Question 1

The highest quintile of households in the income distribution (as of 2017)

Accepted Answer

A)  receives about 3 percent of the total income.
B)  comprises 10 percent of all households.
C)  receives about 52 percent of the total income.
D)  receives about 43 percent of the total income.E) None of the above
F) B) and D)

Question 2

What is the difference between income and wealth? How can wealth contribute to income inequality?

Accepted Answer

Income is a flow; it represents a stream...

Question 3

The basic economic argument for greater income equality is that

Accepted Answer

A)  an equal distribution of income is the logical outcome of any tax-transfer program.
B)  because citizens enjoy political equality, they are also entitled to economic equality.
C)  a more equal distribution of income will tend to maximize incentives to work, invest, and assume risk.
D)  a more equal distribution of a given amount of income will increase the total utility of consumers.E) C) and D)
F) B) and C)

Question 4

Labor market discrimination occurs when equivalent labor resources are paid or treated differently even though their productive contributions are equal.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following employers is the most prejudiced? Employer

Accepted Answer

A)  A, whose discrimination coefficient, d, is $0.
B)  B, whose discrimination coefficient, d, is $2.
C)  C, whose discrimination coefficient, d, is $4.
D)  D, whose discrimination coefficient, d, is $6.E) C) and D)
F) B) and D)

Question 6

What is the argument for income inequality?

Accepted Answer

The argument for income inequality makes...

Question 7

Refer to the diagram, where curves (a) through (e) are Lorenz curves for five different countries. Income is equally distributed in

Accepted Answer

A)  none of the countries shown.
B)  country b.
C)  countries a and e.
D)  country a.E) B) and C)
F) All of the above

Question 8

The basic argument for income inequality is that

Accepted Answer

A)  the very rich establish consumption patterns that are desirable for the rest of society to emulate.
B)  the rich buy luxury goods that soon become affordable to everyone else because of economies of scale.
C)  income inequality is essential to maintain incentives to produce.
D)  inequality undermines incentives and tends to reduce the size of the national income.E) None of the above
F) All of the above

Question 9

Which of the following measurement issues makes interpretation of U.S. poverty rates difficult?

Accepted Answer

A)  Poverty statistics measure income rather than consumption, and some families may be able to consume above the official poverty line.
B)  The high cost of living in rural areas tends to result in the understatement of poverty.
C)  Most people below the poverty line have substantial unreported income.
D)  The poverty rate is adjusted for every urban and rural area, so people's poverty status changes whenever they move.E) None of the above
F) B) and D)

Question 10

Which of the following groups has the highest poverty rate?

Accepted Answer

A)  age 65 or over
B)  foreign-born (not citizens) 
C)  Hispanics
D)  female-headed householdsE) None of the above
F) A) and C)

Question 11

The following groups in the U.S. all had higher-than-the-national-average poverty rates in 2017, except

Accepted Answer

A)  households headed by females.
B)  foreign-born noncitizens.
C)  persons 65 or older.
D)  Hispanics.E) B) and D)
F) B) and C)

Question 12

How do government programs affect the distribution of income in the United States?

Accepted Answer

The U.S. government significantly redist...

Question 13

The Social Security program is financed with funds from general tax revenues of the federal government.

Accepted Answer

A) True 
 B)False

Question 14

In 2017, a household with an annual income of $80,000 would find itself in the

Accepted Answer

A)  second quintile of the household income distribution.
B)  third quintile of the household income distribution.
C)  fourth quintile of the household income distribution.
D)  fifth (highest) quintile of the household income distribution.E) A) and C)
F) A) and D)

Question 15

Which of the following is not a major complaint about the official income data used in measuring poverty?

Accepted Answer

A)  The income and poverty data are not frequently measured and released.
B)  The income data do not aptly measure purchasing power, especially in major metropolitan areas.
C)  The income data do not adequately measure households' consumption levels.
D)  The income data do not account for noncash transfers and benefits.E) B) and C)
F) A) and D)

Question 16

Which of the following would be a significant cause of income inequality in the United States?

