Question 1

The wages and salaries that people earn differ partly because of differences in

Accepted Answer

A) wealth. 
B) ability. 
C) Social Security payments. 
D) in-kind transfer payments. 
A) wealth. 
B) ability. 
C) Social Security payments. 
D) in-kind transfer payments.

Question 2

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. 
A) fallen, thereby increasing income inequality. 
B) increased, thereby increasing income inequality. 
C) remained constant. 
D) increased, thereby decreasing income inequality.

Question 3

The taste-for-discrimination model examines an employer's prejudice and discrimination in hiring by using tools of

Accepted Answer

A) demand theory. 
B) theory of costs. 
C) production theory. 
D) profit theory. 
A) demand theory. 
B) theory of costs. 
C) production theory. 
D) profit theory.

Question 4

Some economists have criticized standard government figures on income inequality, arguing that these data

Accepted Answer

A) exclude households whose earnings arise in the public sector. 
B) conceal the strong trend toward greater equality in household sizes. 
C) conceal the growth of poverty due to a growing number of discouraged workers. 
D) overstate the degree of income inequality by failing to include noncash transfers as income. 
A) exclude households whose earnings arise in the public sector. 
B) conceal the strong trend toward greater equality in household sizes. 
C) conceal the growth of poverty due to a growing number of discouraged workers. 
D) overstate the degree of income inequality by failing to include noncash transfers as income.

Question 5

In 2014, the percentage of the total U.S.population that lived in poverty was approximately

Accepted Answer

A) 5 percent. 
B) 10 percent. 
C) 15 percent. 
D) 20 percent. 
A) 5 percent. 
B) 10 percent. 
C) 15 percent. 
D) 20 percent.

Question 6

Which of the following would likely reduce income inequality?

Accepted Answer

A) a reduction in the number of high school dropouts 
B) a reduction in Social Security benefits 
C) greater inequality in the distribution of wealth 
D) more stringent requirements to obtain occupational licenses 
A) a reduction in the number of high school dropouts 
B) a reduction in Social Security benefits 
C) greater inequality in the distribution of wealth 
D) more stringent requirements to obtain occupational licenses

Question 7

The Gini ratio, or Gini coefficient, is a measure of the

Accepted Answer

A) inflationary gap. 
B) recessionary gap. 
C) number of households that are classified as being poor. 
D) degree of income inequality. 
A) inflationary gap. 
B) recessionary gap. 
C) number of households that are classified as being poor. 
D) degree of income inequality.

Question 8

Suppose Gigantic Health Cooperative doesn't hire Mandy Morrison solely because she is a graduate of a particular foreign medical school, which is not known for the high quality of its graduates.Yet Mandy is actually more qualified than the average graduate of American medical schools.This is an example of

Accepted Answer

A) monopsony exploitation. 
B) human-capital discrimination. 
C) statistical discrimination. 
D) irrational behavior. 
A) monopsony exploitation. 
B) human-capital discrimination. 
C) statistical discrimination. 
D) irrational behavior.

Question 9

The primary purpose of Social Security is to

Accepted Answer

A) subsidize families in need. 
B) offset the progressiveness of the personal income tax. 
C) provide income for workers who are temporarily unemployed. 
D) provide income for retired and disabled workers. 
A) subsidize families in need. 
B) offset the progressiveness of the personal income tax. 
C) provide income for workers who are temporarily unemployed. 
D) provide income for retired and disabled workers.

Question 10

In 2014, a household with an annual income of $75,000 would find itself in the

Accepted Answer

A) second lowest quintile of the household income distribution. 
B) third quintile of the household income distribution. 
C) fourth quintile of the household income distribution. 
D) fifth (highest) quintile of the household income distribution. 
A) second lowest quintile of the household income distribution. 
B) third quintile of the household income distribution. 
C) fourth quintile of the household income distribution. 
D) fifth (highest) quintile of the household income distribution.

Question 11

If income inequality is increasing, it means that the income levels of the poor are falling while the income levels of the rich are rising.

Accepted Answer

A) True 
 B)False

Question 12

The exercise of market power by suppliers in resource markets tends to

Accepted Answer

A) reduce income inequality, ensuring that all workers receive fair wages. 
B) have little impact on the distribution of income. 
C) increase income inequality by raising incomes of those able to "rig the market." 
D) increase income inequality but is offset by the exercise of market power in product markets. 
A) reduce income inequality, ensuring that all workers receive fair wages. 
B) have little impact on the distribution of income. 
C) increase income inequality by raising incomes of those able to "rig the market." 
D) increase income inequality but is offset by the exercise of market power in product markets.

Question 13

Insurance companies require male drivers under age 25 to pay higher insurance rates than female drivers under age 25.Craig Raymond, however, is a safer driver than the average female driver under age 25.Craig's higher insurance rate reflects

Accepted Answer

A) monopoly power. 
B) statistical discrimination. 
C) the insurance firm's taste for discrimination. 
D) human-capital discrimination. 
A) monopoly power. 
B) statistical discrimination. 
C) the insurance firm's taste for discrimination. 
D) human-capital discrimination.

Question 14

Some economists prefer to look at the distribution of consumption rather than that of income.A Review of Economic Studies article in 2006 reported that consumption inequality in the U.S.is

Accepted Answer

A) about the same as the income inequality. 
B) worse than the income inequality. 
C) less severe than the income inequality. 
D) highly unstable from one year to the next. 
A) about the same as the income inequality. 
B) worse than the income inequality. 
C) less severe than the income inequality. 
D) highly unstable from one year to the next.

Question 15

Social Security payments are primarily made to assist

Accepted Answer

A) families with dependent children. 
B) families affected by natural disasters. 
C) retired and disabled workers. 
D) unemployed workers. 
A) families with dependent children. 
B) families affected by natural disasters. 
C) retired and disabled workers. 
D) unemployed workers.

Question 16

In the taste-for-discrimination model, a prejudiced employer who prefers white workers and who has a discrimination coefficient of $3/hour would still hire
African-Americans if the market wage rate were $22/hour for white workers and $20/hour for African Americans.

Accepted Answer

A) True 
 B)False

Question 17

Each of the following contributes to income inequality except

Accepted Answer

A) differences in ability and training. 
B) differences in job tastes. 
C) differences in wealth ownership. 
D) government transfers. 
A) differences in ability and training. 
B) differences in job tastes. 
C) differences in wealth ownership. 
D) government transfers.

Question 18

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. 
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.

Question 19

Medicaid

Accepted Answer

A) helps finance medical expenses for those participating in the TANF and Supplemental Security Income programs. 
B) has been abandoned in favor of privately provided medical insurance. 
C) is a program of medical insurance for the aged and retired. 
D) is a compulsory national health insurance program that only covers preventative medical services. 
A) helps finance medical expenses for those participating in the TANF and Supplemental Security Income programs. 
B) has been abandoned in favor of privately provided medical insurance. 
C) is a program of medical insurance for the aged and retired. 
D) is a compulsory national health insurance program that only covers preventative medical services.

Question 20

The distribution of wealth in the United States is such that it

Accepted Answer

A) is randomly distributed among income classes. 
B) has no perceptible impact on the distribution of income. 
C) reduces income inequality. 
D) contributes to income inequality. 
A) is randomly distributed among income classes. 
B) has no perceptible impact on the distribution of income. 
C) reduces income inequality. 
D) contributes to income inequality.

Exam 23: Income Inequality, Poverty, and Discrimination

The wages and salaries that people earn differ partly because of differences in

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

The taste-for-discrimination model examines an employer's prejudice and discrimination in hiring by using tools of

Some economists have criticized standard government figures on income inequality, arguing that these data

In 2014, the percentage of the total U.S.population that lived in poverty was approximately

Which of the following would likely reduce income inequality?

The Gini ratio, or Gini coefficient, is a measure of the

The primary purpose of Social Security is to

In 2014, a household with an annual income of $75,000 would find itself in the

If income inequality is increasing, it means that the income levels of the poor are falling while the income levels of the rich are rising.

The exercise of market power by suppliers in resource markets tends to

Insurance companies require male drivers under age 25 to pay higher insurance rates than female drivers under age 25.Craig Raymond, however, is a safer driver than the average female driver under age 25.Craig's higher insurance rate reflects

Some economists prefer to look at the distribution of consumption rather than that of income.A Review of Economic Studies article in 2006 reported that consumption inequality in the U.S.is

Social Security payments are primarily made to assist

In the taste-for-discrimination model, a prejudiced employer who prefers white workers and who has a discrimination coefficient of $3/hour would still hire African-Americans if the market wage rate were $22/hour for white workers and $20/hour for African Americans.

Each of the following contributes to income inequality except

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

Medicaid

The distribution of wealth in the United States is such that it

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

Filters