Question 1

The concept of inequality

Accepted Answer

A) has no economic meaning. 
B) applies to low income countries only. 
C) is an extension of relative poverty. 
D) is only a theoretical concept. 
A) has no economic meaning. 
B) applies to low income countries only. 
C) is an extension of relative poverty. 
D) is only a theoretical concept.

Question 2

The poverty line is the income level

Accepted Answer

A) earned by a worker employed full time at the minimum wage. 
B) below which a family is officially considered "poor." 
C) above which a family is not entitled to government assistance. 
D) that is the average for American families. 
A) earned by a worker employed full time at the minimum wage. 
B) below which a family is officially considered "poor." 
C) above which a family is not entitled to government assistance. 
D) that is the average for American families.

Question 3

Japanese employers tend to hire employees right out of college and train them for a lifetime job with the company. Over time they found that women often, but not always, married after a few years and left the company so they were not good training investments. Based on this experience, and despite the exceptions, firms stopped hiring any women for jobs that require substantial training. This practice is called

Accepted Answer

A) economic discrimination. 
B) statistical discrimination. 
C) compensating differentials. 
D) the substitution effect. 
A) economic discrimination. 
B) statistical discrimination. 
C) compensating differentials. 
D) the substitution effect.

Question 4

How does the idea of a leaky bucket relate to the study of income distribution?

Accepted Answer

The idea is drawn from the writings of t

Question 5

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 6

Discuss the controversy surrounding affirmative action. How does this controversy illustrate the trade-off between equality and efficiency?

Accepted Answer

Critics claim that affirmative action am

Question 7

The concept of relative poverty

Accepted Answer

A) leads to the concept of inequality. 
B) replaces the need for concepts of absolute poverty. 
C) is measured relative to the poverty line. 
D) is only relevant in low income countries. 
A) leads to the concept of inequality. 
B) replaces the need for concepts of absolute poverty. 
C) is measured relative to the poverty line. 
D) is only relevant in low income countries.

Question 8

Figure 21-1
 
In Figure 21-1, the optimal amount of equality lies only between which points?

Accepted Answer

A) A and B 
B) C and D 
C) D and E 
D) B and E 
A) A and B 
B) C and D 
C) D and E 
D) B and E

Question 9

A market system tends to create inequality.

Accepted Answer

A) True 
 B)False

Question 10

The concept of absolute poverty states that anyone who falls too far behind the average income should be considered poor.

Accepted Answer

A) True 
 B)False

Question 11

The distribution of income in the United States

Accepted Answer

A) became slightly more equal during the 1980s. 
B) did not change significantly during the 1980s. 
C) has become more unequal since 1980. 
D) has become more equal since 1980. 
A) became slightly more equal during the 1980s. 
B) did not change significantly during the 1980s. 
C) has become more unequal since 1980. 
D) has become more equal since 1980.

Question 12

It is not optimal to have equal incomes.

Accepted Answer

A) True 
 B)False

Question 13

A minority candidate may not have the same chances as a white candidate for a job simply based on an employer's misconceptions about minorities.

Accepted Answer

A) True 
 B)False

Question 14

The two ways to define poverty are which of the following?

Accepted Answer

A) Relatively and absolutely 
B) Absolutely and definitely 
C) Definitely and conceptually 
D) Definitely and receptively 
A) Relatively and absolutely 
B) Absolutely and definitely 
C) Definitely and conceptually 
D) Definitely and receptively

Question 15

It has been found that

Accepted Answer

A) less-developed countries have more equality of income distribution. 
B) more-developed countries have more equality of income distribution. 
C) only prior communist countries have more equality of income distribution. 
D) income distribution cannot be measured among countries with different political and economic systems. 
A) less-developed countries have more equality of income distribution. 
B) more-developed countries have more equality of income distribution. 
C) only prior communist countries have more equality of income distribution. 
D) income distribution cannot be measured among countries with different political and economic systems.

Question 16

The lowest-income fifth of the U.S. population ordinarily earns about 20 percent of the income.

Accepted Answer

A) True 
 B)False

Question 17

If one includes in-kind income in the calculation, the

Accepted Answer

A) official poverty rate becomes meaningless. 
B) incidence of poverty actually increases. 
C) poverty rate is unchanged. 
D) fraction of the population in poverty drops. 
A) official poverty rate becomes meaningless. 
B) incidence of poverty actually increases. 
C) poverty rate is unchanged. 
D) fraction of the population in poverty drops.

Question 18

Discrimination can come from many groups of people, including employers and fellow employees.

Accepted Answer

A) True 
 B)False

Question 19

Taken as a whole, antipoverty programs may actually put a poor family in a position in which the family becomes worse off if its earnings rise.

Accepted Answer

A) True 
 B)False

Question 20

Two policies to combat discrimination are affirmative action and right-to-work laws.

Accepted Answer

A) True 
 B)False

Exam 20: Poverty, Inequality, and Discrimination

The concept of inequality

The poverty line is the income level

How does the idea of a leaky bucket relate to the study of income distribution?

Official data may overstate the extent of poverty because

Discuss the controversy surrounding affirmative action. How does this controversy illustrate the trade-off between equality and efficiency?

The concept of relative poverty

Figure 21-1 In Figure 21-1, the optimal amount of equality lies only between which points?

A market system tends to create inequality.

The concept of absolute poverty states that anyone who falls too far behind the average income should be considered poor.

The distribution of income in the United States

It is not optimal to have equal incomes.

A minority candidate may not have the same chances as a white candidate for a job simply based on an employer's misconceptions about minorities.

The two ways to define poverty are which of the following?

It has been found that

The lowest-income fifth of the U.S. population ordinarily earns about 20 percent of the income.

If one includes in-kind income in the calculation, the

Discrimination can come from many groups of people, including employers and fellow employees.

Taken as a whole, antipoverty programs may actually put a poor family in a position in which the family becomes worse off if its earnings rise.

Two policies to combat discrimination are affirmative action and right-to-work laws.

What Is Economics

The Economy: 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

Externalities, Externaliteis, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

International Trade and Comparative Advantage

Contemporary Issues in the Us Economy

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