Question 1

Which of the following would be considered part of income?

Accepted Answer

A) wages and salaries 
B) the value of a house 
C) corporate stock holdings 
D) money in a bank account 
A) wages and salaries 
B) the value of a house 
C) corporate stock holdings 
D) money in a bank account

Question 2

Refer to the table. The decline in percentage of income received from before taxes and transfers to after taxes and transfers is greatest for the

Accepted Answer

A) third 20 percent of households. 
B) second 20 percent of households. 
C) highest 20 percent of households. 
D) fourth 20 percent of households. 
A) third 20 percent of households. 
B) second 20 percent of households. 
C) highest 20 percent of households. 
D) fourth 20 percent of households.

Question 3

If a prejudiced white employer behaves as if there is a disutility from hiring an African-American worker, then this disutility is measured by the

Accepted Answer

A) employment coefficient. 
B) discrimination coefficient. 
C) occupational coefficient. 
D) affirmative action coefficient. 
A) employment coefficient. 
B) discrimination coefficient. 
C) occupational coefficient. 
D) affirmative action coefficient.

Question 4

Refer to the diagram. If line (c)represents the pretax and transfer distribution of income in the United States, the posttax and transfer distribution is best represented by

Accepted Answer

A) line (a). 
B) line (b). 
C) line (c)because taxes and transfers have no effect on income distribution. 
D) line (d). 
A) line (a). 
B) line (b). 
C) line (c)because taxes and transfers have no effect on income distribution. 
D) line (d).

Question 5

In the taste-for-discrimination model,

Accepted Answer

A) discriminatory employers behave as if employing nonpreferred-race workers adds to costs. 
B) individual workers are judged by the characteristics of the groups to which they belong. 
C) prejudiced white employers will never hire African-American workers. 
D) women and minorities are confined to a limited number of occupations. 
A) discriminatory employers behave as if employing nonpreferred-race workers adds to costs. 
B) individual workers are judged by the characteristics of the groups to which they belong. 
C) prejudiced white employers will never hire African-American workers. 
D) women and minorities are confined to a limited number of occupations.

Question 6

The difference between income and wealth is that income

Accepted Answer

A) is accumulated, while wealth is earned. 
B) refers to a flow of earnings, while wealth is the stock of assets one has. 
C) is measured at a point in time, while wealth is measured over a period of time. 
D) may not be in cash, while wealth is in cash. 
A) is accumulated, while wealth is earned. 
B) refers to a flow of earnings, while wealth is the stock of assets one has. 
C) is measured at a point in time, while wealth is measured over a period of time. 
D) may not be in cash, while wealth is in cash.

Question 7

A cause of the unequal distribution of income in the United States is

Accepted Answer

A) differences in work preferences and risks. 
B) differences in noncash transfers. 
C) high expenditures for social insurance. 
D) a low benefit-reduction rate for income. 
A) differences in work preferences and risks. 
B) differences in noncash transfers. 
C) high expenditures for social insurance. 
D) a low benefit-reduction rate for income.

Question 8

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.

Question 9

Assumptions: (1)the labor force comprises 9 million men and 9 million women workers; (2)the economy has 3 occupations, X, Y, and Z, each having identical demand curves for labor; (3)male and female workers are homogeneous with respect to their labor-market capabilities; (4)women are discriminated against by being excluded from occupations X and Y and are confined to Z; and (5)aside from discrimination, the economy is competitive, and workers seek to maximize their earnings.Refer to the diagram and list of assumptions. If discrimination is ended,

Accepted Answer

A) men will leave occupations X and Y and enter occupation Z. 
B) 4 million women will leave occupation Z, with 2 million entering occupation X and 2 million entering occupation Y. 
C) 3 million women will leave occupation Z, with 1.5 million entering occupation X and 1.5 million entering occupation Y. 
D) 3 million women will leave occupation Z, all of whom will enter industry X. 
A) men will leave occupations X and Y and enter occupation Z. 
B) 4 million women will leave occupation Z, with 2 million entering occupation X and 2 million entering occupation Y. 
C) 3 million women will leave occupation Z, with 1.5 million entering occupation X and 1.5 million entering occupation Y. 
D) 3 million women will leave occupation Z, all of whom will enter industry X.

Question 10

The top 20 percent of U.S. income earners receive nearly 80 percent of total U.S. income.

