Question 1

Studies of family income over time reveal that:

Accepted Answer

A) most people in the highest quintile tend to fall to the lowest quintile during their lifetime. 
B) income mobility is rare for all quintiles of the income distribution. 
C) many people who move down the income ladder are young. 
D) many people who start out at the bottom of the income ladder when they are young move up the income ladder as they age and move down again when they retire. 
A) most people in the highest quintile tend to fall to the lowest quintile during their lifetime. 
B) income mobility is rare for all quintiles of the income distribution. 
C) many people who move down the income ladder are young. 
D) many people who start out at the bottom of the income ladder when they are young move up the income ladder as they age and move down again when they retire.

Question 2

In 2014,health care expenditures in the United States accounted for _____ of GDP.

Accepted Answer

A) approximately 1% 
B) 15% to 20% 
C) 40% to 50% 
D) over 80% 
A) approximately 1% 
B) 15% to 20% 
C) 40% to 50% 
D) over 80%

Question 3

Which example BEST illustrates social insurance?

Accepted Answer

A) liability insurance for automobiles 
B) food stamps 
C) housing subsidies 
D) Social Security 
A) liability insurance for automobiles 
B) food stamps 
C) housing subsidies 
D) Social Security

Question 4

An example of a social insurance program is:

Accepted Answer

A) expenditure on national defense. 
B) Social Security payments to the disabled. 
C) the food stamp program. 
D) purchasing a new city police car. 
A) expenditure on national defense. 
B) Social Security payments to the disabled. 
C) the food stamp program. 
D) purchasing a new city police car.

Question 5

Since 1967,the percentage of the population living below the poverty line has:

Accepted Answer

A) not fluctuated. 
B) steadily increased. 
C) steadily decreased. 
D) fluctuated,but not in any consistent direction. 
A) not fluctuated. 
B) steadily increased. 
C) steadily decreased. 
D) fluctuated,but not in any consistent direction.

Question 6

Technological change in the United States over the past three decades has increased the demand for skilled labor and decreased the demand for unskilled labor.

Accepted Answer

A) True 
 B)False

Question 7

The poverty threshold is the same,regardless of the number of members in a household.

Accepted Answer

A) True 
 B)False

Question 8

Which transaction is a transfer payment?

Accepted Answer

A) The government pays an employee by making a direct transfer to the employee's bank account. 
B) An army officer transfers part of her pay to the government to pay her taxes. 
C) A senior citizen receives a Social Security payment. 
D) Government spends additional funds on infrastructure. 
A) The government pays an employee by making a direct transfer to the employee's bank account. 
B) An army officer transfers part of her pay to the government to pay her taxes. 
C) A senior citizen receives a Social Security payment. 
D) Government spends additional funds on infrastructure.

Question 9

Progress in medical science has contributed to _____ health care costs.

Accepted Answer

A) increasing 
B) decreasing 
C) constant 
D) randomly fluctuating 
A) increasing 
B) decreasing 
C) constant 
D) randomly fluctuating

Question 10

Which factor is one that has been associated with the increase in income inequality in the United States?

Accepted Answer

A) a decrease in households headed by single women 
B) a reduction in the percentage of the population over age 65 
C) a smaller gap between the wages of skilled and unskilled workers 
D) the way technological change has affected labor demand 
A) a decrease in households headed by single women 
B) a reduction in the percentage of the population over age 65 
C) a smaller gap between the wages of skilled and unskilled workers 
D) the way technological change has affected labor demand

Question 11

Programs that are not means-tested:

Accepted Answer

A) provide benefits for people regardless of income level. 
B) specifically help those with low incomes. 
C) provide benefits only for households that earn below the mean household income in the United States for a given year. 
D) provide only in-kind benefits. 
A) provide benefits for people regardless of income level. 
B) specifically help those with low incomes. 
C) provide benefits only for households that earn below the mean household income in the United States for a given year. 
D) provide only in-kind benefits.

Question 12

Some of the major causes of poverty are lack of education,bad luck,lack of proficiency in English,and:

Accepted Answer

A) racial and gender discrimination. 
B) geographic region. 
C) differences in religious preference. 
D) government restrictions. 
A) racial and gender discrimination. 
B) geographic region. 
C) differences in religious preference. 
D) government restrictions.

Question 13

Redistribution programs are means-tested.To qualify for such a program,a person must demonstrate that:

Accepted Answer

A) his or her family is larger than the mean family size for the country as a whole. 
B) his or her average (or mean)family income has fallen (or not gone up)during the past three years. 
C) though unemployed,he or she is making serious efforts to get a job. 
D) his or her income (or means)is below a certain specified level. 
A) his or her family is larger than the mean family size for the country as a whole. 
B) his or her average (or mean)family income has fallen (or not gone up)during the past three years. 
C) though unemployed,he or she is making serious efforts to get a job. 
D) his or her income (or means)is below a certain specified level.

