Question

QUESTION 29

1. In practice, jobs are not exactly alike and can be located in very different places. When this happens, a compensating wage differential can be expected to arise to attract workers to the jobs with less desirable characteristics. Such a differential is in equilibrium when

   		all the workers are employed for the higher wage firm.
   		all the workers who are indifferent about the adverse conditions are employed at the firm offering the most adverse conditions.
   		each firm can obtain the quality and quantity of workers that it wants.
   		the wage rises enough so that the firm with the worst working conditions has an incentive to improve its conditions.

2 points   

QUESTION 30

1. With general training, the net productivity profile slope up because ________ over the worker's career.

   		training costs fall
   		productivity rises
   		training costs fall and productivity rises
   		labor exploitation falls

2 points   

QUESTION 31

1. A social norm against undercutting the prevailing wage may develop because

   		workers are concerned about the future level of wages
   		unions are likely to strike if wages fall too low.
   		unemployment insurance exists to protect unemployed workers
   		worker mobility is not perfect.

2 points   

QUESTION 32

1. If all jobs were exactly alike and located in the same place, an individual would tend to seek work at employers that

   		paid the highest wages.
   		had the most applicants.
   		had the fewest applicants.
   		had the most job openings.

Answer 1

29. each firm can obtain the quality and quantity of workers that it wants.

In compensating wage differential extra amount of income is offered to a worker he is prompted to undertake a given job which is undesirable.

30.  training costs fall and productivity rises.

This happens since over the time worker is imparted with the skills which enhance his productivity whereas training costs fall as he becomes more and more proficient while requiring less training.