Question 1

The idea that individuals who work for companies should receive ________ is known as minimum wage.

Accepted Answer

A)  at least an equitable hourly income 
B)  fair compensation for their skills 
C)  compensation based on the riskiness of their jobs 
D)  increases in wages based on the longevity of employment 
A)  at least an equitable hourly income 
B)  fair compensation for their skills 
C)  compensation based on the riskiness of their jobs 
D)  increases in wages based on the longevity of employment

Question 2

Related to the Economics in Practice on page 374: Considerable evidence suggests that recently in the United States, executive compensation has ________ and the real wage of the average worker has ________.

Accepted Answer

A)  increased; decreased 
B)  decreased; increased 
C)  increased; remained stagnant 
D)  remained stagnant; decreased 
A)  increased; decreased 
B)  decreased; increased 
C)  increased; remained stagnant 
D)  remained stagnant; decreased

Question 3

Comparing the after-tax distribution of income to the before-tax distribution of income, it is true that the after-tax distribution of income is ________ the before-tax distribution of income.

Accepted Answer

A)  more equally distributed than 
B)  less equally distributed than 
C)  more equitably distributed than 
D)  exactly the same as 
A)  more equally distributed than 
B)  less equally distributed than 
C)  more equitably distributed than 
D)  exactly the same as

Question 4

In 2013, the top 3% of wealth holders owned ________ of the nation's wealth.

Accepted Answer

A)  25.5% 
B)  54.5% 
C)  75.3% 
D)  92.9% 
A)  25.5% 
B)  54.5% 
C)  75.3% 
D)  92.9%

Question 5

If the official poverty line for a family of four is $12,000, then the Department of Agriculture's minimum food bundle costs a family of four ________ per year.

Accepted Answer

A)  $1,000 
B)  $3,000 
C)  $4,000 
D)  $12,000 
A)  $1,000 
B)  $3,000 
C)  $4,000 
D)  $12,000

Question 6

The idea that income redistribution violates the proposition that "one is entitled to the fruits of one's efforts" is a common argument most used

Accepted Answer

A)  in favor of raising the minimum wage. 
B)  in favor of an equal distribution of income. 
C)  against income redistribution. 
D)  in favor of income redistribution. 
A)  in favor of raising the minimum wage. 
B)  in favor of an equal distribution of income. 
C)  against income redistribution. 
D)  in favor of income redistribution.

Question 7

The $4,500 you earned last year in dividend payments is an example of ________ income.

Accepted Answer

A)  property 
B)  transfer 
C)  inheritance 
D)  human capital 
A)  property 
B)  transfer 
C)  inheritance 
D)  human capital

Question 8

When measuring ________ for the purpose of classifying people as poor, the measurement used is money income.

Accepted Answer

A)  employment 
B)  wealth 
C)  income 
D)  All of the above are correct. 
A)  employment 
B)  wealth 
C)  income 
D)  All of the above are correct.

Question 9

A majority of states have a minimum wage that is higher than the federal minimum wage.

Accepted Answer

A) True 
 B)False

Question 10

________ is (are) paid regardless of a person's income from other sources and regardless of assets.

Accepted Answer

A)  Unemployment benefits 
B)  The earned income tax credit 
C)  Medicaid 
D)  SNAP benefits 
A)  Unemployment benefits 
B)  The earned income tax credit 
C)  Medicaid 
D)  SNAP benefits

Question 11

Earning a master's degree in Engineering is an example of

Accepted Answer

A)  a Pareto good. 
B)  a compensating differential. 
C)  economic income. 
D)  an investment in human capital. 
A)  a Pareto good. 
B)  a compensating differential. 
C)  economic income. 
D)  an investment in human capital.

Question 12

John Rawls developed

Accepted Answer

A)  the idea of utilitarian justice. 
B)  the theory of distributional justice. 
C)  the labor theory of value. 
D)  the theory of comparative advantage. 
A)  the idea of utilitarian justice. 
B)  the theory of distributional justice. 
C)  the labor theory of value. 
D)  the theory of comparative advantage.

