Question 1

A free market system tends to

Accepted Answer

A)  produce a fairly equal distribution of income. 
B)  pay people exactly what they are worth. 
C)  produce a relatively unequal distribution of income. 
D)  pay most people more than they are worth, at the expense of reducing firms' profits. 
A)  produce a fairly equal distribution of income. 
B)  pay people exactly what they are worth. 
C)  produce a relatively unequal distribution of income. 
D)  pay most people more than they are worth, at the expense of reducing firms' profits.

Question 2

If you fall short of a certain minimum standard of living, you are poor; once you pass this standard, you are no longer poor.This refers to the ____ definition of poverty.

Accepted Answer

A)  average 
B)  absolute 
C)  relative 
D)  threshold 
A)  average 
B)  absolute 
C)  relative 
D)  threshold

Question 3

Schooling and other types of training

Accepted Answer

A)  are regarded as investment in human capital. 
B)  are an important cause of income differentials. 
C)  involve workers' sacrificing current income in order to enjoy higher future income. 
D)  All of the above are correct. 
A)  are regarded as investment in human capital. 
B)  are an important cause of income differentials. 
C)  involve workers' sacrificing current income in order to enjoy higher future income. 
D)  All of the above are correct.

Question 4

In 2009 what percentage of total income in the U.S.was earned by the richest fifth of all U.S.households?

Accepted Answer

A)  30% 
B)  50% 
C)  70% 
D)  90% 
A)  30% 
B)  50% 
C)  70% 
D)  90%

Question 5

Which of the following countries has the most equal income distribution?

Accepted Answer

A)  Sweden 
B)  Japan 
C)  United States 
D)  Netherlands 
A)  Sweden 
B)  Japan 
C)  United States 
D)  Netherlands

Question 6

The relative concept of poverty means that poverty will never be eliminated.

Accepted Answer

A) True 
 B)False

Question 7

It is not optimal to have equal incomes.

Accepted Answer

A) True 
 B)False

Question 8

Discrimination exists when a man and a woman with the same levels of education earn different incomes.

Accepted Answer

A) True 
 B)False

Question 9

The concept of poverty is culturally determined, and hence people are defined as "poor" in relation to others.

Accepted Answer

A) True 
 B)False

Question 10

Under current federal antipoverty programs,

Accepted Answer

A)  economic equality is promoted at the least possible cost in economic efficiency. 
B)  a family's benefits do not depend on its earnings from work. 
C)  a family's total income (cash and in-kind benefits) may actually fall if its earnings from work rise. 
D)  families with children are entitled to no more assistance than families without children. 
A)  economic equality is promoted at the least possible cost in economic efficiency. 
B)  a family's benefits do not depend on its earnings from work. 
C)  a family's total income (cash and in-kind benefits) may actually fall if its earnings from work rise. 
D)  families with children are entitled to no more assistance than families without children.

Question 11

In the negative income tax plan, a guarantee of $5,000 and a tax rate of 50 percent imply a break-even income of which of the following figures?

Accepted Answer

A)  $1,000 
B)  $2,500 
C)  $10,000 
D)  $12,500 
A)  $1,000 
B)  $2,500 
C)  $10,000 
D)  $12,500

Question 12

Which of the following is not a source of inequality in incomes?

Accepted Answer

A)  redistribution of income 
B)  differences in intensity of work 
C)  differences in ability 
D)  risk taking 
A)  redistribution of income 
B)  differences in intensity of work 
C)  differences in ability 
D)  risk taking

Question 13

Under a relative concept of poverty, poverty

Accepted Answer

A)  doesn't really exist. 
B)  is higher in rich countries than in poor countries. 
C)  can never be wholly eliminated by public policy. 
D)  declines as technology advances. 
A)  doesn't really exist. 
B)  is higher in rich countries than in poor countries. 
C)  can never be wholly eliminated by public policy. 
D)  declines as technology advances.

Question 14

Which of the following best describes compensating wage differentials?

Accepted Answer

A)  Some jobs are more difficult than others, and the pay for them reflects this. 
B)  Some jobs require more training than others, and the pay for them reflects this. 
C)  Some jobs require more experience than others, and the pay for them reflects this. 
D)  Some jobs require unique abilities, and the pay for them reflects this. 
A)  Some jobs are more difficult than others, and the pay for them reflects this. 
B)  Some jobs require more training than others, and the pay for them reflects this. 
C)  Some jobs require more experience than others, and the pay for them reflects this. 
D)  Some jobs require unique abilities, and the pay for them reflects this.

Question 15

In labor markets, risk taking accounts for some income differences.

Accepted Answer

A) True 
 B)False

Question 16

The total amount of income in a society is independent of how income is distributed.

Accepted Answer

A) True 
 B)False

Question 17

Is wage discrimination more likely in competitive or monopolistic markets?

Accepted Answer

Competitive firms that discriminate may

Question 18

The distribution of income in the United States

Accepted Answer

A)  became slightly more equal during the 1980s. 
B)  did not change significantly during the 1980s. 
C)  has become more unequal since 1980. 
D)  has become more equal since 1980. 
A)  became slightly more equal during the 1980s. 
B)  did not change significantly during the 1980s. 
C)  has become more unequal since 1980. 
D)  has become more equal since 1980.

Question 19

Economic discrimination and prejudice

Accepted Answer

A)  are synonymous. 
B)  must both exist in statistical discrimination. 
C)  often occur together. 
D)  are mutually exclusive. 
A)  are synonymous. 
B)  must both exist in statistical discrimination. 
C)  often occur together. 
D)  are mutually exclusive.

Question 20

About what percentage of the poor are children?

Accepted Answer

A)  13 
B)  25 
C)  35 
D)  60 
A)  13 
B)  25 
C)  35 
D)  60

Exam 21: Poverty, Inequality, and Discrimination

A free market system tends to

If you fall short of a certain minimum standard of living, you are poor; once you pass this standard, you are no longer poor.This refers to the ____ definition of poverty.

Schooling and other types of training

In 2009 what percentage of total income in the U.S.was earned by the richest fifth of all U.S.households?

Which of the following countries has the most equal income distribution?

The relative concept of poverty means that poverty will never be eliminated.

It is not optimal to have equal incomes.

Discrimination exists when a man and a woman with the same levels of education earn different incomes.

The concept of poverty is culturally determined, and hence people are defined as "poor" in relation to others.

Under current federal antipoverty programs,

In the negative income tax plan, a guarantee of $5,000 and a tax rate of 50 percent imply a break-even income of which of the following figures?

Which of the following is not a source of inequality in incomes?

Under a relative concept of poverty, poverty

Which of the following best describes compensating wage differentials?

In labor markets, risk taking accounts for some income differences.

The total amount of income in a society is independent of how income is distributed.

Is wage discrimination more likely in competitive or monopolistic markets?

The distribution of income in the United States

Economic discrimination and prejudice

About what percentage of the poor are children?

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: The Importance of Marginal Analysis

Securities: Business Finance, and the Economy: The Tail that Wags the Dog?

The Firm and the Industry under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets I: The Price System

The Shortcomings of Free Markets

The Market's Prime Achievement: Innovation and Growth

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: The Human Inputs

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

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