Economics Exam 2


EconomicsExam 2

Part1: Shortanswer sample questions


Sourceunit: Lecture 14, Gender differences

Theadvancements in technology have increased employment for men andwomen due to the positive impact of industrialization. Since the1860s, advancements in technology have increased the number ofindustries that could employ people, which reduced reliance onprimary industries to offer employment. Moreover, advancements intechnology increased production, which sparked the growth of tradethat expanded employment opportunities for people. In modern day,technological advancements have opened new opportunities for thetechnology geeks and elites to develop technological products andmanage others. The opportunities in the technology sectors representnew jobs being created by the advancements in technology.

Onthe other hand, technological advancements have led to the loss ofemployment for people who do not have technical know-how. Inaddition, technological advancements introduced machines thatreplaced workers, especially unskilled workers, leading to loss ofemployment. However, technological advancements introduced theconcept of skilled equality, where women with technological expertisecould be employed. Prior to technological advancements, women couldnot work in industries because of the manual nature of work. However,technological advancements opened employment opportunities for womenbecause of the introduction of more skilled labor jobs.


SourceUnit: Lecture 14, Gender differences

Technologicaladvancements have led to wage inequalities in wages since the use oftechnology in 1860s. Technology introduced more and more skilledlabor, which was compensated higher than unskilled labor. Unskilledlabor had dominated in the periods before the 1860s more skilledlabor was used with technology after 1860s. The payment for skilledemployees is higher than that of the unskilled labor. As a result,technology opened women to higher wages because of their ability togain technological skills needed for the skilled labor.

Onthe other hand, technology led to increase in the labor of men, astechnological advancements increased the output at work. Higheroutputs alongside reduced wastage led to higher incomes by employers,who increased wages for the employees.


Unit:Lecture 14, Gender differences and Net Present Value of Human CapitalInvestment

Thehuman capital model is the model that proposes determination of wagesbased on the value of human capital in terms of skills andprofessional attributes. To determine the wages, the model proposesthat workers should be paid based on the value they give the work, aspart of the human capital in the production process. Therefore, themodel fuels gender differences, because jobs taken by men tend to bemore valued than those of women. As a result, men tend to be paidhigher than women.


SourceUnit: Lecture 14 Net Present Value of Human Capital Investment

Unionsare organizations of workers and employees that look after theinterests of workers through negotiations with the employers. Theunions have led to the improvement of working conditions andcompensation for all the workers in the industry since the nineteenthcentury. Trade unions have led to the improvement of workingconditions of men, especially in the manual work of the factoriesduring the industrialization period.

Thelobbying and negotiations of trade unions have led to the improvedthe wages of workers since the nineteenth century. The efforts of thetrade unions seek to compel employers to increase the wages of bothmen and women. At the same time, trade unions have helped improveopportunities for women by lobbying for equal treatment of women atwork places.


SourceUnit: Minimum Wages

Thewage rate is the payment level of payments as wages or salaries toemployees in an economy. An increase in the wage rate means that thereturns for workers are higher than before. As a result, more peoplewill be willing to work at the new wage rates than before. As aresult, the supply of labor will increase. Both the individual supplyof labor and the aggregate supply of labor will increase due to therise in the number of willing workers.


Ld e1 Ls


We e

Ls Ld

0 LeL1LaborSupply

Inthe graph above, the LsLs is the supply curve for labor while LdLd isthe demand for labor, with point e as the equilibrium point. Atequilibrium, the market wage rate is We and while the supply of laboris at Le is the wage rate curve while the increases of wage rate fromWe to W1 will lead to an increase in the labor supplied from Le toL1.


SourceUnit: Lecture 14, Gender differences in Earnings

Thehuman capital investment is the economic concept that recognizes thevalue of labor can be improved through investing in the humanresources. The main aspects of investment in human capital in thiscase are training, experience, abilities and education. Therefore,higher investments in human capital translate to higher earnings ofthe employees. Any discrimination on gender in the investment onemployees will be translated into gender differences in earning amongemployees.

