Question 1

Which of the following is correct?

Accepted Answer

A)   Income is a stock and wealth is a flow concept.
B)   Both income and wealth are flow concepts.
C)   Both income and wealth are stock concepts.
D)   Income is a flow and wealth is a stock concept.E) A) and C)
F) All of the above

Question 2

(Consider This) The main focus of the vignette "Slicing the Pizza" is the:

Accepted Answer

A)   equality-efficiency trade-off.
B)   principal-agent problem.
C)   impact of market power on economic efficiency.
D)   the highly unequal distribution of U.S.wealth.E) A) and B)
F) C) and D)

Question 3

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 households.E) A) and C)
F) C) and D)

Question 4

Since 1980 the difference between the earnings of college graduates and high school graduates has:

Accepted Answer

A)   fallen,thereby increasing income inequality.
B)   increased,thereby increasing income inequality.
C)   remained constant.
D)   increased,thereby decreasing income inequality.E) B) and C)
F) None of the above

Question 5

Median wealth in the United States in 2010:

Accepted Answer

A)   was about the same as in 1995.
B)   had grown by about 8 percent since 1995.
C)   was nearly 8 percent lower than in 1995.
D)   was about $84,000.E) C) and D)
F) B) and D)

Question 6

Income mobility:

Accepted Answer

A)   contributes to greater wealth inequality in the United States.
B)   is less in the United States than in most developing nations.
C)   is the movement of individuals and households from one income quintile to another over time.
D)   makes lifetime income inequality among income receivers in the United States greater than income inequality in any single year.E) B) and C)
F) All of the above

Question 7

The equality-efficiency trade-off refers to:

Accepted Answer

A)   the conflict between risk averters and risk takers.
B)   the willingness of Congress to abandon existing welfare programs in favor of a comprehensive plan to increase education and training for low-income persons.
C)   possible conflicts between the goals of economic efficiency and greater income equality.
D)   the difference between the goals of income equality and equality of economic opportunity.E) B) and D)
F) None of the above

Question 8

A particular woman is denied on-the-job training because women on average are more likely to drop out of the workforce than men.This illustrates:

Accepted Answer

A)   occupational segregation.
B)   the crowding model.
C)   the taste-for-discrimination model.
D)   statistical discrimination.E) A) and C)
F) B) and C)

Question 9

(Consider This) According to economists Krueger and Perri:

Accepted Answer

A)   despite the fact that income inequality has increased in recent decades,consumption inequality has remained relatively constant.
B)   increases in income inequality over recent decades understate the growth in consumption inequality.
C)   both income and consumption inequality have increased at approximately the same rate over recent decades.
D)   both income and consumption are more equally distributed than they were 30 years ago.E) C) and D)
F) A) and B)

Question 10

An example of a social insurance program is ____________,whereas an example of a public assistance program is _______.

Accepted Answer

A)   Temporary Assistance for Needy Families;unemployment compensation
B)   Supplemental Security Income;unemployment compensation
C)   Social Security;Supplemental Nutrition Assistance Program
D)   Medicaid;MedicareE) All of the above
F) A) and C)

Question 11

Assume that all workers are equally productive,but the wage rate for men is $12 compared to $9 for women.An employer who employs only male workers must have a discrimination coefficient of:

Accepted Answer

A)   more than $3.
B)   at most 0.3.
C)   less than $3.
D)   1.33 or less.E) B) and C)
F) A) and D)

Question 12

Which of the following would move the Lorenz curve closer to the diagonal?

Accepted Answer

A)   A 20 percent boost in Social Security retirement benefits.
B)   An increase in payroll taxes.
C)   A reduction in the progressiveness of the federal personal income tax.
D)   The elimination of the TANF program.E) B) and D)
F) B) and C)

Question 13

According to the standard government definitions,the percentage of the U.S.population now (2011) considered to be living in poverty is about:

Accepted Answer

A)   15.0 percent.
B)   20.5 percent.
C)   9.8 percent.
D)   13.2 percent.E) None of the above
F) A) and B)

Question 14

In the United States:

Accepted Answer

A)   taxes decrease,but transfers increase,income inequality.
B)   taxes increase,but transfers reduce,income inequality.
C)   both taxes and transfers decrease income inequality.
D)   both taxes and transfers increase income inequality.E) B) and C)
F) B) and D)

Question 15

In 2011,the average income for households in the United States was about:

Accepted Answer

A)   $69,821.
B)   $42,820.
C)   $56,610.
D)   $64,842.E) None of the above
F) B) and C)

Question 16

A reduction in the collective discrimination coefficients of employers will increase the wage rate of those discriminated against but reduce their employment.

Accepted Answer

A) True 
 B)False

Question 17

The greater the area between the Lorenz curve and the diagonal in the Lorenz curve diagram,the:

Accepted Answer

A)   smaller is the Gini ratio and the greater is the degree of income inequality.
B)   larger is the Gini ratio and the greater is the degree of income inequality.
C)   smaller is the Gini ratio and the lesser is the degree of income inequality.
D)   larger is the Gini ratio and the lesser is the degree of income inequality.E) B) and D)
F) None of the above

Question 18

The earned-income tax credit:

Accepted Answer

A)   increases the personal income tax liability of low-income working families.
B)   provides a cash payment to low-income working families if their tax credit exceeds their tax liability.
C)   is designed to make labor force employment less attractive.
D)   was eliminated as part of welfare reform in 1996.E) B) and C)
F) None of the above

Question 19

Discrimination:

Accepted Answer

A)   affects the distribution of domestic output and income,but not its total size.
B)   is shown as some point outside of an economy's production possibilities curve.
C)   places the economy at some point inside of its production possibilities curve.
D)   affects the total size of domestic output and income but not its distribution.E) B) and C)
F) C) and D)

Question 20

Which of the following provides public assistance to those who are blind and otherwise disabled?

Accepted Answer

A)   Medicare.
B)   Supplemental Security Income (SSI) .
C)   Medicaid.
D)   TANF.E) B) and D)
F) C) and D)

Exam 22: Income Inequality Poverty and Discrimination

The greater the area between the Lorenz curve and the diagonal in the Lorenz curve diagram,the:

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An example of a social insurance program is ____________,whereas an example of a public assistance program is _______.

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In 2011,the average income for households in the United States was about:

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A particular woman is denied on-the-job training because women on average are more likely to drop out of the workforce than men.This illustrates:

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A reduction in the collective discrimination coefficients of employers will increase the wage rate of those discriminated against but reduce their employment.

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Which of the following groups has the highest poverty rate?

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Median wealth in the United States in 2010:

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According to the standard government definitions,the percentage of the U.S.population now (2011) considered to be living in poverty is about:

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(Consider This) The main focus of the vignette "Slicing the Pizza" is the:

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Income mobility:

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Which of the following is correct?

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The earned-income tax credit:

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Which of the following provides public assistance to those who are blind and otherwise disabled?

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Which of the following would move the Lorenz curve closer to the diagonal?

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In the United States:

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(Consider This) According to economists Krueger and Perri:

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The equality-efficiency trade-off refers to:

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Since 1980 the difference between the earnings of college graduates and high school graduates has:

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Assume that all workers are equally productive,but the wage rate for men is $12 compared to $9 for women.An employer who employs only male workers must have a discrimination coefficient of:

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Discrimination:

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An example of a social insurance program is ______,whereas an example of a public assistance program is _.

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