Question 1

Census data indicate that, as of 2017, the top fifth of all households receive about ________ times as much income as the bottom fifth.

Accepted Answer

A) seventeen 
B) ten 
C) eight 
D) twenty 
A) seventeen 
B) ten 
C) eight 
D) twenty

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) 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 3

What is universal basic income? List the benefits asserted by the advocates and then the reasons cited by the detractors in the debate about UBI.

Accepted Answer

Universal basic income is that the gover

Question 4

Refer to the table. What percentage of households made less than $15,000?

Accepted Answer

A) 5 
B) 6 
C) 11 
D) 23 
A) 5 
B) 6 
C) 11 
D) 23

Question 5

Of the following groups, which had the highest incidence of poverty in 2017?

Accepted Answer

A) African Americans 
B) Hispanics 
C) female householders 
D) persons 65 or older 
A) African Americans 
B) Hispanics 
C) female householders 
D) persons 65 or older

Question 6

Refer to the diagrams, which show identical marginal utility from income curves for Singer and Catalano. The marginal utility from income curves are drawn on the assumption that

Accepted Answer

A) Singer buys more inferior goods than does Catalano. 
B) Singer and Catalano have identical capacities to enjoy income. 
C) Catalano has a greater capacity to enjoy income than does Singer. 
D) Singer has a greater capacity to enjoy income than does Catalano. 
A) Singer buys more inferior goods than does Catalano. 
B) Singer and Catalano have identical capacities to enjoy income. 
C) Catalano has a greater capacity to enjoy income than does Singer. 
D) Singer has a greater capacity to enjoy income than does Catalano.

Question 7

Economic discrimination puts the economy inside its production possibilities curve because discrimination

Accepted Answer

A) redistributes income from low-paid to high-paid persons. 
B) promotes present consumption rather than production of capital goods. 
C) arbitrarily blocks women and certain minorities from higher-productivity, higher-wage jobs and thus keeps the economy from producing its maximum output. 
D) often causes inflation, which reduces the nation's real output. 
A) redistributes income from low-paid to high-paid persons. 
B) promotes present consumption rather than production of capital goods. 
C) arbitrarily blocks women and certain minorities from higher-productivity, higher-wage jobs and thus keeps the economy from producing its maximum output. 
D) often causes inflation, which reduces the nation's real output.

Question 8

Which of the following countries has the highest Gini ratio, as of 2014?

Accepted Answer

A) Slovak Republic 
B) United States 
C) China 
D) Mexico 
A) Slovak Republic 
B) United States 
C) China 
D) Mexico

Question 9

Since 1980, the difference between the earnings of college graduates and high school graduates has

Accepted Answer

A) fallen, thereby increasing income inequality. 
B) increased, thereby increasing income inequality. 
C) remained constant. 
D) increased, thereby decreasing income inequality. 
A) fallen, thereby increasing income inequality. 
B) increased, thereby increasing income inequality. 
C) remained constant. 
D) increased, thereby decreasing income inequality.

Question 10

Which of the following is an example of a noncash transfer that is typically not included in the income-distribution data?

Accepted Answer

A) Social Security benefits 
B) welfare assistance 
C) unemployment compensation 
D) Medicare 
A) Social Security benefits 
B) welfare assistance 
C) unemployment compensation 
D) Medicare

Question 11

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

Accepted Answer

A) Poverty statistics measure consumption rather than income, and some families may receive income that is above the official poverty line. 
B) The high cost of living in urban 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 consumption rather than income, and some families may receive income that is above the official poverty line. 
B) The high cost of living in urban 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 12

The standard data on income distribution do not include the value of noncash transfers as income.

Accepted Answer

A) True 
 B)False

Question 13

How do preferences and risk contribute to income inequality?

Accepted Answer

Incomes also differ because of different

Question 14

Refer to the income distribution data in the table. Which of the following statements is correct?