Thehuman capital investment explains the differences in the earningsthat results from the value imparted to employees. In most societies,men received a higher level of education and more training comparedto women. At the same time, men received an upper hand in gettingjobs than women. This gives men more experience and training thanwomen, which translated into more value invested in them than women.However, human capital investment concept does not consider thefactors that affect the differences in the value invested in thepeople.


SourceUnit: Lecture 14, Gender differences in Earnings

Additionalinvestments in human capital will include investing in the value ofthe labor through processes like training, education and experience.On the other hand, the purchase of a new car will involve additionalinvestment in human capital. To choose between the two, one of themain factors to consider is the impact on the production process. Thealternative with higher impact on the output of a firm or processwill be the most viable option.

Inaddition, the value addition to each of the two types of capital isan important factor to consider. Where an investment in human capitaladds value to the usage of the existing physical capital, thenadditional investment in labor is more viable. On the other hand, ifinvesting in physical capital will improve the performance of humancapital, then the investment in physical capital like the car is moreviable. However, human capital is more valuable than physical capitalin cases where human decisions are needed for operations and controlof premises.


SourceUnit: Lecture 14, Gender differences in Earnings

Differencesin wages in the labor market as mostly compensating wagedifferentials. In theory, a compensating wage differential is theequalization difference that exists between jobs because of the levelof risk, the unpleasantness or undesirability of a job. Jobs that areconsidered unpleasant or risky or undesirable tend to be avoided byworkers. As a result, they need more incentives in terms of higherwages, to attract workers to take them. Jobs considered to be morerisky and unpleasant are paid more than the less risky jobs, despitethe gender of workers who take them.

Therefore,in practice, compensating wage differentials cause the largest extentof wage differentials in terms of the gender earnings gap. Theunpleasant and most risky jobs tend to be taken up by the men, whilethe less risky and unpleasant jobs are given to women. As a result,men earn more that the women because of the compensating wagedifferentials existing between the jobs.


Sourceunit: Lecture 14, Gender differences in Earnings

Alsocalled pay equity or sex equity, comparable worth is the concept thatrecommends for equal compensation between men and women for the jobrequiring comparable efforts, responsibilities and skills. One of theadvantages of comparable worth is guidance on the compensation of allworkers, according to the skills needed for the job, and not based ontheir gender. In theory, comparable worth is a principle that canreduce the wage differential between men and women through equalcompensation.

However,the major disadvantage of comparable worth is the promotion of wagedifferences arising from the differences in the skills of the jobstaken by both the women and men. Jobs taken by women tend to beundervalued based on the skills, efforts and responsibility comparedto those taken by men. While there will be equality in payment ofboth women and men as per the job discrimination, higher paying jobsare taken up by men. This is because men take jobs that demand higherskills and technicalities, compared to women who may take relativelyless demanding jobs. Therefore, comparable worth legislation would domore harm than good.


SourceUnit: Lecture 14 and 20, Gender differences and Job Satisfaction

Thereare gender differences in the link between job satisfaction andgender equity at work. The gender differences in satisfaction arisebecause the perceived gender inequality at work leads to thedevelopment of dissatisfaction by the aggrieved gender andsatisfaction by the favored gender. Where there is equality betweenthe two genders, job satisfaction will be maintained at the samelevel because each employee will feel a sense of recognition andequality.

Inpractice, perceived gender inequality in sharing of employmentopportunities such as promotions and responsibilities leads todissatisfaction. If men are preferred to women in such opportunities,the satisfaction of the female employees will be reduces. On theother hand, if women are preferred, the level of satisfaction for menwill reduce. Gender differences in job satisfaction matter because itshows the level of inequality at work, and the extent it can affectthe productivity of labor as a factor of production.


Sourceunit: Lecture 21, gender differences in work ethic

Thereare gender differences in work ethics. Work ethics exist because ofthe differences between men and women in terms of the differentlevels of ethics and values. There are differences in the way workersconduct themselves at work, based on the gender differences invaluing work. In theory, women are considered to have a higher workethic compared to men. To measure this, employers look at the extentof compliance to the rules and cases of non-compliance.

