Question 1

The lowest quintile of households in the income distribution (as of 2014) receives about

Accepted Answer

A) 2.4 percent of the total income. 
B) 3.1 percent of the total income. 
C) 8.2 percent of the total income. 
D) 10 percent of the total income.Difficulty: 02 Medium 
A) 2.4 percent of the total income. 
B) 3.1 percent of the total income. 
C) 8.2 percent of the total income. 
D) 10 percent of the total income.Difficulty: 02 Medium

Question 2

Social insurance is distinguished from public assistance, or welfare, by the fact that

Accepted Answer

A) all social insurance benefits are paid in cash, while all public assistance benefits are paid in kind (food, housing, medical care). 
B) an individual acquires a right to social insurance benefits by meeting objective eligibility criteria, while public assistance benefits are determined according to individual need. 
C) the total amount paid in benefits is much larger in the public assistance programs than in the social insurance programs. 
D) payroll taxes are used to finance public assistance programs, while general revenues are used to finance social insurance programs. 
A) all social insurance benefits are paid in cash, while all public assistance benefits are paid in kind (food, housing, medical care). 
B) an individual acquires a right to social insurance benefits by meeting objective eligibility criteria, while public assistance benefits are determined according to individual need. 
C) the total amount paid in benefits is much larger in the public assistance programs than in the social insurance programs. 
D) payroll taxes are used to finance public assistance programs, while general revenues are used to finance social insurance programs.

Question 3

During the past 35 years or so, the degree of income inequality in the United States has decreased considerably.

Accepted Answer

A) True 
 B)False

Question 4

Reasons for the growing income inequality in the United States since 1975 include the following, except

Accepted Answer

A) a shift in labor demand toward highly skilled and better-educated workers. 
B) the entrance of larger numbers of less-experienced, less-skilled workers into the workforce. 
C) an increase in the number of households headed by single or divorced women. 
D) the decline of unionism in the U.S.workforce. 
A) a shift in labor demand toward highly skilled and better-educated workers. 
B) the entrance of larger numbers of less-experienced, less-skilled workers into the workforce. 
C) an increase in the number of households headed by single or divorced women. 
D) the decline of unionism in the U.S.workforce.

Question 5

In a labor market generally biased against Hispanics, a reduction in the collective discrimination coefficients of employers will

Accepted Answer

A) reduce the Hispanic wage rate, increase Hispanic employment, and lower the actual Hispanic-white wage ratio. 
B) reduce the Hispanic wage rate, decrease Hispanic employment, and lower the actual Hispanic-white wage ratio. 
C) increase the Hispanic wage rate, increase Hispanic employment, and increase the actual Hispanic-white wage ratio. 
D) increase the Hispanic wage rate, reduce Hispanic employment, and increase the actual Hispanic-white wage ratio. 
A) reduce the Hispanic wage rate, increase Hispanic employment, and lower the actual Hispanic-white wage ratio. 
B) reduce the Hispanic wage rate, decrease Hispanic employment, and lower the actual Hispanic-white wage ratio. 
C) increase the Hispanic wage rate, increase Hispanic employment, and increase the actual Hispanic-white wage ratio. 
D) increase the Hispanic wage rate, reduce Hispanic employment, and increase the actual Hispanic-white wage ratio.

Question 6

(Consider This) A "welfare cliff" refers to a situation where

Accepted Answer

A) falling welfare benefits increase suicide rates. 
B) a welfare recipient's total income falls if they earn more money from work. 
C) government support for income assistance falls when the unemployment rate falls below a preset value. 
D) welfare benefits are withdrawn when a recipient hits the five-year program limit. 
A) falling welfare benefits increase suicide rates. 
B) a welfare recipient's total income falls if they earn more money from work. 
C) government support for income assistance falls when the unemployment rate falls below a preset value. 
D) welfare benefits are withdrawn when a recipient hits the five-year program limit.

Question 7

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. 
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.

Question 8

Which of the following is correct?

Accepted Answer

A) Income is a stock concept, 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 concept, and wealth is a stock concept. 
A) Income is a stock concept, 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 concept, and wealth is a stock concept.

Question 9

In the U.S.in 2010, the top 1 percent of households held 35 percent of total wealth, leaving 65 percent of wealth to the remaining 99 percent of households.

Accepted Answer

A) True 
 B)False

Question 10

One cause of income inequality in the United States is

Accepted Answer

A) the free public school system. 
B) differences in preferences for market work relative to nonmarket activities as well as differences in preferences for types of work. 
C) antidiscrimination laws. 
D) a system of taxes and government transfers that redistributes income away from the lowest earners. 
A) the free public school system. 
B) differences in preferences for market work relative to nonmarket activities as well as differences in preferences for types of work. 
C) antidiscrimination laws. 
D) a system of taxes and government transfers that redistributes income away from the lowest earners.

Question 11

Suppose the members of population A, consisting of Al, Bob, Curt, Doris, and Ellie, receive annual incomes of $5,000, $2,500, $1,250, $750, and $500, respectively.What percentage of total income is received by the lowest 60 percent of the income receivers in population A?

Accepted Answer

A) 60 
B) 50 
C) 25 
D) 20 
A) 60 
B) 50 
C) 25 
D) 20

Question 12

One basic argument for redistributing income to achieve more equality rests on the idea of maximizing the society's total utility when there is diminishing marginal utility from income.

