Question 1

Statistical discrimination refers to

Accepted Answer

A) the crowding of women or minorities into low-paying occupations. 
B) significant differences in average levels of earnings by gender, race, and ethnicity, after accounting for nondiscriminatory factors. 
C) making individual hiring decisions on the basis of the characteristics of the group to which a person belongs, rather than on his or her personal characteristics and productivity. 
D) the 50-percent unexplained residual in studies that try to account for wage differences by gender, race, and ethnic origin. 
A) the crowding of women or minorities into low-paying occupations. 
B) significant differences in average levels of earnings by gender, race, and ethnicity, after accounting for nondiscriminatory factors. 
C) making individual hiring decisions on the basis of the characteristics of the group to which a person belongs, rather than on his or her personal characteristics and productivity. 
D) the 50-percent unexplained residual in studies that try to account for wage differences by gender, race, and ethnic origin.

Question 2

In the taste-for-discrimination model, a prejudiced employer who prefers white workers and who has a discrimination coefficient of $3/hour would still hire African-Americans if the market wage rate were $22/hour for white workers and $20/hour for African Americans.

Accepted Answer

A) True 
 B)False

Question 3

Suppose the market wage rate for whites is $18 an hour and the monetary value a prejudiced employer attaches to the disutility of hiring African Americans is $3. This employer will be indifferent between hiring African Americans and whites only when the African-American wage rate is

Accepted Answer

A) $3. 
B) $12. 
C) $15. 
D) $21. 
A) $3. 
B) $12. 
C) $15. 
D) $21.

Question 4

The Gini ratio of income inequality ranges between

Accepted Answer

A) 0 and 10,000. 
B) 1 and 10. 
C) −1 and +1. 
D) 0 and 1. 
A) 0 and 10,000. 
B) 1 and 10. 
C) −1 and +1. 
D) 0 and 1.

Question 5

Social insurance programs partially replace income that has been lost due to the following, except

Accepted Answer

A) retirement. 
B) disabilities. 
C) temporary unemployment. 
D) resignation from a job. 
A) retirement. 
B) disabilities. 
C) temporary unemployment. 
D) resignation from a job.

Question 6

Which one of the following would increase income inequality as measured by official census data and the quintile distribution?

Accepted Answer

A) a doubling of Social Security retirement benefits 
B) elimination of the SNAP program 
C) elimination of the TANF program 
D) reduced divorce rates 
A) a doubling of Social Security retirement benefits 
B) elimination of the SNAP program 
C) elimination of the TANF program 
D) reduced divorce rates

Question 7

An implication of the taste-for-discrimination model is that

Accepted Answer

A) discrimination can lower a firm's production costs. 
B) discrimination will move a firm along its declining average total cost curve. 
C) other things equal, nondiscriminating firms will have lower production costs than discriminating firms. 
D) other things equal, discriminating firms will have lower production costs than nondiscriminating firms. 
A) discrimination can lower a firm's production costs. 
B) discrimination will move a firm along its declining average total cost curve. 
C) other things equal, nondiscriminating firms will have lower production costs than discriminating firms. 
D) other things equal, discriminating firms will have lower production costs than nondiscriminating firms.

Question 8

The degree of inequality in the distribution of income in an economy is depicted in a(n)

Accepted Answer

A) Lorenz curve. 
B) Phillips curve. 
C) Engels curve. 
D) indifference curve. 
A) Lorenz curve. 
B) Phillips curve. 
C) Engels curve. 
D) indifference curve.

Question 9

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

Question 10

If income inequality is increasing, it means that the income levels of the poor are falling while the income levels of the rich are rising.

Accepted Answer

A) True 
 B)False

Question 11

What are social insurance programs? Discuss the main programs used in the United States.

Accepted Answer

Social insurance programs are programs t

Question 12

Define labor market discrimination.

Accepted Answer

Labor market discrimination is defined a

Question 13

In the United States,

Accepted Answer

A) taxes decrease, but transfers increase, income inequality. 
B) taxes increase, but transfers reduce, income inequality. 
C) both taxes and transfers decrease income inequality. 
D) both taxes and transfers increase income inequality. 
A) taxes decrease, but transfers increase, income inequality. 
B) taxes increase, but transfers reduce, income inequality. 
C) both taxes and transfers decrease income inequality. 
D) both taxes and transfers increase income inequality.