Genderdifferences in the work ethics matter in a work environment becauseit helps employers to determine the right positions for either of thegender. While this results to gender discrimination, the concern forethics by employers is important for productivity. One of the factorsthat contribute to work ethics is the traditional roles of women andmen. Women were considered to be more ethical at work compared tomen. However, this is not the case in practice because work ethicsdepend on the value each employee`s place on the job.


Sourceunit: TitleIX

TitleIX is a federal law in the United States that comprehensivelyprohibits discrimination of people based on gender, in any activityor federally funded education program.One of the causes of Title IX was the ineffectiveness of the CivilRights Act of 1964 to prohibit gender discrimination in manyactivities in the united states. The provisions of Title IX weretherefore meant to align to the 1964 act, while strengthening theprohibition of discriminating people on gender. Another cause was theincreased discrimination against women in work employmentopportunities and in the sporting world, especially athletics.

Oneof the results of Title IX was an increase in the athleticopportunities for women. In 2006, it was reported that theparticipation of women in both college and high school athleticsincreased because of the impact of Title IX. In addition, Title IXresulted to increased educational opportunities for women. This isbecause Title IX did not originally focus on sports, but main oneducational opportunities. Moreover, Title IX led to increased equalrights for all, because it mirrored on the Civil Rights Act of 1964.


Sourceunit: Lecture 14 and 20, Gender differences and Job Satisfaction

Noncognitive traits are the skills that are not related to cognitiveabilities of a human being such as memory, attention and thoughtsystem. There is a very strong link between the performance ofworkers and their non-cognitive traits. In a workplace setting,non-cognitive skills include verbal and non-verbal skills, emotionalmaturity, interpersonal skills, empathy and communication amongothers. Workers with higher levels of the non-cognitive traitsperform higher than those who have less of the traits.

Non-cognitiveskills do not vary with gender. This is because non-cognitive skillsare based on the personality of a person, which is not determined bythe gender. The factors that influence the level of non-cognitiveskills of people are not aligned with gender. Instead, they are morealigned to the environment, people are exposed to, and personaldevelopment through human capital investment. For instance, highereducation and training on social skills or emotional intelligenceimproves the non-cognitive skills of communication and interpersonalabilities.


Sourceunit: Lecture 14, Gender differences and Job Satisfaction

Parttime employment emerges when the income received on full timeemployment is not enough to cater for the needs of the worker. At thesame time, part time employment arises when the employer has a jobthat is less than the time and efforts availed by the employee. Inthis case, the employer just wants partial, time and partial effortsby the employer, since the job to be done is less. As a result,part-time employment rises to the benefit of both the employer andthe employee. Part-time employment influences gender differences inemployment and wages because men are more available to work inpart-time jobs than women. This is because women are more committedto domestic chores than men are.



SourceUnit: Title IX

TitleIX is a federal law that outlaws discrimination of people on a genderbasis. Coming from the civil rights act of 1964, Title IX was enactedin theEducation Amendments of 1972to ensure equal opportunities for women in education and the collegeathletics. The cost for the provisions of Title IX was the alignmentto the 1964 act, while strengthening the prohibition ofdiscriminating people on gender.

Oneof the impacts Title IX is an increase in the admission of women incolleges and educational institutions. Women in athletics and collegesports increased due to the impact of Title IX. This led to anindirect benefit of increasing the level education of women. As aresult, more women were exposed to modern careers. As a result, therewas an increase in the number of skilled women professionals likenurses, lawyers and doctors among others.

Moreover,the benefit of Title IX is an increase in the number of women workersin the country, and opened opportunities for them. This is becauseTitle IX changed the stereotypes that existed before its enactmentabout the impossibilities of women. Title IX also led to increasewages for women who have accessed labor opportunities through theequality introduced by Title IX enactment. Women who participated insports and got higher education through them went on to earn higherwages in their careers.


SourceUnit: Gender differences and Minimum Wages

Minimumwage is a price floor set in the labor market in terms wages toensure that the lowest paid workers earn a decent income. The graphbelow presents the economic impact of minimum wages.







