment benefits if a concession is not given.
b)  all the members of the union be threatened with unemployment if a concession is not given.
c)  the median member be threatened with unemployment if a concession is not given.
d)  the union membership be convinced that management is simply hopping on the concession bandwagon.

16. A union's bargaining power will most likely increase if:
a)  it increases its wage demand.
b)  it threatens to strike.
c)  management threatens a lockout.
d)  management reduces its wage offer.

17. According to the collective voice theory:
a)  unions increase productivity by forcing management to be more efficient.
b)  unions hurt productivity by making it more difficult for firms to fire workers.
c)  unions help productivity by reducing the turnover rate among workers.
d)  unions increase productivity by giving greater voice to the preferences of the average worker rather than the marginal worker.

18. Which one of the following might be expected to increase relative union membership?
a) increased labor force participation by youth and women.
b) increased imports of manufactured goods.
c) increased substitution of capital for labor in the production process.
d) cutbacks in government programs such as unemployment insurance, affirmative action, and health and safety regulation.