For each of the scenarios in the following table, indicate the most likely reason for the difference
Question:
Scenario | Differences in Human Capital | Compensating Differential | Differences in Natural Ability | Labor Unions | |
---|---|---|---|---|---|
Two security guards have the same amount of schooling and work experience, but earn different wages. One of them works for a prison and earns an annual wage of $52,000 per year. Another works for a museum and earns an annual wage of $31,000 per year. | |||||
Major league soccer players earn more than minor league soccer players. | |||||
A law firm hires Teresa, a recent graduate from law school, and pays her an annual wage of $40,000. It also hires Nick, a second-year law student, and pays him an annual wage of $30,000. Teresa and Nick were born in the same country, attended the same university, and studied in the same graduate program. |
2. Alternative explanations of wage disparities
Suppose that a professor of labor economics finds that one of their research subjects has earned significantly higher wages throughout their lifetime than would be predicted by standard measured variables. The economist also notes that each of the subject's job roles was linked to social connections established at their family's yacht club.
Which item from the following list most likely explains this individual's high earnings?
Effort
Efficiency wages
Chance
Compensating differentials
5. Discrimination in the labor market
The following table exhibits the name, gender, height, and minimum wage 10 people are willing to accept to work as human resource specialists at a large financial firm.
Name | Gender | Height | Minimum Wage |
---|---|---|---|
(Inches) | (Dollars per week) | ||
Eileen | F | 66 | $291 |
Susan | F | 66 | $315 |
Becky | F | 68 | $339 |
Raphael | M | 70 | $352 |
Alex | M | 70 | $376 |
Eileen | F | 66 | $400 |
Clancy | M | 71 | $413 |
Manuel | M | 70 | $437 |
Hubert | M | 63 | $450 |
Kate | F | 68 | $474 |
The lowest weekly wage that the financial firm can spend in order to hire five human resource specialists is $_______
.
Auditing A Business Risk Approach
ISBN: 978-0538476232
8th edition
Authors: Karla Johnstone, Audrey Gramling, Larry Rittenberg