| 8252129588 | what benefits are typically considered to be part of an individual's return on his or her educational investment? | -higher future earnings
-increased job satisfaction over ones lifetime
-access to more challenging, interesting, or pleasant jobs
-greater appreciation of non-market activities and interests
-satisfaction that comes with being a more educated person
-psychic benefits that come from some of the more pleasant aspects of student life | | 0 |
| 8252204160 | what costs are typically considered to be associated with an individuals educational investment? | direct and indirect costs (and psychic losses) | | 1 |
| 8252229736 | direct costs include: | tuition costs, expenditures on books, and other supplies | | 2 |
| 8252236570 | indirect costs include: | opportunity cost of forgone salaries/income | | 3 |
| 8252253525 | psychic losses: | occur because learning is often difficult and tedious for some people | | 4 |
| 8252281989 | explain the difference between a direct and an indirect cost of education: | -a direct cost of education includes tuition costs, costs of books, and other supplies
-an indirect cost of education includes the forgone earnings during the time devoted to education | | 5 |
| 8252341694 | why do benefits that are received in the future have to be discounted? | people prefer now to later, in order for people to delay their present consumption they must be compensated with more money down the road | | 6 |
| 8252365003 | explain the concept of the internal rate of return: | -approach to evaluating educational investments
-under this method one solves for the discount rate that will just set the present value of the benefits equal to the present value of the costs, if this rate exceeds the discount rate required by the individual then the investment is considered to be worthwhile | | 7 |
| 8252921919 | explain how education provides a return due to both signaling and learning: | -signaling: I have the degree; is an indicator firms believe to be correlated with productivity
-learning: I have the experience; schooling can enhance the kinds of skills that pay off in the labor market | | 8 |
| 8252959357 | is the return to investment overstated or understated if education expenses also contain a consumption component? Explain: | understated; we are not ignoring the consumptive benefits of education | | 9 |
| 8253122683 | describe the "ability problem": | -suggests that the income differential may not be the result of an investment in education
-comparing the earnings of college graduates to high school graduates overstates the private benefit of education, College graduates were smarter to begin with, so they would have earned more money than the typical high school graduate even if they didn't go to college. | | 10 |
| 8253214641 | if more able individuals are more likely to invest in human capital, will the returns to education be overstated or understated? explain: | -to the extent that the higher earnings of college graduates reflect their greater ability rather than schooling, the rate of return to schooling is overstated | | 11 |
| 8253281898 | what is the college wage premium, and how has it changed over the last few decades? | -the difference between average earnings among those with a college (but no graduate) degree and those who do not attend college
-the premium fell in the 1970s for both men and women because the supply of college grads increased sharply because of all the baby boomers entering the labor market
-the premium increased after 1979 because skilled bias technology change-- higher educated workers were preferred | | 12 |
| 8253473781 | other than discrimination, why may women earn less in the labor market? | -age/earnings profiles for women are flatter than the ones for men
-women are over-represented in low-paying occupations and underrepresented in high-paying ones
-women average fewer (1% to 5%) hours of market work per week than men do in the same occupation---interruptions in the labor market attachment due to child-rearing | | 13 |
| 8253515340 | what is the difference between post-market and pre-market discrimination? | -pre-market discrimination: human capital discrimination that occurs before a person has entered the labor market
-post-market: any type of discrimination (wage, employment, & occupational) that occurs after a person has entered the labor market by actors within that market | | 14 |
| 8253613165 | describe what occupational segregation is, and how it contributes to differences in earnings: | -can be said to exist when the distribution of occupations within one demographic group is very different from the distribution in another
-with respect to gender, occupational segregation is reflected in there being female-dominated occupations and male-dominated ones
-occupational choices are directly limited or are influenced by lower payoffs to given human capital characteristics | | 15 |
| 8253884483 | define statistical discrimination: | occurs when in addition to using personal characteristics of the applicants, the average characteristics of the group are factored into the hiring decision even in the absence of personal prejudice | | 16 |
| 8253895978 | who is harmed by statistical discrimination? | a employers job applicants | | 17 |
| 8254007320 | what are the two parts in which we can decompose the gender wage gap? | -explained: education experience and background (2/3)
-unexplained: unknown (1/3) | | 18 |
| 8254009695 | what proportion of the gender wage gap can be explained by experience, industry, and occupation? | 89% | | 19 |
| 8254040636 | what groups are covered by the 1964 civil rights act? | -is a landmark civil rights and US labor law in the United States that outlaws discrimination based on race, color, religion, sex, or national origin.It prohibited unequal application of voter registration requirements, racial segregation in schools, employment, and public accommodations | | 20 |
| 8264363196 | the law of demand tells us that when the price of leisure (i.e. the wage) goes up, the quantity demanded of leisure: | goes down | | 21 |
| 8264376075 | we usually assume that workers want more leisure as their income goes up, this means that leisure is a ______ good | normal | | 22 |