0 Q1 Qe Q2 Labor

Theforces of demand and supply determine the equilibrium wage rate ofWe, and labor supply determined at Qe. This is the wage that thelabor market can handle by clearing the labor market through theforces of supply and demand. Imposing a minimum rate at WMINcreates an excess supply of labor represented by Q2– Q1. As a result, the level of employment decreases from Qeto Q1.This has economic implications in the economy affected by the minimumwage WMIN.

Interms of gender differences, minimum wages cause the hiring ofemployees who can do more work and extend their working hours. Thisis because the setting of minimum wages increases the minimum cost ofproduction to the producers. As a result, producers seek to maintainthe same cost of production by reducing labor costs, such asincreasing the number of hours workers are engaged.Therefore,employers tend to discriminate against women as they think theycannot work more than the male workers.

Dueto the incremental cost of labor and production because of higherwages in terms of minimum wages, gender discrimination increases interms of laying off workers. Employers tend to lay off women morethan men workers because of the discriminatory perception that menare more productive. The employers do this as they seek to achievehigher production with the same labor cost of men workers, as itwould have been for women workers. This is because minimum wages leadto laying-off workers by employers who respond to the minimum wagesby restructuring capital. The increase in the cost of labor due toimposition of minimum wages leads to the employment of capitalintensive production, which reduced employment opportunities,especially for women.


SourceUnit: Lecture 14, Gender Differences

Employmentis the hiring of workers who are willing and able to work. Genderdifferences in employment and wages are the variations in theemployment opportunities and wages paid to workers of differentgender. Gender differences in employment and wages are the sameacross different groups such as age, race ethnicity and immigrationstatus. The differences are the same because men are paid more thanwomen in all the demographic groups. While this has changed overtime, the impact of gender differences in employment and wages isstill felt to date across all groups.

Takingage as a group, gender differences in employment and wages among menand women of the same age are seen in two measures the numberemployed and wages paid. In the older generation, men tend to be paidmore than women, and have a higher number employed. This is the samewith the younger age, which has same observation. Taking race as agroup, the same gender differences are observed across all the races.Americans have had women earning lower and getting fewer jobscompared to men, just like in other races like African-Americans,immigrants and Europeans.


SourceUnit: Lecture14, Gender Differences

Affirmativeactions are policies that the government takes to favor the peoplewho are likely to suffer from gender discrimination in allocatingeconomic opportunities like employment` or education. Economically,an affirmative action seeks to ensure equal distribution ofemployment opportunities by setting a certain number of jobs for thegender that is affected by gender discrimination. Affirmative actionfor women adopts policies where the government requires everyemployer to allocate a specified number of employment opportunitiesto female candidates instead of men, despite the level of competitivequalification. In addition, an affirmative action result in a skeweddistribution of employment opportunities to all genders, whichpresents challenges in the labor market

Theimpact of the skewed allocation of employment opportunities is lowproduction of labor where most productive workers are left out infavor of the less productive. The favor of the aggrieved gender inemployment opportunities tends to ignore the value of human capitalin hiring that considers gender at the expense of productiveabilities. Economic benefits of affirmative action can only be feltif the workers being considered are of the same value in terms ofskills. However, the main direct benefit is the reduction in thelevel of gender inequalities in terms of distribution of employment.Despite this consideration, affirmative action should not be enacted.Instead, active competition should be allowed to determine theallocation of employment opportunities.


SourceUnit: Lecture14, Gender Discrimination

Genderdiscrimination in employment involves hiring workers of certaingenders and avoiding others because of perceived advantages in onegender. One of the causes of gender discrimination is social beliefsthat emanate from discriminatory traditions. The social practiceshold that women are of fewer abilities than men. Another cause is thereligious perspectives that assert women to take the second placeafter a man in the society. Moreover, perceived weakness of womenbecause of their physical abilities is a view that has contributed todiscrimination against women.

Intheory, gender discrimination creates the perception that womenperform less compared to their men counterparts. While this is nottrue, the discriminatory perception has over time influenced thedistribution of employment opportunities and allocation of wages tofavor men at the expense of women. In practice, women are given jobsthat are considered soft, therefore low paying jobs. On the otherhand, men are given jobs that are considered technical and engaging,which results in higher earnings.