Question 13

Evidence suggests that income inequality in India is

Accepted Answer

A)  increasing relatively rapidly. 
B)  increasing relatively slowly. 
C)  decreasing relatively rapidly. 
D)  decreasing relatively slowly. 
A)  increasing relatively rapidly. 
B)  increasing relatively slowly. 
C)  decreasing relatively rapidly. 
D)  decreasing relatively slowly.

Question 14

________ of income redistribution argue that redistribution ________ those who, through no fault of their own, are unable to earn an adequate income.

Accepted Answer

A)  Opponents; harms 
B)  Opponents; helps 
C)  Proponents; harms 
D)  Proponents; helps 
A)  Opponents; harms 
B)  Opponents; helps 
C)  Proponents; harms 
D)  Proponents; helps

Question 15

The demand for oil rig workers off the coast of Louisiana is the same as the demand for oil pipeline workers in North Dakota. The annual earnings of Louisiana oil rig workers is 22% higher than the earnings of North Dakota oil pipeline workers. A possible explanation for this is

Accepted Answer

A)  Louisiana oil rig workers can work only part of the year, but North Dakota oil pipeline workers can work year round. 
B)  the amount of human capital needed to be a pipeline worker must be greater than the amount of human capital necessary to be an oil rig worker. 
C)  Louisiana oil rig workers must face discrimination that is not encountered by North Dakota oil pipeline workers. 
D)  being an oil rig worker in Louisiana must be more dangerous than being a pipeline worker in North Dakota. 
A)  Louisiana oil rig workers can work only part of the year, but North Dakota oil pipeline workers can work year round. 
B)  the amount of human capital needed to be a pipeline worker must be greater than the amount of human capital necessary to be an oil rig worker. 
C)  Louisiana oil rig workers must face discrimination that is not encountered by North Dakota oil pipeline workers. 
D)  being an oil rig worker in Louisiana must be more dangerous than being a pipeline worker in North Dakota.

Question 16

The second-largest cash transfer program(s) in the United States, smaller than only the Social Security system, is(are) the

Accepted Answer

A)  unemployment insurance program. 
B)  Temporary Assistance to Needy Families (TANF) program. 
C)  Medicare and Medicaid programs. 
D)  Supplemental Nutrition Assistance (SNAP) program. 
A)  unemployment insurance program. 
B)  Temporary Assistance to Needy Families (TANF) program. 
C)  Medicare and Medicaid programs. 
D)  Supplemental Nutrition Assistance (SNAP) program.

Question 17

Both Amy and Tom are trained as nurses. Amy makes $35,000 a year working as a nurse in an emergency room in a New York City hospital. Tom makes $20,000 working as a community health nurse in New York City. Which of the following is true?

Accepted Answer

A)  Tom is clearly worse off than Amy, because he earns $15,000 a year less. 
B)  Tom must be better off than Amy if he is willing to take a job at $15,000 a year less than Amy. 
C)  From this information it cannot be determined who is better off because income is an imperfect measure of well-being. 
D)  Even though income is an imperfect measure of well-being, Amy and Tom must be equally well off because either is free to switch jobs. 
A)  Tom is clearly worse off than Amy, because he earns $15,000 a year less. 
B)  Tom must be better off than Amy if he is willing to take a job at $15,000 a year less than Amy. 
C)  From this information it cannot be determined who is better off because income is an imperfect measure of well-being. 
D)  Even though income is an imperfect measure of well-being, Amy and Tom must be equally well off because either is free to switch jobs.

Question 18

As income becomes more unequally distributed, the Lorenz curve ________ and ________.