Question 14

The Gini ratio, or Gini coefficient, is a measure of the

Accepted Answer

A) inflationary gap. 
B) recessionary gap. 
C) number of households that are classified as being poor. 
D) degree of income inequality. 
A) inflationary gap. 
B) recessionary gap. 
C) number of households that are classified as being poor. 
D) degree of income inequality.

Question 15

Which of the following statements is correct?

Accepted Answer

A) The Social Security Act requires all employers to insure their workers against industrial accidents and diseases. 
B) An increase in the degree of income inequality means that the income level of the poor is falling while the income level of the rich is rising. 
C) Over 90 percent of the workers in the United States are currently covered by Social Security. 
D) About one-fifth of our population is now classified as living in poverty. 
A) The Social Security Act requires all employers to insure their workers against industrial accidents and diseases. 
B) An increase in the degree of income inequality means that the income level of the poor is falling while the income level of the rich is rising. 
C) Over 90 percent of the workers in the United States are currently covered by Social Security. 
D) About one-fifth of our population is now classified as living in poverty.

Question 16

A reduction in the collective discrimination coefficients of employers will increase the wage rate of those discriminated against but reduce their employment.

Accepted Answer

A) True 
 B)False

Question 17

Government programs that pay benefits to those who are unable to earn income because of permanent disabilities or to those who have very low incomes and dependent children are called

Accepted Answer

A) public assistance programs. 
B) social insurance programs. 
C) affirmative action programs. 
D) dependent programs. 
A) public assistance programs. 
B) social insurance programs. 
C) affirmative action programs. 
D) dependent programs.

Question 18

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 19

The unemployment compensation social insurance program is a

Accepted Answer

A) purely federal government program. 
B) purely state-level government program. 
C) federal-state program. 
D) local government program. 
A) purely federal government program. 
B) purely state-level government program. 
C) federal-state program. 
D) local government program.

Question 20

Suppose the members of population A, consisting of Al, Bob, Curt, Doris, and Ellie, receive annual incomes of $4,000, $3,200, $2,400, $1,800, and $1,200, respectively. The members of population B, consisting of Fred, George, Holly, Irma, and Joan, receive incomes of $4,000, $3,000, $1,250, $950, and $800, respectively. We

Accepted Answer

A) can say that the income of population B is more equally distributed than that of population A. 
B) can say that the income of population B is less equally distributed than that of population A. 
C) cannot make a meaningful comparison of the income distributions of populations A and B. 
D) can say that the richest quintile of population A receives 40 percent of total income. 
A) can say that the income of population B is more equally distributed than that of population A. 
B) can say that the income of population B is less equally distributed than that of population A. 
C) cannot make a meaningful comparison of the income distributions of populations A and B. 
D) can say that the richest quintile of population A receives 40 percent of total income.

Exam 23: Income Inequality, Poverty, and Discrimination

Statistical discrimination refers to

In the taste-for-discrimination model, a prejudiced employer who prefers white workers and who has a discrimination coefficient of $3/hour would still hire African-Americans if the market wage rate were $22/hour for white workers and $20/hour for African Americans.

Suppose the market wage rate for whites is $18 an hour and the monetary value a prejudiced employer attaches to the disutility of hiring African Americans is $3. This employer will be indifferent between hiring African Americans and whites only when the African-American wage rate is

The Gini ratio of income inequality ranges between

Social insurance programs partially replace income that has been lost due to the following, except

Which one of the following would increase income inequality as measured by official census data and the quintile distribution?

An implication of the taste-for-discrimination model is that

The degree of inequality in the distribution of income in an economy is depicted in a(n)

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 income inequality is increasing, it means that the income levels of the poor are falling while the income levels of the rich are rising.

What are social insurance programs? Discuss the main programs used in the United States.

Define labor market discrimination.

In the United States,

The Gini ratio, or Gini coefficient, is a measure of the

Which of the following statements is correct?

A reduction in the collective discrimination coefficients of employers will increase the wage rate of those discriminated against but reduce their employment.

Government programs that pay benefits to those who are unable to earn income because of permanent disabilities or to those who have very low incomes and dependent children are called

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

The unemployment compensation social insurance program is a

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