Accepted Answer

A) True 
 B)False

Question 11

Refer to the figure. A nation that has an income distribution of perfect equality would be represented by curve

Accepted Answer

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

Question 12

If there is a widespread bias against African-American workers, an increase in the collective discrimination coefficients of employers will

Accepted Answer

A) reduce the African-American wage rate, increase African-American employment, and lower the actual African-American-white wage ratio. 
B) reduce the African-American wage rate, decrease African-American employment, and lower the actual African-American-white wage ratio. 
C) increase the African-American wage rate, increase African-American employment, and increase the actual African-American-white wage ratio. 
D) increase the African-American wage rate, reduce African-American employment, and increase the actual African-American-white wage ratio. 
A) reduce the African-American wage rate, increase African-American employment, and lower the actual African-American-white wage ratio. 
B) reduce the African-American wage rate, decrease African-American employment, and lower the actual African-American-white wage ratio. 
C) increase the African-American wage rate, increase African-American employment, and increase the actual African-American-white wage ratio. 
D) increase the African-American wage rate, reduce African-American employment, and increase the actual African-American-white wage ratio.

Question 13

Since the implementation of TANF in 1996, the U.S. welfare rolls have fallen by roughly one-half and participation remains low in 2017.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a major reason for the growing income inequality in the United States since 1980?

Accepted Answer

A) higher marginal tax rates 
B) unemployment benefits 
C) rising number of skilled workers 
D) import competition 
A) higher marginal tax rates 
B) unemployment benefits 
C) rising number of skilled workers 
D) import competition

Question 15

A particular woman is denied on-the-job training because women on average are more likely to drop out of the workforce than men. This illustrates

Accepted Answer

A) occupational segregation. 
B) the crowding model. 
C) the taste-for-discrimination model. 
D) statistical discrimination. 
A) occupational segregation. 
B) the crowding model. 
C) the taste-for-discrimination model. 
D) statistical discrimination.

Question 16

The equality-efficiency trade-off would be most closely associated with which one of the following statements?

Accepted Answer

A) The rich get richer and the poor get poorer. 
B) The only way to create income equality is to take from the rich and give to the poor. 
C) If cutting the income pie in more equal slices tends to shrink the pie, what amount of shrinkage will society tolerate? 
D) People are less concerned with the larger question of income distribution than they are with the more specific issue of income inadequacy. 
A) The rich get richer and the poor get poorer. 
B) The only way to create income equality is to take from the rich and give to the poor. 
C) If cutting the income pie in more equal slices tends to shrink the pie, what amount of shrinkage will society tolerate? 
D) People are less concerned with the larger question of income distribution than they are with the more specific issue of income inadequacy.

Question 17

The crowding model of discrimination suggests that

Accepted Answer

A) women and selected minorities are systematically excluded from high-paying occupations and crowded into low-paying occupations, decreasing their wages and reducing domestic output. 
B) employers having high discrimination coefficients will be crowded out by nondiscriminating employers in the long run. 
C) firms will base hiring decisions on group averages, rather than on individual characteristics and productivity. 
D) occupational segregation is largely the result of freely made rational choices of women and minorities. 
A) women and selected minorities are systematically excluded from high-paying occupations and crowded into low-paying occupations, decreasing their wages and reducing domestic output. 
B) employers having high discrimination coefficients will be crowded out by nondiscriminating employers in the long run. 
C) firms will base hiring decisions on group averages, rather than on individual characteristics and productivity. 
D) occupational segregation is largely the result of freely made rational choices of women and minorities.

Question 18

An employer is prejudiced, prefers to hire white rather than Hispanic workers, and is willing to pay higher wages to obtain white workers. This illustrates

Accepted Answer

A) reverse discrimination. 
B) the crowding model. 
C) the taste-for-discrimination model. 
D) statistical discrimination. 
A) reverse discrimination. 
B) the crowding model. 
C) the taste-for-discrimination model. 
D) statistical discrimination.

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

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.

Exam 23: Income Inequality, Poverty, and Discrimination

Which of the following would be considered part of income?

Refer to the table. The decline in percentage of income received from before taxes and transfers to after taxes and transfers is greatest for the

If a prejudiced white employer behaves as if there is a disutility from hiring an African-American worker, then this disutility is measured by the

Refer to the diagram. If line (c)represents the pretax and transfer distribution of income in the United States, the posttax and transfer distribution is best represented by

In the taste-for-discrimination model,

The difference between income and wealth is that income

A cause of the unequal distribution of income in the United States is

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

The top 20 percent of U.S. income earners receive nearly 80 percent of total U.S. income.

Refer to the figure. A nation that has an income distribution of perfect equality would be represented by curve

If there is a widespread bias against African-American workers, an increase in the collective discrimination coefficients of employers will

Since the implementation of TANF in 1996, the U.S. welfare rolls have fallen by roughly one-half and participation remains low in 2017.

Which of the following is a major reason for the growing income inequality in the United States since 1980?

A particular woman is denied on-the-job training because women on average are more likely to drop out of the workforce than men. This illustrates

The equality-efficiency trade-off would be most closely associated with which one of the following statements?

The crowding model of discrimination suggests that

An employer is prejudiced, prefers to hire white rather than Hispanic workers, and is willing to pay higher wages to obtain white workers. This illustrates

Medicaid

Each of the following contributes to income inequality except

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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