Accepted Answer

A) The distribution of income was the same in 2015 as in 1980. 
B) In 2015, the top 20 percent of households earned just over half of the nation's total income. 
C) In 1980, the poorest 60 percent of the population earned 16.9 percent of the nation's total income. 
D) The income levels of the lower 60 percent of households have fallen from 1980 to 2015. 
A) The distribution of income was the same in 2015 as in 1980. 
B) In 2015, the top 20 percent of households earned just over half of the nation's total income. 
C) In 1980, the poorest 60 percent of the population earned 16.9 percent of the nation's total income. 
D) The income levels of the lower 60 percent of households have fallen from 1980 to 2015.

Question 15

Currently over 90 percent of all workers in the United States are covered by Social Security.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following contributes most to the reduction in income inequality?

Accepted Answer

A) taxes 
B) wealth 
C) transfer payments 
D) earned-income tax credits 
A) taxes 
B) wealth 
C) transfer payments 
D) earned-income tax credits

Question 17

Labor market discrimination increases the size of the nation's GDP by promoting specialization on the basis of race.

Accepted Answer

A) True 
 B)False

Question 18

An employer whose discrimination coefficient is $7 will

Accepted Answer

A) refuse to hire nonpreferred-race workers at any wage rate. 
B) hire only preferred-race workers if the actual nonpreferred-preferred wage differential is $8 an hour. 
C) hire only nonpreferred-race workers if the actual nonpreferred-preferred wage differential is $8 an hour. 
D) hire only preferred-race workers if the nonpreferred-preferred wage differential is $7. 
A) refuse to hire nonpreferred-race workers at any wage rate. 
B) hire only preferred-race workers if the actual nonpreferred-preferred wage differential is $8 an hour. 
C) hire only nonpreferred-race workers if the actual nonpreferred-preferred wage differential is $8 an hour. 
D) hire only preferred-race workers if the nonpreferred-preferred wage differential is $7.

Question 19

Statistical discrimination

Accepted Answer

A) can persist in the long run if differences in average characteristics among groups continue. 
B) will tend to diminish in the long run because nondiscriminating firms will drive out discriminating firms. 
C) requires that employers have discrimination coefficients greater than zero. 
D) is also known as occupational segregation. 
A) can persist in the long run if differences in average characteristics among groups continue. 
B) will tend to diminish in the long run because nondiscriminating firms will drive out discriminating firms. 
C) requires that employers have discrimination coefficients greater than zero. 
D) is also known as occupational segregation.

Question 20

According to the standard government definitions, the percentage of the U.S. population now (2017)considered to be living in poverty is about

Accepted Answer

A) 12.3 percent. 
B) 23.6 percent. 
C) 14.8 percent. 
D) 39.7 percent. 
A) 12.3 percent. 
B) 23.6 percent. 
C) 14.8 percent. 
D) 39.7 percent.

Exam 23: Income Inequality, Poverty, and Discrimination

Census data indicate that, as of 2017, the top fifth of all households receive about ________ times as much income as the bottom fifth.

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

What is universal basic income? List the benefits asserted by the advocates and then the reasons cited by the detractors in the debate about UBI.

Refer to the table. What percentage of households made less than $15,000?

Of the following groups, which had the highest incidence of poverty in 2017?

Refer to the diagrams, which show identical marginal utility from income curves for Singer and Catalano. The marginal utility from income curves are drawn on the assumption that

Economic discrimination puts the economy inside its production possibilities curve because discrimination

Which of the following countries has the highest Gini ratio, as of 2014?

Since 1980, the difference between the earnings of college graduates and high school graduates has

Which of the following is an example of a noncash transfer that is typically not included in the income-distribution data?

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

The standard data on income distribution do not include the value of noncash transfers as income.

How do preferences and risk contribute to income inequality?

Refer to the income distribution data in the table. Which of the following statements is correct?

Currently over 90 percent of all workers in the United States are covered by Social Security.

Which of the following contributes most to the reduction in income inequality?

Labor market discrimination increases the size of the nation's GDP by promoting specialization on the basis of race.

An employer whose discrimination coefficient is $7 will

Statistical discrimination

According to the standard government definitions, the percentage of the U.S. population now (2017)considered to be living in poverty is about

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