Ch. 12 Why Wages Vary

Question 1

Human Capital

Answer 1

The accumulated knowledge and skills that make a worker more productive

Question 2

Signal

Answer 2

An action taken to credibly convey private information or information that is hard to verify

Question 3

Efficiency Wage

Answer 3

Higher wage paid to encourage greater worker productivity

Question 4

Compensating Differential

Answer 4

The differences in wages required to offset the desirable or undesirable aspect of a job

Question 5

Monopsony Power

Answer 5

A business using its bargaining power as a major buyer to pay lower prices, including major employers paying lower wages

Question 6

Discrimination

Answer 6

Treating others differently based on characteristics like sex, race, ethnicity, sexual orientation, gender identity, religion, disability, social class, etc.

Question 7

Prejudice

Answer 7

A preconceived bias against a group that’s not based on reason or experience

Question 8

Implicit Bias

Answer 8

Judgements shaped by the unconscious attribution of particular qualities to specific groups

Question 9

Statistical Discrimination

Answer 9

Using observations about the average characteristics of a group to make interferences about an individual

Question 10

Institutional Discrimination

Answer 10

Bias against disadvantaged groups that is embedded in laws and institutions

Question 11

General Skills

Answer 11

Skills useful to many employers

Question 12

Job-Specific Skills

Answer 12

Skills that are only useful in a job with one particular employer

Question 13

Pay-for-Performance

Answer 13

Linking income earned to measures of their performance

Question 14

Extrinsic Motivation

Answer 14

The desire to do something for its external rewards like higher pay

Question 15

Intrinsic Motivation

Answer 15

The desire to do something for the enjoyment of the activity itself

Question 16

Reservation Wage

Answer 16

Lowest wage someone is willing to work at