Question 1

Which of the following employers is the most prejudiced? Employer

Accepted Answer

A) A, whose discrimination coefficient, d, is $0. 
B) B, whose discrimination coefficient, d, is $2. 
C) C, whose discrimination coefficient, d, is $4. 
D) D, whose discrimination coefficient, d, is $6. 
A) A, whose discrimination coefficient, d, is $0. 
B) B, whose discrimination coefficient, d, is $2. 
C) C, whose discrimination coefficient, d, is $4. 
D) D, whose discrimination coefficient, d, is $6.

Question 2

In 2017, the average income for households in the United States was about

Accepted Answer

A) $61,372. 
B) $42,820. 
C) $56,610. 
D) $68,426. 
A) $61,372. 
B) $42,820. 
C) $56,610. 
D) $68,426.

Question 3

Refer to the diagram, where curves (a)through (e)are Lorenz curves for five different countries. Income is equally distributed in

Accepted Answer

A) none of the countries shown. 
B) country b. 
C) countries a and e. 
D) country a. 
A) none of the countries shown. 
B) country b. 
C) countries a and e. 
D) country a.

Question 4

What is the argument for income inequality?

Accepted Answer

The argument for income inequality makes

Question 5

Which of the following is not a major complaint about the official income data used in measuring poverty?

Accepted Answer

A) The income and poverty data are not frequently measured and released. 
B) The income data do not aptly measure purchasing power, especially in major metropolitan areas. 
C) The income data do not adequately measure households' consumption levels. 
D) The income data do not account for noncash transfers and benefits. 
A) The income and poverty data are not frequently measured and released. 
B) The income data do not aptly measure purchasing power, especially in major metropolitan areas. 
C) The income data do not adequately measure households' consumption levels. 
D) The income data do not account for noncash transfers and benefits.

Question 6

In 2017, a household with an annual income of $80,000 would find itself in the

Accepted Answer

A) second 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 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 7

Which of the following would be a significant cause of income inequality in the United States?

Accepted Answer

A) housing 
B) discrimination 
C) in-kind transfers 
D) Social Security 
A) housing 
B) discrimination 
C) in-kind transfers 
D) Social Security

Question 8

Refer to the diagram. If line (c)represents the distribution of income before taxes and transfers and line (b)represents the distribution after taxes and transfers, then taxes and transfers have

Accepted Answer

A) added to income inequality. 
B) decreased the Gini ratio. 
C) increased poverty. 
D) reduced real GDP per person. 
A) added to income inequality. 
B) decreased the Gini ratio. 
C) increased poverty. 
D) reduced real GDP per person.

Question 9

Which of the following measurement issues makes interpretation of U.S. poverty rates difficult?

Accepted Answer

A) Poverty statistics measure income rather than consumption, and some families may be able to consume above the official poverty line. 
B) The high cost of living in rural areas tends to result in the understatement of poverty. 
C) Most people below the poverty line have substantial unreported income. 
D) The poverty rate is adjusted for every urban and rural area, so people's poverty status changes whenever they move. 
A) Poverty statistics measure income rather than consumption, and some families may be able to consume above the official poverty line. 
B) The high cost of living in rural areas tends to result in the understatement of poverty. 
C) Most people below the poverty line have substantial unreported income. 
D) The poverty rate is adjusted for every urban and rural area, so people's poverty status changes whenever they move.

Question 10

The basic argument for income inequality is that

Accepted Answer

A) the very rich establish consumption patterns that are desirable for the rest of society to emulate. 
B) the rich buy luxury goods that soon become affordable to everyone else because of economies of scale. 
C) income inequality is essential to maintain incentives to produce. 
D) inequality undermines incentives and tends to reduce the size of the national income. 
A) the very rich establish consumption patterns that are desirable for the rest of society to emulate. 
B) the rich buy luxury goods that soon become affordable to everyone else because of economies of scale. 
C) income inequality is essential to maintain incentives to produce. 
D) inequality undermines incentives and tends to reduce the size of the national income.

