Question 1

If a person's asset income rises and his or her transfer payments (received) decline, it follows that that person's

Accepted Answer

A) overall income rises. 
B) overall income falls. 
C) overall income stays constant. 
D) labor income will rise as his or her asset income rises. 
E) none of the above 
A) overall income rises. 
B) overall income falls. 
C) overall income stays constant. 
D) labor income will rise as his or her asset income rises. 
E) none of the above

Question 2

Describe the relationship between income and education in the United States. Cite evidence that supports and explains this relationship.

Accepted Answer

There is a significant direct relationsh

Question 3

Suppose 60 percent of all households earn 60 percent of all income. Based on this information it follows that

Accepted Answer

A) 20 percent of all households earn 20 percent of all income. 
B) 40 percent of all households earn 40 percent of all income. 
C) the Lorenz curve and the line of perfect income equality are one and the same. 
D) a, b, and c 
E) none of the above 
A) 20 percent of all households earn 20 percent of all income. 
B) 40 percent of all households earn 40 percent of all income. 
C) the Lorenz curve and the line of perfect income equality are one and the same. 
D) a, b, and c 
E) none of the above

Question 4

Which of the following statements is false?

Accepted Answer

A) There are more poor white persons than there are poor African-American persons. 
B) People are more likely to be poor when they are young than at any other time. 
C) Families headed by females are more likely to be poor than families headed by males. 
D) The uneducated and poorly educated are more likely to be poor than the educated. 
E) none of the above 
A) There are more poor white persons than there are poor African-American persons. 
B) People are more likely to be poor when they are young than at any other time. 
C) Families headed by females are more likely to be poor than families headed by males. 
D) The uneducated and poorly educated are more likely to be poor than the educated. 
E) none of the above

Question 5

There are more white persons in the United States living below the poverty line than African- American persons living below the poverty line.

Accepted Answer

A) True 
 B)False

Question 6

Luck is more likely to influence incomes in the short run than in the long run.

Accepted Answer

A) True 
 B)False

Question 7

As a determinant of a person's income, luck is more important in the __________ run, as continuous reoccurrences of one kind of luck are __________.

Accepted Answer

A) short; likely 
B) short; unlikely 
C) long; likely 
D) long; unlikely 
A) short; likely 
B) short; unlikely 
C) long; likely 
D) long; unlikely

Question 8

The Gini coefficient is computed by dividing the

Accepted Answer

A) area between the line of perfect income equality and the actual Lorenz curve by the area below the Lorenz curve. 
B) area below the Lorenz curve by the total area below the line of perfect equality. 
C) area between the line of perfect income equality and the actual Lorenz curve by the total triangular area below the line of perfect income equality. 
D) either a or b 
E) any of the above 
A) area between the line of perfect income equality and the actual Lorenz curve by the area below the Lorenz curve. 
B) area below the Lorenz curve by the total area below the line of perfect equality. 
C) area between the line of perfect income equality and the actual Lorenz curve by the total triangular area below the line of perfect income equality. 
D) either a or b 
E) any of the above

Question 9

Economists often assert that a person who receives an in-kind transfer payment (from government) has a higher income as a result. But an in-kind transfer is not money income, so what are economists thinking?

Accepted Answer

A) They are thinking that an additional in-kind benefit, like more money income, makes a person better off and thus they are equating being better off (in the sense of having more goods and services) with a higher income. 
B) They are thinking that persons who receive in-kind benefits end up selling them, receiving money in exchange. 
C) They are thinking that the individuals who receive the in-kind benefits equate more in-kind benefits with more money income. 
D) They are thinking that individuals who receive in-kind benefits would prefer to receive them over receiving additional money income, so that in-kind benefits are worth at least their monetary value. 
E) none of the above 
A) They are thinking that an additional in-kind benefit, like more money income, makes a person better off and thus they are equating being better off (in the sense of having more goods and services) with a higher income. 
B) They are thinking that persons who receive in-kind benefits end up selling them, receiving money in exchange. 
C) They are thinking that the individuals who receive the in-kind benefits equate more in-kind benefits with more money income. 
D) They are thinking that individuals who receive in-kind benefits would prefer to receive them over receiving additional money income, so that in-kind benefits are worth at least their monetary value. 
E) none of the above

Question 10

If the Gini coefficient is 1, there is

Accepted Answer

A) complete income inequality. 
B) complete income equality. 
C) relative income equality. 
D) relative income inequality. 
A) complete income inequality. 
B) complete income equality. 
C) relative income equality. 
D) relative income inequality.

Question 11

The Lorenz curve and the line of perfect income equality will be one and the same in an economy if 20% of all households receive 20% of all income.

