Question 1

Critics of affirmative action programs argue that they

Accepted Answer

A) promote statistical discrimination. 
B) impair economic efficiency by preventing firms from freely choosing the most productive employee for a particular job. 
C) are not as efficient as quota systems at hiring women and minorities. 
D) All of the above are correct. 
A) promote statistical discrimination. 
B) impair economic efficiency by preventing firms from freely choosing the most productive employee for a particular job. 
C) are not as efficient as quota systems at hiring women and minorities. 
D) All of the above are correct.

Question 2

Compared to most other industrialized nations, the United States has greater income inequality.

Accepted Answer

A) True 
 B)False

Question 3

In the United States, the distribution of income after the income tax is ____ the distribution of income before the income tax.

Accepted Answer

A) slightly less equal than 
B) about as equal as 
C) slightly more equal than 
D) a great deal more equal than 
A) slightly less equal than 
B) about as equal as 
C) slightly more equal than 
D) a great deal more equal than

Question 4

Suppose a professor announces at the beginning of a course that he will give no failing grades because they are too damaging to self-esteem.How does such a policy affect equality and efficiency?

Accepted Answer

Equality increases, since the spread of

Question 5

If incomes were equally distributed in the United States, each fifth of the population would receive ____ percent of the income.

Accepted Answer

A) 5 
B) 10 
C) 15 
D) 20 
A) 5 
B) 10 
C) 15 
D) 20

Question 6

Economists favor a negative income tax because they believe

Accepted Answer

A) that it will create more jobs for economists to monitor the program. 
B) the current welfare programs have excessively high work incentives, which result in less total work. 
C) it is more efficient than the existing welfare system because NIT provides better work incentives. 
D) All of the above are true. 
A) that it will create more jobs for economists to monitor the program. 
B) the current welfare programs have excessively high work incentives, which result in less total work. 
C) it is more efficient than the existing welfare system because NIT provides better work incentives. 
D) All of the above are true.

Question 7

The highest-income fifth of the U.S.population earns more than 50 percent of all income.

Accepted Answer

A) True 
 B)False

Question 8

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 9

In 1962, Michael Harrington argued in The Other America that there was chronic, severe poverty in America.

Accepted Answer

A) True 
 B)False

Question 10

The basic problem with the government setting an absolute poverty line is that it is

Accepted Answer

A) completely objective. 
B) somewhat arbitrary. 
C) unconstitutional. 
D) based on average income. 
A) completely objective. 
B) somewhat arbitrary. 
C) unconstitutional. 
D) based on average income.

Question 11

Under a system of free, competitive markets,

Accepted Answer

A) a society can usually achieve efficiency only at the expense of equality. 
B) poverty cannot exist in the long run. 
C) employers do not practice statistical discrimination. 
D) income is distributed equally across the population. 
A) a society can usually achieve efficiency only at the expense of equality. 
B) poverty cannot exist in the long run. 
C) employers do not practice statistical discrimination. 
D) income is distributed equally across the population.

Question 12

Suppose that a negative income tax was created that set a minimum income for a family of $5,000 per year and had a marginal tax rate of 33 percent.What is the break-even level of income?
 If a person earned $5,000, what would the after-tax income level be?
 If the earnings were $10,000, what would the after-tax income be?

Accepted Answer

The break-even level of income is $15,00

Question 13

Define discrimination.Why does discrimination occur and what evidence exists that it does occur?

Accepted Answer

Economic discrimination occurs when equi

Question 14

The concept of poverty is culturally determined, and hence people are defined as "poor" in relation to others.

Accepted Answer

A) True 
 B)False

Question 15

In 2012, approximately what income level was the cut-off point for defining a family as "rich"?

Accepted Answer

A) $72,000 
B) $104,000 
C) $143,000 
D) $195,000 
A) $72,000 
B) $104,000 
C) $143,000 
D) $195,000

Question 16

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 17

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 18

A major problem with the negative income tax is that

Accepted Answer

A) low tax rates imply low break-even incomes. 
B) low tax rates imply high break-even incomes. 
C) high tax rates imply low minimums. 
D) All of the above are correct. 
A) low tax rates imply low break-even incomes. 
B) low tax rates imply high break-even incomes. 
C) high tax rates imply low minimums. 
D) All of the above are correct.

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

Falling below a minimum standard of living illustrates the concept of absolute poverty.

Accepted Answer

A) True 
 B)False

Exam 20: Poverty, Inequality, and Discrimination

Critics of affirmative action programs argue that they

Compared to most other industrialized nations, the United States has greater income inequality.

In the United States, the distribution of income after the income tax is ____ the distribution of income before the income tax.

Suppose a professor announces at the beginning of a course that he will give no failing grades because they are too damaging to self-esteem.How does such a policy affect equality and efficiency?

If incomes were equally distributed in the United States, each fifth of the population would receive ____ percent of the income.

Economists favor a negative income tax because they believe

The highest-income fifth of the U.S.population earns more than 50 percent of all income.

In 1962, Michael Harrington argued in The Other America that there was chronic, severe poverty in America.

The basic problem with the government setting an absolute poverty line is that it is

Under a system of free, competitive markets,

Define discrimination.Why does discrimination occur and what evidence exists that it does occur?

The concept of poverty is culturally determined, and hence people are defined as "poor" in relation to others.

In 2012, approximately what income level was the cut-off point for defining a family as "rich"?

The poverty line is the income level

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

A major problem with the negative income tax is that

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.

Falling below a minimum standard of living illustrates the concept of absolute poverty.

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

Securities: Business Finance and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets: the Price System

The Shortcomings of Free Markets

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Is Useconomic Leadership Threatened

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

He Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

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