Question 1

Aid to families with dependent children was

Accepted Answer

A) a close-to-perfect welfare or public assistance program. 
B) criticized because it provided little incentive for recipients to get jobs. 
C) contributing to efficient production of goods. 
D) superior to a negative income tax for work incentives. 
A) a close-to-perfect welfare or public assistance program. 
B) criticized because it provided little incentive for recipients to get jobs. 
C) contributing to efficient production of goods. 
D) superior to a negative income tax for work incentives.

Question 2

Competitive forces will reduce the effects of employers' discrimination over time.

Accepted Answer

A) True 
 B)False

Question 3

An employer who refuses to hire women because of the chance they may quit for childbearing purposes is engaging in statistical discrimination.

Accepted Answer

A) True 
 B)False

Question 4

Official data may overstate the extent of poverty because

Accepted Answer

A) poverty is a relative concept as opposed to an absolute concept. 
B) it does not add "in-kind" transfers to the incomes of the poor. 
C) it overstates the taxes paid by the poor. 
D) it overestimates the amount the poor earn in the "underground economy." 
A) poverty is a relative concept as opposed to an absolute concept. 
B) it does not add "in-kind" transfers to the incomes of the poor. 
C) it overstates the taxes paid by the poor. 
D) it overestimates the amount the poor earn in the "underground economy."

Question 5

Suppose that a negative income tax was created that set a minimum income for a family of $5,000 per year and had a marginal tax rate of 33 percent.What is the break-even level of income? If a person earned $5,000, what would the after-tax income level be? If the earnings were $10,000, what would the after-tax income be?

Accepted Answer

The break-even level of income is $15,00

Question 6

Which of the following situations is the most common? Men and women

Accepted Answer

A) doing the same job and getting equal pay. 
B) doing the same job and getting unequal pay. 
C) doing very different kinds of work and consequently having different earnings. 
D) randomly distributed across occupations with average earnings about equal. 
A) doing the same job and getting equal pay. 
B) doing the same job and getting unequal pay. 
C) doing very different kinds of work and consequently having different earnings. 
D) randomly distributed across occupations with average earnings about equal.

Question 7

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 8

The official dividing line between the poor and nonpoor is called the

Accepted Answer

A) life threshold. 
B) life edge. 
C) poverty line. 
D) beginning line. 
A) life threshold. 
B) life edge. 
C) poverty line. 
D) beginning line.

Question 9

In the Santa Rita silver mines in Arizona in 1870, Mexican miners received about $12 per month, while "American" miners received $70.Although the wages of both groups tended to rise over time, the gap persisted until at least 1910.Mexican and American miners did the same work and were equally productive.Economists call this pay differential as

Accepted Answer

A) prejudicial differentials. 
B) compensating differentials. 
C) economic discrimination. 
D) Lorenz discrimination. 
A) prejudicial differentials. 
B) compensating differentials. 
C) economic discrimination. 
D) Lorenz discrimination.

Question 10

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 11

The poor are those who fall too far behind the average income.This refers to the ____ definition of poverty.

Accepted Answer

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

Question 12

The economic theory of discrimination suggests that the practice of apartheid in South Africa should have

Accepted Answer

A) worsened the economic condition of only the blacks. 
B) worsened the economic condition of only the whites. 
C) worsened the economic condition of blacks, whites, and others. 
D) improved the economic condition of the whites. 
A) worsened the economic condition of only the blacks. 
B) worsened the economic condition of only the whites. 
C) worsened the economic condition of blacks, whites, and others. 
D) improved the economic condition of the whites.

Question 13

A tax is more likely to promote economic equality if it is

Accepted Answer

A) regressive. 
B) proportional. 
C) indirect. 
D) progressive. 
A) regressive. 
B) proportional. 
C) indirect. 
D) progressive.

Question 14

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 15

Under a system of free, competitive markets,

Accepted Answer

A) a society can usually achieve efficiency only at the expense of equality. 
B) poverty cannot exist in the long run. 
C) employers do not practice statistical discrimination. 
D) income is distributed equally across the population. 
A) a society can usually achieve efficiency only at the expense of equality. 
B) poverty cannot exist in the long run. 
C) employers do not practice statistical discrimination. 
D) income is distributed equally across the population.

Question 16

How is the dividing line between poverty and nonpoverty measured? Does this method overstate the degree of poverty?

Accepted Answer

Originally, the poverty line was establi

Question 17

In 2017, an income of $125,000 would, roughly, make a family

Accepted Answer

A) richer than 40 percent of U.S.households but poorer than 35 percent. 
B) richer than 50 percent of U.S.households but poorer than 25 percent. 
C) richer than 85 percent of U.S.households but poorer than 8 percent. 
D) richer than 95 percent of U.S.households but poorer than 1 percent. 
A) richer than 40 percent of U.S.households but poorer than 35 percent. 
B) richer than 50 percent of U.S.households but poorer than 25 percent. 
C) richer than 85 percent of U.S.households but poorer than 8 percent. 
D) richer than 95 percent of U.S.households but poorer than 1 percent.

Question 18

In their 1994 book, The Bell Curve, Murray and Herrnstein presented evidence that IQ is an important determinant of economic success.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

The Earned Income Tax Credit (EITC) is a more efficient means to redistribute income to people below the poverty line than direct cash transfers.

Accepted Answer

A) True 
 B)False

Exam 20: Poverty, Inequality, and Discrimination

Aid to families with dependent children was

Competitive forces will reduce the effects of employers' discrimination over time.

An employer who refuses to hire women because of the chance they may quit for childbearing purposes is engaging in statistical discrimination.

Official data may overstate the extent of poverty because

Which of the following situations is the most common? Men and women

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

The official dividing line between the poor and nonpoor is called the

Under a relative concept of poverty, poverty

The poor are those who fall too far behind the average income.This refers to the ____ definition of poverty.

The economic theory of discrimination suggests that the practice of apartheid in South Africa should have

A tax is more likely to promote economic equality if it is

A free market system tends to

Under a system of free, competitive markets,

How is the dividing line between poverty and nonpoverty measured? Does this method overstate the degree of poverty?

In 2017, an income of $125,000 would, roughly, make a family

In their 1994 book, The Bell Curve, Murray and Herrnstein presented evidence that IQ is an important determinant of economic success.

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

The Earned Income Tax Credit (EITC) is a more efficient means to redistribute income to people below the poverty line than direct cash transfers.

What Is Economics

The Economony: 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

The Financial Markets and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

The Case for Free Markets: the Price System

Monopoly

Between Competition and Monopoly

Limiting Market Power: Antitrust and Regulation

The Shortcomings of Free Markets

The Economics of 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

Contemporary Issues in the Useconomy

Filters