Accepted Answer

A)  moves further down to the right; the shaded area increases 
B)  moves further up to the left; the shaded area decreases 
C)  moves further up to the left, rising above the 45 degree line; the shaded area increases 
D)  moves further down to the right; the shaded area decreases 
A)  moves further down to the right; the shaded area increases 
B)  moves further up to the left; the shaded area decreases 
C)  moves further up to the left, rising above the 45 degree line; the shaded area increases 
D)  moves further down to the right; the shaded area decreases

Question 19

________ is financed through a payroll tax.

Accepted Answer

A)  The SNAP program 
B)  The Public Housing program 
C)  The Earned Income Tax Credit program 
D)  The Social Security system 
A)  The SNAP program 
B)  The Public Housing program 
C)  The Earned Income Tax Credit program 
D)  The Social Security system

Question 20

A ________ income tax means that those with a higher income pay a higher percentage of their income in taxes than low-income people.

Accepted Answer

A)  regressive 
B)  progressive 
C)  proportional 
D)  consumption-based 
A)  regressive 
B)  progressive 
C)  proportional 
D)  consumption-based

Exam 18: Income Distribution and Poverty

The idea that individuals who work for companies should receive ________ is known as minimum wage.

Related to the Economics in Practice on page 374: Considerable evidence suggests that recently in the United States, executive compensation has ________ and the real wage of the average worker has ________.

Comparing the after-tax distribution of income to the before-tax distribution of income, it is true that the after-tax distribution of income is ________ the before-tax distribution of income.

In 2013, the top 3% of wealth holders owned ________ of the nation's wealth.

If the official poverty line for a family of four is $12,000, then the Department of Agriculture's minimum food bundle costs a family of four ________ per year.

The idea that income redistribution violates the proposition that "one is entitled to the fruits of one's efforts" is a common argument most used

The $4,500 you earned last year in dividend payments is an example of ________ income.

When measuring ________ for the purpose of classifying people as poor, the measurement used is money income.

A majority of states have a minimum wage that is higher than the federal minimum wage.

________ is (are) paid regardless of a person's income from other sources and regardless of assets.

Earning a master's degree in Engineering is an example of

John Rawls developed

Evidence suggests that income inequality in India is

________ of income redistribution argue that redistribution ________ those who, through no fault of their own, are unable to earn an adequate income.

The demand for oil rig workers off the coast of Louisiana is the same as the demand for oil pipeline workers in North Dakota. The annual earnings of Louisiana oil rig workers is 22% higher than the earnings of North Dakota oil pipeline workers. A possible explanation for this is

The second-largest cash transfer program(s) in the United States, smaller than only the Social Security system, is(are) the

Both Amy and Tom are trained as nurses. Amy makes $35,000 a year working as a nurse in an emergency room in a New York City hospital. Tom makes $20,000 working as a community health nurse in New York City. Which of the following is true?

As income becomes more unequally distributed, the Lorenz curve ________ and ________.

________ is financed through a payroll tax.

A ________ income tax means that those with a higher income pay a higher percentage of their income in taxes than low-income people.

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Elasticity

Household Behavior and Consumer Choice

The Production Process: the Behavior of Profit-Maximizing Firms

Short-Run Costs and Output Decisions

Long-Run Costs and Output Decisions

Input Demand: the Labor and Land Markets

Input Demand: the Capital Market and the Investment Decision

General Equilibrium and the Efficiency of Perfect Competition

Monopoly and Antitrust Policy

Oligopoly

Monopolistic Competition

Externalities, Public Goods, and Common Resources

Uncertainty and Asymmetric Information

Public Finance: the Economics of Taxation

International Trade, Comparative Advantage, and Protectionism

Economic Growth in Developing Economies

Critical Thinking About Research

Filters

Related to the Economics in Practice on page 374: Considerable evidence suggests that recently in the United States, executive compensation has and the real wage of the average worker has .

of income redistribution argue that redistribution those who, through no fault of their own, are unable to earn an adequate income.

As income becomes more unequally distributed, the Lorenz curve and .