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Human Capital MCQs

Option A: has no impact on the human capital of workers?

Option B: increases human capital and the wages of workers

Option C: can make any worker into a superstar

Option D: only helps firms sort workers into high ability and low-ability workers.

Correct Answer: increases human capital and the wages of workers


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Option A: can make any worker into a superstar

Option B: increases human capital and the wages of workers

Option C: only helps firms sort workers into high ability and low-ability workers

Option D: reduces the wage gap between high-skill and low-skill workers.

Correct Answer: only helps firms sort workers into high ability and low-ability workers


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Option A: unpleasant

Option B: all these answers

Option C: safe

Option D: fun

Correct Answer: unpleasant


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Option A: Attractive people tend to earn less because attractive people are viewed as shallow and more self-absorbed and therefore, as less productive

Option B: Attractive people tend to earn more because they may actually have a larger value of marginal product

Option C: Attractive people tend to earn more because attractive people usually have greater human capital

Option D: Attractive people tend to earn less because attractive people usually have less human capital

Correct Answer: Attractive people tend to earn more because they may actually have a larger value of marginal product


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Option A: the best professor

Option B: the best writer

Option C: All of these answers participate in markets that could generate a superstar

Option D: The best accountant

Correct Answer: the best writer


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Option A: It must be involved in professional athletics

Option B: Every customer must be indifferent to the price they pay, and the seller must be a competitor in the market for the product

Option C: Every customer must be willing to pay an enormous amount for the product and the product must be a necessity

Option D: Every customer must want the good supplied by the best producer and the technology must exist for the best producer to supply every customer at low cost

Correct Answer: Every customer must want the good supplied by the best producer and the technology must exist for the best producer to supply every customer at low cost


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Option A: Increase labor market discrimination because some workers can charge more for their services than other workers in a competitive market

Option B: have no impact on labour market discrimination

Option C: reduce labour market discrimination because non-discrimination firms will employ cheaper labour earn more profits and drive discriminating firms out of the market

Option D: increase labour market discrimination because bigoted employers can charge any price they want in a competitive market to cover the cost of their discrimination

Correct Answer: reduce labour market discrimination because non-discrimination firms will employ cheaper labour earn more profits and drive discriminating firms out of the market


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Option A: minimum-wage laws

Option B: efficiency wages

Option C: unions

Option D: beauty

Correct Answer: beauty


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Option A: Men have more human capital than women

Option B: Employers in competitive markets are bigots

Option C: Men have more job experience than women

Option D: None of the above

Correct Answer: Employers in competitive markets are bigots


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Option A: marginal revenue, marginal cost

Option B: long run marginal revenue, long run marginal cost

Option C: labor output ratio, capital output ratio

Option D: marginal cost of labor, marginal revenue product

Correct Answer: marginal cost of labor, marginal revenue product


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Option A: footballers give more entertainment

Option B: lecturers are lazy

Option C: the labor markets are imperfect

Option D: top footballers are relatively scarce in relation to lecturers

Correct Answer: top footballers are relatively scarce in relation to lecturers


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Option A: there are too few teachers

Option B: too few student places in higher education

Option C: it is costly to acquire human capital

Option D: teachers’ salaries are too low

Correct Answer: it is costly to acquire human capital


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Option A: increase the wage, increase employment

Option B: maintain the wage, increase employment

Option C: increase the wage, lower employment

Option D: maintain the wage, lower employment

Correct Answer: increase the wage, lower employment


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Option A: will not work at the offered wage

Option B: would work at the going wage but can’t find jobs

Option C: will not work because the hours are anti-social

Option D: Are not prepared to move house to get the job

Correct Answer: B. would work at the going wage but can’t find jobs


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Option A: depreciation of the existing capital stock

Option B: productive investment

Option C: dwellings

Option D: inventories

Correct Answer: depreciation of the existing capital stock


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Option A: its scrap values

Option B: its depreciation

Option C: the present value of the future stream of income it can earn

Option D: the cost of loans

Correct Answer: the present value of the future stream of income it can earn


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Option A: encourage the use of more capital in the long run, reduce demand for all inputs

Option B: encourage the use of more capital increase demand for all inputs

Option C: encourage the use of less capital reduce demand for all inputs

Option D: encourage the use of less capital, reduce demand for all inputs

Correct Answer: encourage the use of less capital reduce demand for all inputs


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Option A: wage differentials, skill levels

Option B: technology, the ease of factor substitution

Option C: government grants, international competition

Option D: patents, skill shortages

Correct Answer: technology, the ease of factor substitution


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Option A: employees

Option B: the population

Option C: the factors of production

Option D: the working population

Correct Answer: the factors of production


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Option A: housing gets priority