Accepted Answer

A)  housing
B)  discrimination
C)  in-kind transfers
D)  Social SecurityE) B) and C)
F) A) and D)

Question 17

In Venezuela, there are a small number of extremely wealthy households and an extremely large number of very poor households. If the United States were represented in the figure by Lorenz curve c, which curve would represent Venezuela?

Accepted Answer

A)  a
B)  b
C)  c
D)  dE) A) and D)
F) B) and C)

Question 18

Suppose that white workers are getting paid $21/hour, while similarly productive African-American workers are getting paid $18/hour. A prejudiced white employer with a discrimination coefficient of $24/hour will

Accepted Answer

A)  hire African Americans only if their wage rate falls to $3/hour.
B)  hire African-American workers.
C)  not hire African Americans at all, even if they offer to work for free.
D)  not hire African Americans, unless they work for free.E) B) and C)
F) A) and C)

Question 19

In 2017, the average income for households in the United States was about

Accepted Answer

A)  $61,372.
B)  $42,820.
C)  $56,610.
D)  $68,426.E) B) and D)
F) B) and C)

Question 20

Refer to the diagram. If line (c) represents the distribution of income before taxes and transfers and line (b) represents the distribution after taxes and transfers, then taxes and transfers have

Accepted Answer

A)  added to income inequality.
B)  decreased the Gini ratio.
C)  increased poverty.
D)  reduced real GDP per person.E) A) and B)
F) None of the above

Exam 23: Income Inequality, Poverty, and Discrimination

What is the argument for income inequality?

Correct AnswerverifiedThe argument for income inequality makes...View AnswerShow Answer

In 2017, a household with an annual income of $80,000 would find itself in the

Correct AnswerverifiedShow Answer

The basic economic argument for greater income equality is that

Correct AnswerverifiedShow Answer

In 2017, the average income for households in the United States was about

Correct AnswerverifiedShow Answer

Labor market discrimination occurs when equivalent labor resources are paid or treated differently even though their productive contributions are equal.

Correct AnswerverifiedShow Answer

The following groups in the U.S. all had higher-than-the-national-average poverty rates in 2017, except

Correct AnswerverifiedShow Answer

The Social Security program is financed with funds from general tax revenues of the federal government.

Correct AnswerverifiedShow Answer

Refer to the diagram. If line (c) represents the distribution of income before taxes and transfers and line (b) represents the distribution after taxes and transfers, then taxes and transfers have

Correct AnswerverifiedShow Answer

Which of the following employers is the most prejudiced? Employer

Correct AnswerverifiedShow Answer

Which of the following would be a significant cause of income inequality in the United States?

Correct AnswerverifiedShow Answer

How do government programs affect the distribution of income in the United States?

Correct AnswerverifiedThe U.S. government significantly redist...View AnswerShow Answer

What is the difference between income and wealth? How can wealth contribute to income inequality?

Correct AnswerverifiedIncome is a flow; it represents a stream...View AnswerShow Answer

The highest quintile of households in the income distribution (as of 2017)

Correct AnswerverifiedShow Answer

In Venezuela, there are a small number of extremely wealthy households and an extremely large number of very poor households. If the United States were represented in the figure by Lorenz curve c, which curve would represent Venezuela?

Correct AnswerverifiedShow Answer

Which of the following measurement issues makes interpretation of U.S. poverty rates difficult?

Correct AnswerverifiedShow Answer

Which of the following is not a major complaint about the official income data used in measuring poverty?

Correct AnswerverifiedShow Answer

Which of the following groups has the highest poverty rate?

Correct AnswerverifiedShow Answer

Suppose that white workers are getting paid $21/hour, while similarly productive African-American workers are getting paid $18/hour. A prejudiced white employer with a discrimination coefficient of $24/hour will

Correct AnswerverifiedShow Answer

The basic argument for income inequality is that

Correct AnswerverifiedShow Answer

Refer to the diagram, where curves (a) through (e) are Lorenz curves for five different countries. Income is equally distributed in

Correct AnswerverifiedShow Answer

Correct Answer
verified
The argument for income inequality makes...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The U.S. government significantly redist...
View Answer

Correct Answer
verified
Income is a flow; it represents a stream...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified