Question 1

Which of the following was NOT mentioned in the textbook as a possible factor in increasing income inequality in the United States since 1968?

Accepted Answer

A)  increases in immigration 
B)  growth in international trade 
C)  technological change 
D)  a reduction in the number of people attending college 
A)  increases in immigration 
B)  growth in international trade 
C)  technological change 
D)  a reduction in the number of people attending college D

Question 2

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. D

Question 3

What are some of the causes of poverty in the United States?

Accepted Answer

Lack of education is a primary cause of poverty. People with little education are more likely to find themselves in poverty than people with more education. Poor language skills also play a role. Immigrants with limited English are also more likely to be in poverty. Because minorities and women are more likely to be in poverty than Whites and men, discrimination cannot be ruled out as a possible cause. In addition, some people fall into poverty as a result of an unfortunate random event like a serious illness.

Question 4

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 5

_____ is a means-tested program.

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 6

There is considerable _____ among the quintiles of the distribution of income, with many families moving from _____ quintiles and others moving from _____ quintiles.

Accepted Answer

A)  immobility; lower to higher; higher to lower 
B)  mobility; higher to lower; lower to higher 
C)  immobility; lower to even lower; higher to even higher 
D)  stability; lower to higher; higher to higher 
A)  immobility; lower to higher; higher to lower 
B)  mobility; higher to lower; lower to higher 
C)  immobility; lower to even lower; higher to even higher 
D)  stability; lower to higher; higher to higher

Question 7

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 8

The notch problem occurs when a poor family that has been receiving aid:

Accepted Answer

A)  has an increase in earnings that reduces means-tested aid from programs, hence reduces their combined incomes. 
B)  finds that it no longer needs aid but is unable to refuse it. 
C)  is unable to receive more aid when its earnings fall even lower. 
D)  faces lower marginal tax rates on additional earnings. 
A)  has an increase in earnings that reduces means-tested aid from programs, hence reduces their combined incomes. 
B)  finds that it no longer needs aid but is unable to refuse it. 
C)  is unable to receive more aid when its earnings fall even lower. 
D)  faces lower marginal tax rates on additional earnings.

Question 9

Most Americans receive their health insurance through:

Accepted Answer

A)  Medicare. 
B)  Medicaid. 
C)  their employer. 
D)  direct purchase. 
A)  Medicare. 
B)  Medicaid. 
C)  their employer. 
D)  direct purchase.

Question 10

Compared to a generation ago, benefits from public aid programs, adjusted for inflation, are:

Accepted Answer

A)  zero. 
B)  less. 
C)  more. 
D)  about the same. 
A)  zero. 
B)  less. 
C)  more. 
D)  about the same.

Question 11

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 12

If a nation's Gini coefficient is rising over time, it is an indicator of:

Accepted Answer

A)  an increase in the poverty rate. 
B)  a decrease in the poverty rate. 
C)  an increase in income inequality. 
D)  a decrease in income inequality. 
A)  an increase in the poverty rate. 
B)  a decrease in the poverty rate. 
C)  an increase in income inequality. 
D)  a decrease in income inequality.

Question 13

Which of the following programs provides in-kind transfers?

Accepted Answer

A)  the Earned Income Tax Credit 
B)  Temporary Assistance for Needy Families 
C)  Social Security 
D)  Medicaid 
A)  the Earned Income Tax Credit 
B)  Temporary Assistance for Needy Families 
C)  Social Security 
D)  Medicaid

Question 14

Among the following, which factor 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 15

Programs associated with the welfare state are believed to cause deadweight loss, since they:

Accepted Answer

A)  affect the amount of disposable income that households below the poverty line have to spend. 
B)  affect incentives to work and to save. 
C)  are supported by many political parties. 
D)  are based on the ability-to-pay principle. 
A)  affect the amount of disposable income that households below the poverty line have to spend. 
B)  affect incentives to work and to save. 
C)  are supported by many political parties. 
D)  are based on the ability-to-pay principle.

Question 16

America's Gini coefficient is _____ than that of most _____.

Accepted Answer

A)  higher; developing nations 
B)  higher; other wealthy nations 
C)  just a little lower; other wealthy nations 
D)  no lower; developing nations 
A)  higher; developing nations 
B)  higher; other wealthy nations 
C)  just a little lower; other wealthy nations 
D)  no lower; developing nations

Question 17

_____ is (are) a means-tested monetary benefit in in a welfare program.

Accepted Answer

A)  Food stamps 
B)  Medicaid 
C)  Temporary Assistance for Needy Families 
D)  Unemployment insurance 
A)  Food stamps 
B)  Medicaid 
C)  Temporary Assistance for Needy Families 
D)  Unemployment insurance

Question 18

The poverty threshold depends upon:

Accepted Answer

A)  only the major wage earner's annual income. 
B)  the size and composition of a family. 
C)  only the size of the family. 
D)  only the composition of the family. 
A)  only the major wage earner's annual income. 
B)  the size and composition of a family. 
C)  only the size of the family. 
D)  only the composition of the family.

Question 19

A factor that has been associated with the increase in income inequality in the United States is:

Accepted Answer

A)  the growth in technology. 
B)  the reduction in the percentage of the population over the age of 65. 
C)  the smaller gap between the wages of skilled and unskilled workers. 
D)  affirmative action programs. 
A)  the growth in technology. 
B)  the reduction in the percentage of the population over the age of 65. 
C)  the smaller gap between the wages of skilled and unskilled workers. 
D)  affirmative action programs.

Question 20

Among the reasons for a welfare state is a desire to alleviate income inequality and to:

Accepted Answer

A)  achieve economic equality for all households. 
B)  eliminate poverty. 
C)  alleviate economic insecurity. 
D)  maintain economic fairness. 
A)  achieve economic equality for all households. 
B)  eliminate poverty. 
C)  alleviate economic insecurity. 
D)  maintain economic fairness.

Which of the following was NOT mentioned in the textbook as a possible factor in increasing income inequality in the United States since 1968?

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

What are some of the causes of poverty in the United States?

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

_____ is a means-tested program.

There is considerable ___ among the quintiles of the distribution of income, with many families moving from _ quintiles and others moving from ___ quintiles.

Programs that are not means-tested:

The notch problem occurs when a poor family that has been receiving aid:

Most Americans receive their health insurance through:

Compared to a generation ago, benefits from public aid programs, adjusted for inflation, are:

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

If a nation's Gini coefficient is rising over time, it is an indicator of:

Which of the following programs provides in-kind transfers?

Among the following, which factor has been associated with the increase in income inequality in the United States?

Programs associated with the welfare state are believed to cause deadweight loss, since they:

America's Gini coefficient is _ than that of most _.

_____ is (are) a means-tested monetary benefit in in a welfare program.

The poverty threshold depends upon:

A factor that has been associated with the increase in income inequality in the United States is:

Among the reasons for a welfare state is a desire to alleviate income inequality and to:

First Principles

Economic Models: Trade-Offs and Trade 25

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals 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 Common Resources

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Filters

Exam 18: The Economics of the Welfare

Which of the following was NOT mentioned in the textbook as a possible factor in increasing income inequality in the United States since 1968?

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

What are some of the causes of poverty in the United States?

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

_____ is a means-tested program.

There is considerable _____ among the quintiles of the distribution of income, with many families moving from _____ quintiles and others moving from _____ quintiles.

Programs that are not means-tested:

The notch problem occurs when a poor family that has been receiving aid:

Most Americans receive their health insurance through:

Compared to a generation ago, benefits from public aid programs, adjusted for inflation, are:

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

If a nation's Gini coefficient is rising over time, it is an indicator of:

Which of the following programs provides in-kind transfers?

Among the following, which factor has been associated with the increase in income inequality in the United States?

Programs associated with the welfare state are believed to cause deadweight loss, since they:

America's Gini coefficient is _____ than that of most _____.

_____ is (are) a means-tested monetary benefit in in a welfare program.

The poverty threshold depends upon:

A factor that has been associated with the increase in income inequality in the United States is:

Among the reasons for a welfare state is a desire to alleviate income inequality and to:

First Principles

Economic Models: Trade-Offs and Trade 25

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals 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 Common Resources

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Filters

There is considerable ___ among the quintiles of the distribution of income, with many families moving from _ quintiles and others moving from ___ quintiles.

America's Gini coefficient is _ than that of most _.