| 8264404697 | what is the difference between a change on the intensive margin vs the extensive margin? | -a change on the extensive margin is the decision to take part in the labor force or not
-a change on the intensive margin is the decision regarding if you do take part in the labor market, how much do you take part? | | 23 |
| 8264436703 | describe what an indifference shows in our basic model: | all the possible combinations of leisure and income a person could attain that all yield the same level of utility | | 24 |
| 8264458422 | what two characteristics do indifference curves have that describe "well-behaved" preferences? | -negative slope
-convex to the origin | | 25 |
| 8264482610 | define marginal rate of substitution in the context of our income-leisure model: | it is the amount of income one must give up to gain another hour of leisure | | 26 |
| 8264595361 | explain in plain English what the convex shape of indifference curves mean: | -they are steeper at the left than at the right, this shape reflects the assumption that when money income is relatively high and leisure hours are relatively few, leisure is more highly valued than when leisure is abundant and income relatively scarce | | 27 |
| 8264711101 | what does the slope of the wage constraint tell us? | the wage rate for that person | | 28 |
| 8264739289 | what does the slope of the indifference curve tell us? | The magnitude of the slope of an indifference curve measures the marginal rate of substitution. That is, if the indifference curve is steep, then the marginal rate of substitution is high and a person would be willing to give up a very large amount of y to obtain very little of x. If the curve is flat, the marginal rate of substitution is low. The person is willing to give up very little of y to obtain large quantities of x | | 29 |
| 8264822404 | using a standard convex indifference curve: with high hours of leisure, individuals are willing to give up a _______ amount of income to get 1 more leisure hour | small | | 30 |
| 8264827213 | for a decrease in the wage, IE says you will work: | more | | 31 |
| 8264831186 | for a decrease in the wage, SE says you will work: | less | | 32 |
| 8264838807 | for a decrease in the wage, if SE>IE, the hours of work will: | decrease | | 33 |
| 8264846343 | for a decrease in the wage, if IE>SE, the hours of work will: | increase | | 34 |
| 8264859951 | for a given amount of leisure, whose marginal rate of substitution is higher? | the leisure lover | | 35 |
| 8264884564 | suppose that for a given bundle the marginal rate of substitution is bigger in magnitude than the wage rate, in order to choose an optimal bundle the worker should: | work fewer hours | | 36 |
| 8264927601 | suppose alex receives a raise in her hourly wage, and she decides she would like to increase her hours of work, does the income effect or the substitution effect dominate in this case? | substitution effect dominates | | 37 |
| 8264980941 | what is the equation that describes the optimal choice of a bundle of leisure and income in our model? | MRS | | 38 |
| 8265117724 | a wage increase creates a substitution effect, which leads the worker to want ______ leisure, and an income effect that leads the worker to want _____ leisure (assuming leisure is a normal good) | less; more | | 39 |
| 8265144259 | labor supply is the relationship between | wage rate & hours worked | | 40 |
| 8265294925 | in the context of supporting families with low income, what advantages does the EITC provide compared to policy that increases the minimum wage? explain in detail: | -the EITC is a subsidy payment that helps families with at least one worker, and since the subsidy goes only to those who work it is seen as an income maintenance program that preserves work incentives and is "refundable"
-policy that increases the minimum wage could end up benefiting those above the poverty line & increase the price of the program | | 41 |
| 8265376088 | what do empirical studies find out about how the EITC affects the labor supply of single mothers with low income? | it was said to be the driving force behind why so many more single mothers joined the work force during the 1990's | | 42 |
| 8265404229 | explain what a "thick" labor market is: | a market with lots of buyers and sellers | | 43 |
| 8265449509 | name any two U.S. cities that the new geography of jobs discusses at length as "innovation hubs": | Seattle, San Fransisco/San Jose region | | 44 |
| 8265472635 | workers from which one of the following education groups are the most mobile: | college | | 45 |
| 8265479268 | describe the concept of "knowledge spillovers": | is a phenomenon that occurs when information and knowledge that are collected and shared for a particular activity or project ultimately generates additional opportunities for application in other settings | | 46 |
| 8265496044 | the author of our book describes a "great divergence" across different areas in the U.S. list two things that are diverging, which the author explicitly discusses: | divorce rates, average salary of college educated and non college educated individuals, people mobility, politics | | 47 |
| 8265579170 | where are workers more likely to move around? | united states | | 48 |
| 8265593608 | according to our book, why do firms choose to locate in areas where office space and other costs are very high as opposed to cheaper places? | because they are choosing to locate in innovation hubs, places like silicon valley have very thick labor markets, specialized service providers, and a heavy concentration of venture capitalists... locating in these areas is said to be essential if you want to truly be successful | | 49 |
| 8265632545 | describe why it is so important for start-up firms to locate themselves geographically close to venture capitalists: | nowadays it is very important for venture capitalists to remain close to its investments to keep an eye on them and mentor them, if a start up firm is not geographically close to venture capitalists it may not receive the funding it truly needs | | 50 |
| 8265711318 | what are the two requirements for a person in the labor force to be officially classified as unemployed? | -actively look for job