Governmentlegislations have been enacted in the United States to reduce orprevent future discrimination on gender basis. The Civil Rights Actof 1964, the Title IX of 1972, the Equal Credit Opportunity Act,Equal Pay Act of 1963 and Pregnancy Discrimination act are some ofthe laws that have been enacted to prevent gender discrimination.However, their effectiveness has not been fully utilized because ofthe perceived social and cultural aspects of women as the weakerlower in men.


SourceUnit: Gender Differences and human capital

Wagevariations are the differences in the wages paid to different workersdespite them performing the same or similar tasks at work. Wagevariations are caused by differences in skills, human capital andgender in most cases. Cognitive and non-cognitive traits of workersare important in the determination of wages of employees. Whilecognitive traits take consideration workers’ personal memoryabilities, non-cognitive abilities, consider non-memory abilities andskills of a worker in determining wages.

Basedon the human capital model, Cognitive and non-cognitive traitsdetermine the economic value of an employee so as to match the wagespaid to each employee to his or her value. Cognitive andnon-cognitive traits are important in determining the value a workercontributes to the workplace, so as to allocate wages to individuals.The use of cognitive and non-cognitive traits to determine the wagesof employees does not vary in gender since the model focuses only onthe skills of the employees. However, the model leads to gendervariations in wages since the more valuable jobs tend to be allocatedto males than females in a typical workplace.


SourceUnit: Lecture 14, Gender Differences

Alsoknown as gender, income difference, Gender Wage Gap is the differencebetween the earnings of men and women expressed in terms of apercentage of male earnings. The gender wage gap is the differencebetween the earnings paid to workers of one gender compared to thosepaid to the other gender. In practice, the gender wage gap isprimarily caused by the men being paid higher wages than women,despite working in the same or similar jobs across the industry. Thegap is also caused by explicit discrimination by against women infavor of men. At the same time, gender pay gap is also caused bycareer choices by women where they take non-technical as men focus onhigh paying technical jobs.

Thecauses and consequences of Gender wage gap vary with the economicsystems due to the different social environments that cause genderinequalities in employment and job variations. However, the ratio ofthe gender wage gap is similar in most economic systems. This isbecause the difference between payment f jobs is caused by the valueof jobs other than the gender that takes the job. At the same time,the causes and consequences of the gender wage gap vary with time.Previously, the gender wage gap was caused by gender discriminationin job allocation, but in current times, the gap is caused byvariations in job value coupled with women`s preferences of softjobs.


SourceUnit: Gender Economics

Oneof the topics to include is gender discrimination. This topic wouldexplore the origin of gender discrimination, the causes of genderdiscrimination and the economic impacts of gender discrimination. Iwould include this topic to give students a chance to study in detailthe gender discrimination topic. The second topic I would include isthe economics of gender roles. I would include this topic to explorethe reasons for gender differences in sharing of roles that have aneconomic impact.

Thethird topic to include is gender differences in economicopportunities. I would include this topic to give a chance to explorethe concept of gender differences and how they affect thedistribution of economic opportunities. The topic would exploregender differences that lead to different economic opportunities tothe two genders. Immediately after this topic, the fourth topic wouldbe gender discrimination. I would include this topic to give a studyof the history of gender discrimination, causes, reasons fordiscrimination and economic impact of gender discrimination.

Thefifth topic would be gender and human capital. I would include thistopic to give chance for studying the opportunities and challengesfacing the development of human capital. This topic would presentstudies of education and training and how they affect thedistribution of labor on gender. The sixth topic would beinternational comparisons of gender. I would include the topic togive opportunity to study the state of gender differences all overthe world. The seventh topic would be gender wage differentials. Thistopic would give the causes of wage differences and the economicimpact of the wage disparities.


Lecture14, Gender differences in Earnings

Lecture20, Gender differences and Job Satisfactionin transition economies

Lecture16, Gender earnings differences in computing wage differentials

Lecture17, Policy Application Comparable worth

Lecture18, discrimination theories Comparable worth

Lecture19 Economic Impact of Title IX

Lecture21 gender differences work ethic in transition economies

Lecture23 Gender Differences in Impact of Minimum Wage