2. Alternative explanations of wage disparities

Suppose that a professor of labor economics claims that recipients of masters degrees in economics gain little in terms of acquired productive skills from their graduate studies and alternatively, that the degree simply reflects a high level of existing mathematical talent.

Which item from the following list characterizes the labor economist's perspective on the link between education and wages?

The superstar phenomenon

Signaling

Compensating differentials

Human capital

A renowned musical artist has earned tremendous amounts of money supplying their talent globally to millions of fans. Which of the following statements characterizes this market in which some workers earn enormous incomes while others (who may have similar talent) earn significantly less? Check all that apply.

The best recording artists earn dramatically more than good or mediocre artists.

Technology enables the best producer to supply all customers at low cost.

Customers in this type of market prefer having twice as much of a good from a recording artist half as talented as the superstar.

The best recording artists have high levels of human capital.

Because of technology, his music is essentially a public good.