Option B: industry gets priority

Option C: farming gets priority

Option D: the equilibrium rental rate equilibrium total demand with supply

Correct Answer: the equilibrium rental rate equilibrium total demand with supply


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Option A: variable, technology

Option B: fixed, expectations

Option C: fixed, rental rate of capital

Option D: variable, interest rates

Correct Answer: fixed, rental rate of capital


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Option A: change in a company’s balance sheet when it acquires new plant

Option B: additional value of output from using more capital

Option C: change in company’s share price

Option D: changing value of the capital stock

Correct Answer: additional value of output from using more capital


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Option A: wage rate of capital

Option B: interest charges

Option C: marginal capital cost

Option D: rental rate for capital

Correct Answer: rental rate for capital


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Option A: low wages, employment

Option B: high wages, labor supply

Option C: high wages, productivity

Option D: high wages, employment

Correct Answer: high wages, productivity


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Option A: they tend to work in relatively unskilled jobs

Option B: educational disadvantage

Option C: firms are reluctant to invest in training

Option D: all of the above

Correct Answer: all of the above


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Option A: regional variation

Option B: unionization

Option C: relative danger

Option D: skills

Correct Answer: skills


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Option A: inelastic the demand for labour, they can restrict the supply of labour

Option B: members they have, aggressive they behave

Option C: the economy is growing, people prefer leisure

Option D: the productivity is growing vacancies exist

Correct Answer: inelastic the demand for labour, they can restrict the supply of labour


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Option A: course fees

Option B: course fees and living expenses

Option C: the earnings foregone

Option D: Course fees living expenses and textbook

Correct Answer: the earnings foregone


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Option A: the tools used by workers to enhance productivity

Option B: a person inherited ability

Option C: the stock of expertise accumulated by a worker

Option D: education

Correct Answer: the stock of expertise accumulated by a worker


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Option A: higher real wages

Option B: lower fixed costs of working

Option C: lower non-labour income

Option D: changes in tastes between leisure and work

Correct Answer: all of the above


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A. Supply of labor
B. Short-run demand curve for labor
C. marginal cost of labour
marginal revenue product of labor

Correct Answer: Short-run demand curve for labor


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Option A: increase; increase

Option B: increase; reduce

Option C: reduce; reduce

Option D: reduce; increase

Correct Answer: reduce; reduce


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Option A: One employee is more attractive than another

Option B: One employee is more educated than another

Option C: All of these answers generated

Option D: One employee works harder than another

Correct Answer: One employee is willing to work the nightshift while another is not.


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Option A: different preferences for the type of work they are willing to do

Option B: different levels of job experience

Option C: all of these answers are correct

Option D: different levels of education

Correct Answer: all of these answers are correct


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Option A: The existence of a wage differential among groups is strong evidence of discrimination in the labour market

Option B: Discrimination can only persist in a competitive labour market it customers are willing to pay to maintain the discriminatory practice or the government requires discrimination

Option C: Bigoted employers are the main source of a persistent discriminatory wage differential in a competitive market

Option D: Discrimination cannot exist in a competitive labor market

Correct Answer: Discrimination can only persist in a competitive labour market it customers are willing to pay to maintain the discriminatory practice or the government requires discrimination


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Option A: productivity

Option B: age

Option C: sex

Option D: race

Correct Answer: productivity


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Option A: decrease in the demand for unskilled workers because of increases in technology and increases in international trade

Option B: increase in the number of unskilled workers available due to immigration into the UK.

Option C: decrease in the demand for unskilled workers are more poorly educated

Option D: increase in the number of unskilled workers available because workers are more poorly educated

Correct Answer: decrease in the demand for unskilled workers because of increases in technology and increases in international trade


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Option A: women obtaining less human capital because they don’t plan to work continuously to the age of retirement

Option B: Women entering and leaving the labour force to care for children

Option C: customers preferring to deal with men

Option D: women preferring to work in pleasant clean safe work places

Correct Answer: all of these answers


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Option A: All of these answers could be source of a persistent discriminatory wage differential

Option B: the customer

Option C: the government

Option D: the employer

Correct Answer: the employer


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Option A: Working the night shift

Option B: working harder

Option C: more education

Option D: having a greater amount of natural ability

Correct Answer: doing a job that is fun


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Option A: education

Option B: experience

Option C: all of these answers are parts of a worker’s human capital

Option D: effort

Correct Answer: effort


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Option A: coal miners must have greater human capital than others

Option B: we have observed a compensating differential

Option C: coal miners must be more attractive than other workers

Option D: we have evidence of discrimination against workers outside the coal mine

Correct Answer: we have observed a compensating differential


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