31 Workers with relatively high levels of natural ability ar

31. Workers with relatively high levels of natural ability are quite likely to attend college This can cause (a) an upward; ability increases earnings (b) a downward; ability increases earnings (c) an upward; other benefits of college are ignored (d) a downward; other benefits of college are ignored e__bias when estimating educational returns because 32. The psychic costs of college are usually lowest for: (a) students with relatively high ability (b) students from poor backgrounds. (c) students with average or low ability (d) students who are at the margin in terms of attending college or not. 33. An increase in an individual\'s reservation wage (a) will increase the duration of the individual\'s unemployment but not affect the expected wage. (b) will increase the individual\'s expected wage but not affect the duration of unemployment. c) will not change the individual\'s duration of unemployment. (d) will increase both the individual\'s duration of unemployment and expected wage. 34. The existence of generous unemployment insurance will probably: (a) reduce the employment rate. (b) reduce reservation wages. (c) improve job matches. (d) increase income inequality

Solution

31. The correct answer is: a)

Reason: it is factually correct that higher ability have higher potential to earn more and which produces an upward bias when estimating educational returns.

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