Accepted Answer

A) True 
 B)False

Question 12

An individual's income equals

Accepted Answer

A) labor income + wages + asset income. 
B) labor income + asset income. 
C) labor income + asset income - taxes. 
D) labor income - taxes. 
E) labor income + asset income + transfer payments - taxes. 
A) labor income + wages + asset income. 
B) labor income + asset income. 
C) labor income + asset income - taxes. 
D) labor income - taxes. 
E) labor income + asset income + transfer payments - taxes.

Question 13

The practice of companies promoting from within is on the decline, possibly because of less regulated, increasingly competitive product markets.

Accepted Answer

A) True 
 B)False

Question 14

A Gini coefficient of 1 means there is

Accepted Answer

A) perfect income equality. 
B) perfect income inequality. 
C) a more equal distribution of income than before. 
D) a less equal distribution of income than before. 
E) the same distribution of income as before. 
A) perfect income equality. 
B) perfect income inequality. 
C) a more equal distribution of income than before. 
D) a less equal distribution of income than before. 
E) the same distribution of income as before.

Question 15

A person is more likely to be poor if he or she is

Accepted Answer

A) African-American or Hispanic rather than white. 
B) a member of a male-headed family rather than a female-headed family. 
C) old rather than young. 
D) all of the above 
A) African-American or Hispanic rather than white. 
B) a member of a male-headed family rather than a female-headed family. 
C) old rather than young. 
D) all of the above

Question 16

Transfer payments are payments that are

Accepted Answer

A) made in return for goods and services currently supplied. 
B) made in return for goods and services to be supplied in the future. 
C) made in return for goods and services that were supplied in the past. 
D) not made in return for goods and services currently supplied. 
A) made in return for goods and services currently supplied. 
B) made in return for goods and services to be supplied in the future. 
C) made in return for goods and services that were supplied in the past. 
D) not made in return for goods and services currently supplied.

Question 17

It is not possible for everyone to be better off (in absolute terms) if the income distribution has become more unequal.

Accepted Answer

A) True 
 B)False

Question 18

If a country's Gini coefficient is zero, the income distribution in the country is completely unequal.

Accepted Answer

A) True 
 B)False

Question 19

The poverty income threshold (or poverty line) is updated each year to reflect changes in the consumer price index.

Accepted Answer

A) True 
 B)False

Exam 28: The Distribution of Income and Poverty

If a person's asset income rises and his or her transfer payments (received) decline, it follows that that person's

Describe the relationship between income and education in the United States. Cite evidence that supports and explains this relationship.

Suppose 60 percent of all households earn 60 percent of all income. Based on this information it follows that

Which of the following statements is false?

There are more white persons in the United States living below the poverty line than African- American persons living below the poverty line.

Luck is more likely to influence incomes in the short run than in the long run.

As a determinant of a person's income, luck is more important in the __________ run, as continuous reoccurrences of one kind of luck are __________.

The Gini coefficient is computed by dividing the

Economists often assert that a person who receives an in-kind transfer payment (from government) has a higher income as a result. But an in-kind transfer is not money income, so what are economists thinking?

If the Gini coefficient is 1, there is

The Lorenz curve and the line of perfect income equality will be one and the same in an economy if 20% of all households receive 20% of all income.

An individual's income equals

The practice of companies promoting from within is on the decline, possibly because of less regulated, increasingly competitive product markets.

A Gini coefficient of 1 means there is

A person is more likely to be poor if he or she is

Transfer payments are payments that are

It is not possible for everyone to be better off (in absolute terms) if the income distribution has become more unequal.

If a country's Gini coefficient is zero, the income distribution in the country is completely unequal.

The poverty income threshold (or poverty line) is updated each year to reflect changes in the consumer price index.

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand Theory

Prices Free Controlled and Relative

Supply Demand and Price Applications

Macroeconomic Measurements Part I Prices and Unemployment

Macroeconomic Measurements Part II Gdp and Real Gdp

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self Regulating Economy

Keynesian Macroeconomics and Economic Instability a Critique of the Self Regulating Economy

Fiscal Policy and the Federal Budget

Money Banking and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth Resources Technology Ideas and Institutions

Debates in Macroeconomics Over the Role and Effects of Government

Elasticity

Consumer Choice and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition Oligopoly and Game Theory

Government and Product Markets Antitrust and Regulation

Factor Markets With Emphasis on the Labor Market

Wages Unions and Labor

Interest Rent and Profit

Market Failure Externalities Public Goods and Asymmetric Information

Public Choice and Special Interest Group Politics

Building Theories to Explain Everyday Life From Observations to Questions to Theories to Predictions

International Trade

International Finance

The Economic Case for and Against Government Five Topics Considered

Stocks Bonds Futures and Options

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As a determinant of a person's income, luck is more important in the run, as continuous reoccurrences of one kind of luck are .