Question 11

The basic economic argument for greater income equality is that

Accepted Answer

A) an equal distribution of income is the logical outcome of any tax-transfer program. 
B) because citizens enjoy political equality, they are also entitled to economic equality. 
C) a more equal distribution of income will tend to maximize incentives to work, invest, and assume risk. 
D) a more equal distribution of a given amount of income will increase the total utility of consumers. 
A) an equal distribution of income is the logical outcome of any tax-transfer program. 
B) because citizens enjoy political equality, they are also entitled to economic equality. 
C) a more equal distribution of income will tend to maximize incentives to work, invest, and assume risk. 
D) a more equal distribution of a given amount of income will increase the total utility of consumers.

Question 12

In Venezuela, there are a small number of extremely wealthy households and an extremely large number of very poor households. If the United States were represented in the figure by Lorenz curve c, which curve would represent Venezuela?

Accepted Answer

A) a 
B) b 
C) c 
D) d 
A) a 
B) b 
C) c 
D) d

Question 13

The highest quintile of households in the income distribution (as of 2017)

Accepted Answer

A) receives about 3 percent of the total income. 
B) comprises 10 percent of all households. 
C) receives about 52 percent of the total income. 
D) receives about 43 percent of the total income. 
A) receives about 3 percent of the total income. 
B) comprises 10 percent of all households. 
C) receives about 52 percent of the total income. 
D) receives about 43 percent of the total income.

Question 14

How do government programs affect the distribution of income in the United States?

Accepted Answer

The U.S. government significantly redist

Question 15

The Social Security program is financed with funds from general tax revenues of the federal government.

Accepted Answer

A) True 
 B)False

Question 16

The following groups in the U.S. all had higher-than-the-national-average poverty rates in 2017, except

Accepted Answer

A) households headed by females. 
B) foreign-born noncitizens. 
C) persons 65 or older. 
D) Hispanics. 
A) households headed by females. 
B) foreign-born noncitizens. 
C) persons 65 or older. 
D) Hispanics.

Question 17

Labor market discrimination occurs when equivalent labor resources are paid or treated differently even though their productive contributions are equal.

Accepted Answer

A) True 
 B)False

Question 18

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 19

Suppose that white workers are getting paid $21/hour, while similarly productive African-American workers are getting paid $18/hour. A prejudiced white employer with a discrimination coefficient of $24/hour will

Accepted Answer

A) hire African Americans only if their wage rate falls to $3/hour. 
B) hire African-American workers. 
C) not hire African Americans at all, even if they offer to work for free. 
D) not hire African Americans, unless they work for free. 
A) hire African Americans only if their wage rate falls to $3/hour. 
B) hire African-American workers. 
C) not hire African Americans at all, even if they offer to work for free. 
D) not hire African Americans, unless they work for free.

Question 20

What is the difference between income and wealth? How can wealth contribute to income inequality?

Accepted Answer

Income is a flow; it represents a stream

Exam 23: Income Inequality, Poverty, and Discrimination

Which of the following employers is the most prejudiced? Employer

In 2017, the average income for households in the United States was about

Refer to the diagram, where curves (a)through (e)are Lorenz curves for five different countries. Income is equally distributed in

What is the argument for income inequality?

Which of the following is not a major complaint about the official income data used in measuring poverty?

In 2017, a household with an annual income of $80,000 would find itself in the

Which of the following would be a significant cause of income inequality in the United States?

Refer to the diagram. If line (c)represents the distribution of income before taxes and transfers and line (b)represents the distribution after taxes and transfers, then taxes and transfers have

Which of the following measurement issues makes interpretation of U.S. poverty rates difficult?

The basic argument for income inequality is that

The basic economic argument for greater income equality is that

In Venezuela, there are a small number of extremely wealthy households and an extremely large number of very poor households. If the United States were represented in the figure by Lorenz curve c, which curve would represent Venezuela?

The highest quintile of households in the income distribution (as of 2017)

How do government programs affect the distribution of income in the United States?

The Social Security program is financed with funds from general tax revenues of the federal government.

The following groups in the U.S. all had higher-than-the-national-average poverty rates in 2017, except

Labor market discrimination occurs when equivalent labor resources are paid or treated differently even though their productive contributions are equal.

Which of the following groups has the highest poverty rate?

Suppose that white workers are getting paid $21/hour, while similarly productive African-American workers are getting paid $18/hour. A prejudiced white employer with a discrimination coefficient of $24/hour will

What is the difference between income and wealth? How can wealth contribute to income inequality?

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures Caused by Externalities Asymmetric Information

Public Goods, Public Choice, 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

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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