Question 14

Which factor is NOT a major cause of poverty in the United States?

Accepted Answer

A) inadequate educational attainment 
B) discrimination 
C) lack of adequate health coverage 
D) welfare 
A) inadequate educational attainment 
B) discrimination 
C) lack of adequate health coverage 
D) welfare

Question 15

To ensure that low- and middle-income families have health insurance that they can afford,the Affordable Care Act of 2010:

Accepted Answer

A) provides government subsidies to low- and middle-income families. 
B) provides Medicaid for low- and middle-income families. 
C) exempts low- and middle-income families from the individual mandate. 
D) forces employers to provide them with health insurance. 
A) provides government subsidies to low- and middle-income families. 
B) provides Medicaid for low- and middle-income families. 
C) exempts low- and middle-income families from the individual mandate. 
D) forces employers to provide them with health insurance.

Question 16

Means-tested programs are available only to those with sufficiently low income.An example of a means-tested program is Temporary Assistance for Needy Families.

Accepted Answer

A) True 
 B)False

Question 17

Suppose ABC Health is a private health insurance company that offers an identical policy to all customers.Each customer pays a premium equal to the average consumer's annual medical expenses.This is a system that has the potential to fail because of the _____ problem.

Accepted Answer

A) adverse selection 
B) income inequality 
C) single-payer 
D) equity versus efficiency 
A) adverse selection 
B) income inequality 
C) single-payer 
D) equity versus efficiency

Question 18

Employment-based insurance:

Accepted Answer

A) is provided by companies to their employees. 
B) is provided only to those who are not working. 
C) consistently runs into the problem of adverse selection death spiral. 
D) does not receive benefits from the U.S.government. 
A) is provided by companies to their employees. 
B) is provided only to those who are not working. 
C) consistently runs into the problem of adverse selection death spiral. 
D) does not receive benefits from the U.S.government.

Question 19

When a welfare program is provided to those whose income falls below some minimum,it is said to be:

Accepted Answer

A) means-tested. 
B) an in-kind benefit. 
C) a monetary benefit. 
D) a negative income tax. 
A) means-tested. 
B) an in-kind benefit. 
C) a monetary benefit. 
D) a negative income tax.

Question 20

A high-income household is taxed a certain amount of money.A low-income household receives financial assistance in the same amount from government.The value of the marginal dollar of the financial assistance to the family and the taxes paid by the high-income family are:

Accepted Answer

A) the same since it is the same amount of money. 
B) different since the marginal dollar is worth more to the low-income family. 
C) different since the high-income family's lost income will keep them from buying necessities. 
D) unimportant in determining the impact of this plan on the welfare state. 
A) the same since it is the same amount of money. 
B) different since the marginal dollar is worth more to the low-income family. 
C) different since the high-income family's lost income will keep them from buying necessities. 
D) unimportant in determining the impact of this plan on the welfare state.

Exam 18: The Economics of the Welfare State

Studies of family income over time reveal that:

In 2014,health care expenditures in the United States accounted for _____ of GDP.

Which example BEST illustrates social insurance?

An example of a social insurance program is:

Since 1967,the percentage of the population living below the poverty line has:

Technological change in the United States over the past three decades has increased the demand for skilled labor and decreased the demand for unskilled labor.

The poverty threshold is the same,regardless of the number of members in a household.

Which transaction is a transfer payment?

Progress in medical science has contributed to _____ health care costs.

Which factor is one that has been associated with the increase in income inequality in the United States?

Programs that are not means-tested:

Some of the major causes of poverty are lack of education,bad luck,lack of proficiency in English,and:

Redistribution programs are means-tested.To qualify for such a program,a person must demonstrate that:

Which factor is NOT a major cause of poverty in the United States?

To ensure that low- and middle-income families have health insurance that they can afford,the Affordable Care Act of 2010:

Means-tested programs are available only to those with sufficiently low income.An example of a means-tested program is Temporary Assistance for Needy Families.

Suppose ABC Health is a private health insurance company that offers an identical policy to all customers.Each customer pays a premium equal to the average consumer's annual medical expenses.This is a system that has the potential to fail because of the _____ problem.

Employment-based insurance:

When a welfare program is provided to those whose income falls below some minimum,it is said to be:

A high-income household is taxed a certain amount of money.A low-income household receives financial assistance in the same amount from government.The value of the marginal dollar of the financial assistance to the family and the taxes paid by the high-income family are:

First Principles

Economic Models: Trade-Offs and Trade

Consumer and Producer Surplus

Supply and Demand

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Graphs in Economics

Consumer Preferences and Consumer Choice

Filters