7.Why is it that a firm will typically not pay for general training?

a. The skills gained from general training are transferable to other firms.

b. General training usually doesn't increase worker productivity.

c. General training is too expensive.

d. General training is free.

8. "Experience squared" enters into the Mincer Earnings function with a negative coefficient because

a. Earnings will fall to zero after age 65.

b. Earnings increase linearly with experience.

c. Earnings increase at a decreasing rate at experience rises.

d. Earnings fall as experience rises.

9. Juanita is a high school graduate, considering going to law school. If she does, she will spend $60,000 on tuition and books to get a college education (during the first time period), $120,000 on tuition and books to get a law degree (during the second time period), and her law degree will earn her $1,000,000 more during the remainder of her work-life, relative to a high school graduate (during the third time period). Juanita's time preference for money is associated with a per-period interest rate of 20 percent. Approximately what is Juanita's present value of obtaining a law degree?

a. $1,000,000

b. $445,370

c. $820,000

d. $712,037

10. What is the present value of $1000 received 10 years from now, if the interest rate is 5%?

a. $1000

b. $614

c. $952

d. $20,000

11. Why might people choose to go to college?

a. Because a college education signals to firms that the worker is highly motivated.

b. Because a college education increases one's productivity, which will be rewarded in the labor market with higher wages.

c. Because one cannot find employment.

d. All of the above.

12. If an employer hires a worker and offers job specific training during the first period, in the second period, the employer will pay the worker

a. the wage that the worker could earn at another firm.

b. a wage above the worker's value of marginal product.

c. a wage equal to the worker's value of marginal product.

d. a wage between the wage they would be paid at another firm, and the value of their marginal product.

13. An employer who offers general training during the first period of employment will pay a wage equal to

a. the cost of the training.

b. the worker's value of marginal product minus the cost of training during the first period.

c. the worker's value of marginal product plus the cost of training during the first period.

d. the worker's value of marginal product during the first period.

14. Since median weekly earnings are $769, and mean weekly earnings are $959, we know that

a. the wage distribution is skewed with a long left tail.

b. half of all workers earn less than $928 a week.

c. half of all workers earn less than $760 a week.

d. half of all workers earn more than $928 a week.

15. If the area between the Lorenz Curve and the diagonal equality line is .3, the Gini coefficient is

a. 0.6

b. 0.4

c. 0.3

d. 0.5