-unable to find work | | 51 |
| 8265795299 | what two factors are responsible for determining a workers value to the firm? | -productivity
-marginal cost of labor | | 52 |
| 8266006979 | how are workers who have given up on trying to find a job classified by the bureau of labor statistics? | not included in the labor force | | 53 |
| 8266014570 | describe the difference between wages and earnings: | -wage is the amount paid for a unit time of labor
-earnings is wage times total time worked | | 54 |
| 8266033901 | describe the difference between earnings and total compensation: | -earnings is the salary amount made at a job
-total compensation includes earnings as well as other job benefits (insurance, etc) | | 55 |
| 8266076560 | when did manufacturing employment in the U.S. reach its peak? | 1978 | | 56 |
| 8266154268 | what are jobs in the non-traded sector? define the term and give two examples: | -such jobs are "non trade-able" because they cannot be exported outside the region where they are produced: you need to consume them where you produce them
-waiters, plumbers, nurses, teachers, real estate agents, hairdressers | | 57 |
| 8266289515 | explain how globalization benefits workers in the united states: | -this external threat has become an important driver of productivity gains for American companies and therefore economic growth
-globalization stimulates technical progress, which in turn increases the demand for educated workers | | 58 |
| 8266295804 | explain how globalization hurts some workers in the united states: | -found to cause rising local unemployment, decreased labor force participation, and lower local wages
-globalization stimulates technical progress, which in turn increases the demand for educated workers, but reduces the demand for unskilled workers | | 59 |
| 8266681321 | describe the multiplier effect in the context of job creation: | attracting a scientist or a software engineer to a city triggers a multiplier effect, increasing employment and salaries for those who provide local services | | 60 |
| 8266785980 | in our book, the author describes that innovation is driving growth in the united states economy. what does the author use as a proxy to measure how much innovation is taking place? | the growing number of patents | | 61 |
| 8266967838 | explain the scale effect of a wage change: | -higher wages imply higher costs, and usually higher product prices
-since consumers respond to higher prices by buying less, employers would tend to reduce their levels of output and employment | | 62 |
| 8267004314 | explain the substitution effect of a wage change: | -as wages rise employers have incentives to cut costs by adopting a technology that relies more on capital and less on labor, desired employment would fall
-as wages rise capital is substituted for labor in the production process | | 63 |
| 8267056903 | list the 4 hicks-marhsall determinants of labor demand elasticity: | -when the price elasticity of demand for the product being produced is higher
-when other factors of production can be more easily substituted for the category of labor
-when the supply of other factors of production is more highly elastic
-when the cost of employing the category of labor is a larger share of the total costs of production | | 64 |
| 8267144366 | after market wages increased from $10/hr to $10.50/hr, the total wage bill of a given company decreased, we can conclude that labor demand is: | elastic | | 65 |
| 8267177002 | what percentage of wages are collected as payroll taxes due to FICA (social security and medicare)? add both the employer and the employee share together: | the Social Security tax rate is 6.2%
The Medicare tax rate is 1.45% | | 66 |
| 8267183179 | why is the substitution effect present only in the long run? | capital is fixed in the short run | | 67 |
| 8267388767 | explain the impact of time on the own wage elasticity of labor demand: | we find that labor demand has become more elastic over time | | 68 |
| 8267400843 | are diminishing marginal returns to labor a short-run concept, or a long-run concept? | -Diminishing returns occur in the short run when one factor is fixed (e.g. capital)
-This law only applies in the short run because, in the long run, all factors are variable | | 69 |
| 8268181346 | describe how differences in education contribute to differences in earnings between african americans and whites: | -a considerable part of the wage gap can be explained by cognitive achievement
-black americans on average have lower test scores, which is associated with poorer-quality schooling and/or the influences of poverty on home and neighborhood characteristics | | 70 |
| 8271825692 | lower access to funds causes: | a higher i which then results in less education | | 71 |
| 8271834480 | due to discrimination: | lower rate of return yields lower incremental earnings in the future | | 72 |
| 8271879695 | explain "college premium": | the wage gap between those with high school and college educations---is the measure that labor economists use to track changes in labor market inequality, because it best captures the differences between the typical skilled worker and the typical unskilled worker | | 73 |
| 8271903763 | 2 ways to increase human capital in America: | dramatically improve the quality of education & import human capital from abroad | | 74 |
| 8272174374 | list the three types of unemployment that we use to further break down unemployment numbers: | -frictional
-structural
-cyclical (demand deficient) | | 75 |
| 8272256489 | to maximize profits: | the firm must adjust its labor and capital outputs so that the marginal cost of producing and added unit of output using labor is equal to the marginal cost of producing an added unit of output using capital | | 76 |
| 8272544537 | for an increase in the wage, IE says you will work: | less | | 77 |
| 8272545795 | for an increase in the wage, SE says you will work: | more | | 78 |
| 8272547424 | for an increase in the wage, if SE>IE the hours of work will: | rise | | 79 |
| 8272548604 | for an increase in the wage, if IE>SE the hours of work will: | fall | | 80 |