Accepted Answer

A) True 
 B)False

Question 13

The crowding of women and minorities into a restricted number of occupations

Accepted Answer

A) has no effect on the size of the domestic output or its distribution in the long run. 
B) will increase the size of the domestic output and make its distribution more equal. 
C) will decrease the size of the domestic output and make its distribution less equal. 
D) will increase the size of the domestic output but make its distribution less equal. 
A) has no effect on the size of the domestic output or its distribution in the long run. 
B) will increase the size of the domestic output and make its distribution more equal. 
C) will decrease the size of the domestic output and make its distribution less equal. 
D) will increase the size of the domestic output but make its distribution less equal.

Question 14

Suppose that a prejudiced African-American employer has a discrimination coefficient of $5/hour.Suppose also that the market wage rate is $20/hour for African- American workers, and $18/hour for Hispanic workers.In this case, the employer will

Accepted Answer

A) hire Hispanic workers 
B) not hire Hispanic workers unless their wage rate falls to $5/hour. 
C) not hire Hispanic workers regardless of wage rate. 
D) not hire Hispanic workers unless their wage rate falls to $15/hour. 
A) hire Hispanic workers 
B) not hire Hispanic workers unless their wage rate falls to $5/hour. 
C) not hire Hispanic workers regardless of wage rate. 
D) not hire Hispanic workers unless their wage rate falls to $15/hour.

Question 15

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 
A) age 65 or over 
B) foreign-born (not citizens) 
C) Hispanics 
D) female-headed households

Question 16

In the United States since 1975, the poor have gotten poorer and the rich have gotten richer in both relative and absolute terms.

Accepted Answer

A) True 
 B)False

Question 17

A major criticism of the welfare system that led to reforms in the mid-1990s is that welfare payments

Accepted Answer

A) encourage overuse of the medical system. 
B) create dependency on government programs. 
C) give strong incentives for people to change jobs. 
D) fail to provide a minimum income for young children. 
A) encourage overuse of the medical system. 
B) create dependency on government programs. 
C) give strong incentives for people to change jobs. 
D) fail to provide a minimum income for young children.

Question 18

Two major criticisms of the Bureau of Census data as a portrayal of the degree of income inequality are that the income concept employed is too

Accepted Answer

A) broad and the income accounting period is too short. 
B) narrow and the income accounting period is too long. 
C) narrow and the income accounting period is too short. 
D) broad and the income accounting period is too long. 
A) broad and the income accounting period is too short. 
B) narrow and the income accounting period is too long. 
C) narrow and the income accounting period is too short. 
D) broad and the income accounting period is too long.

Question 19

Suppose the members of population A, consisting of Al, Bob, Curt, Doris, and Ellie, receive annual incomes of $5,000, $2,500, $1,250, $750, and $500, respectively.What percentage of total income is received by the richest quintile?

Accepted Answer

A) 50 
B) 5 
C) 25 
D) 20 
A) 50 
B) 5 
C) 25 
D) 20

Question 20

As applied to gender discrimination, the crowding model of occupational segregation

Accepted Answer

A) helps explain why women earn more than men. 
B) predicts that men's wages would fall and women's wages would rise if occupational segregation was eliminated. 
C) predicts that domestic output would decline if occupational segregation was ended. 
D) predicts that competition will eventually totally end discrimination. 
A) helps explain why women earn more than men. 
B) predicts that men's wages would fall and women's wages would rise if occupational segregation was eliminated. 
C) predicts that domestic output would decline if occupational segregation was ended. 
D) predicts that competition will eventually totally end discrimination.

Exam 23: Income Inequality, Poverty, and Discrimination

The lowest quintile of households in the income distribution (as of 2014) receives about

Social insurance is distinguished from public assistance, or welfare, by the fact that

During the past 35 years or so, the degree of income inequality in the United States has decreased considerably.

Reasons for the growing income inequality in the United States since 1975 include the following, except

In a labor market generally biased against Hispanics, a reduction in the collective discrimination coefficients of employers will

(Consider This) A "welfare cliff" refers to a situation where

In the United States,

Which of the following is correct?

In the U.S.in 2010, the top 1 percent of households held 35 percent of total wealth, leaving 65 percent of wealth to the remaining 99 percent of households.

One cause of income inequality in the United States is

Suppose the members of population A, consisting of Al, Bob, Curt, Doris, and Ellie, receive annual incomes of $5,000, $2,500, $1,250, $750, and $500, respectively.What percentage of total income is received by the lowest 60 percent of the income receivers in population A?

One basic argument for redistributing income to achieve more equality rests on the idea of maximizing the society's total utility when there is diminishing marginal utility from income.

The crowding of women and minorities into a restricted number of occupations

Suppose that a prejudiced African-American employer has a discrimination coefficient of $5/hour.Suppose also that the market wage rate is $20/hour for African- American workers, and $18/hour for Hispanic workers.In this case, the employer will

Which of the following groups has the highest poverty rate?

In the United States since 1975, the poor have gotten poorer and the rich have gotten richer in both relative and absolute terms.

A major criticism of the welfare system that led to reforms in the mid-1990s is that welfare payments

Two major criticisms of the Bureau of Census data as a portrayal of the degree of income inequality are that the income concept employed is too

Suppose the members of population A, consisting of Al, Bob, Curt, Doris, and Ellie, receive annual incomes of $5,000, $2,500, $1,250, $750, and $500, respectively.What percentage of total income is received by the richest quintile?

As applied to gender discrimination, the crowding model of occupational segregation

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