ECON7100-M50 Spring 2015

Self-Study10

1. The existence of labor unions indicates that
   1. the income shares of capital and labor are subject to collective bargaining where labor commands choke power.
   2. there is a natural tendency for income to be fairly shared between capital and labor.
   3. Labor is happy with the market outcome of income distribution.
   4. workers trust their employers to be fair.
2. Globalization increases the bargaining power of the longshoremen because
   1. their jobs demand skills that are hard to find.
   2. they can easily find equally high-paid jobs in other industries.
   3. they are major shareholders of the cargo handling business.
   4. they can temporarily disrupt the free flow of globally traded goods.
3. People with low income often
   1. have abundant choices of healthy food.
   2. must pay higher prices of the same basket of food.
   3. eat more healthy food because healthy food is cheaper to buy and cook.
   4. have resources to hunt for bargain.
4. The preferences of consumers for superstars and hit mass products have contributed to
   1. too few people chasing the star dreams.
   2. the average income being lower than the median income.
   3. a more even distribution of income.
   4. the concentration of income at the top.
5. A company with a long career ladder
   1. provides more dead-end jobs than more specialized firms.
   2. will generally lower cost by doing everything in house.
   3. has fewer entry-level jobs.
   4. provides more opportunities for internal promotion through on-the-job training.
6. Low wage shares in global GDP are not sustainable because
   1. profit cannot be spent on what is not consumed.
   2. profit cannot be spent on consumption.
   3. wages are the only source of demand for output.
   4. there is not sufficient demand to absorb the total output.
7. If every job were paid the same, some jobs that require long and difficult training and are unpleasant would
   1. non-monetary rewards become unimportant.
   2. attract the least dedicated candidates.
   3. be over-subscribed.
   4. have to carry attractive non-monetary rewards.
8. When labor is scarce relative to capital, which of the following should be maximized?
   1. Output per unit of labor.
   2. Output per unit of labor and capital.
   3. Output per unit of capital.
   4. Output per unit of land.
9. Income by household would be more evenly distributed if people deliberately chose to
   1. marry across income groups.
   2. marry within groups of equal education.
   3. marry within income groups.
   4. marry across groups of different heights.
10. The family wage-gap between women without children and women with children might have
    1. led to a higher concentration of children born to less-educated women with lower opportunity costs.
    2. led to a higher concentration of children born to less-educated women with higher opportunity costs.
    3. encouraged highly educated women from having any (or as many) children as they otherwise would.
    4. encouraged career women to have children at a younger age.
11. The glamour discount can be measured by the gap between the _________ and the __________ of a profession.
    1. median income; average income
    2. top income; bottom income
    3. top 1% average income; bottom 1% average income
    4. gross income; net income
12. Offshoring and outsourcing of complete rungs of the intra-firm career ladder is conducive to
    1. higher labor costs when third-party suppliers are more efficient.
    2. shorter formal education for internal upward mobility for workers joining at the bottom of the top half if the bottom half is missing.
    3. dead-end jobs in specialized firms with short career ladders doing the outsourced bottom-rung jobs.
    4. upward job mobility within firms for workers joining at the very bottom if the middle section of the ladder is missing.
13. People's misperception of wealth distribution may have been influenced by
    1. widespread ownership of homes and consumer durables financed by credit.
    2. their desire to redistribute wealth.
    3. general dissatisfaction of their misperceived wealth distribution.
    4. careful study of available data.
14. The education attainment of parents can compound the life-chance advantage of their children because
    1. higher education is associated with lower divorce rate.
    2. their children benefit from single-mother parenting.
    3. their children are guaranteed admissions to good colleges.
    4. their children benefit from low-quality neighborhood schools.
15. Offshoring and outsourcing of complete rungs of the infra-firm career ladder is conducive to
    1. longer formal education for internal upward mobility for workers joining at the bottom of the top half if the bottom half is missing.
    2. upward job mobility within firms for workers joining at the very bottom if the middle section of the ladder is missing.
    3. higher labor costs if third-party suppliers are more efficient.
    4. fewer dead-end jobs in specialized firms with short career ladders doing the outsourced bottom-rung jobs.
16. Unpleasant jobs may not command a compensating differential if
    1. there is a strong labor union.
    2. there are fewer candidates with the low opportunity cost than there are unpleasant jobs available.
    3. demand for the products involved is very price elastic.
    4. demand for the products involved is very price inelastic.
17. When average income is increasing while median income is decreasing, income growth must have concentrated at the
    1. middle income groups.
    2. bottom income groups.
    3. Top and bottom income groups.
    4. top income groups.
18. As workers we prefer _________, but as consumers we prefer ____________.
    1. Low wages and high prices for us; high prices for us and high wages for other workers.
    2. High wages and low prices for us; low prices for us and high wages for other workers.
    3. High wages and low prices for us; low prices for us and low wages for other workers
    4. Low wages and high prices for us; low prices for us and high wages for other workers.
19. Those who gain from globalization
    1. owe their fortune to the willingness of the less fortunate to obstruct the movement.
    2. are less than eager to share their fortune with those who lose.
    3. are likely to be the ones who are re-trained from the old jobs.
    4. would do equally well even without globalization.
20. Economic efficiency leads naturally to
    1. A smaller but more fairly distributed pie.
    2. A bigger economic pie.
    3. A smaller economic pie.
    4. A fairer distribution of a bigger pie.