1. Consider a hedonic pricing model of education attainment. It is expected that
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Question
1. Consider a hedonic pricing model of education attainment. It is expected that indifference curves would be:
downward sloping because the quality of education has declined over time.
downward sloping because the marginal cost of providing education declines as years of education rises.
upward sloping because workers require additional compensation to make it worthwhile to acquire additional education.
upward sloping because education raises a worker's productivity.
2. In the United States over the last 30 years, wage differentials have
decreased for skilled workers but have increased for unskilled workers.
increased for all groups of workers.
increased for women but have narrowed for men.
narrowed for all groups of workers.
increased for skilled workers but have narrowed for unskilled workers.
3. Social mobility refers to:
the degree to which society dictates the wage distribution.
the ability for a worker to move up in a firm's hierarchy.
the ability for a worker to increase his or her human capital.
the link between the skills and income of parents and children.
the relationship between human capital and wages.
4. Which one of the following statements about the Gini coefficient is not true?
The Gini coefficient equals zero when there is perfect equality.
The Gini coefficient must fall when the amount of income in an economy increases.
The Gini coefficient reflects the data shown in the Lorenz curve.
The Gini coefficient equals one when there is perfect inequality.
E. The Gini coefficient increases as income inequality increases.
5. What is meant by the skill-bias technological explanation of increasing inequality?
There has been increasing inequality over the last 40 years because unskilled workers use no technology.
There has been increasing inequality over the last 40 years among high-skilled workers.
Inequality has increased because technological advances have not kept pace with the demand for education.
Inequality has increased because technological advances over the last 40 years have complemented the productivity of skilled labor relative to unskilled labor.
Inequality has increased because technological advances over the last 40 years have complemented the productivity of unskilled labor relative to foreign labor.
A.downward sloping because the quality of education has declined over time.
B.downward sloping because the marginal cost of providing education declines as years of education rises.
C.upward sloping because workers require additional compensation to make it worthwhile to acquire additional education.
D.upward sloping because education raises a worker's productivity.
Explanation / Answer
1.
C. Upward sloping because workers require additional compensation to make it worthwhile to acquire additional education.
Since educated workers tend to have additional compensation in comparison to uneducated workers.
2.
B. increased for all groups of workers.
Because in United States or last 30 years wage differentials have increase for skilled as well as unskilled workers.
3.
B. The ability for a worker to move up in a firm's hierarchy.
Because social mobility indicates a change in position within a social system.
4.
B. the Gini coefficient must fall when the amount of income in an economy increases.
5.
D. Inequality has increased because technological advances over the last 40 years have complemented the productivity of skilled labor relative to unskilled labor.
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