Question 1

Passing the TANF welfare program has

Accepted Answer

A) has made welfare programs more open-ended entitlement programs. 
B) limited assistance to five years. 
C) eliminated work and public service requirements. 
D) hurt economic incentives to work. 
E) made it into a negative income tax program. 
A) has made welfare programs more open-ended entitlement programs. 
B) limited assistance to five years. 
C) eliminated work and public service requirements. 
D) hurt economic incentives to work. 
E) made it into a negative income tax program.

Question 2

The demand curve for high-skilled workers

Accepted Answer

A) lies to the right of the demand curve for low-skilled workers. 
B) lies to the left of the demand curve for low-skilled workers. 
C) is vertical. 
D) is horizontal. 
E) lies to the right of the demand curve for low-skilled workers at high wages and to the left of the demand curve for low-skilled workers at low wages. 
A) lies to the right of the demand curve for low-skilled workers. 
B) lies to the left of the demand curve for low-skilled workers. 
C) is vertical. 
D) is horizontal. 
E) lies to the right of the demand curve for low-skilled workers at high wages and to the left of the demand curve for low-skilled workers at low wages.

Question 3

-In the figure above, the nation with the most equal distribution of income is nation

Accepted Answer

A) A. 
B) B. 
C) C. 
D) The distribution of income is the same in all three nations because their Lorenz curves can be plotted on the same diagram. 
E) It is impossible to determine with the information given. 
A) A. 
B) B. 
C) C. 
D) The distribution of income is the same in all three nations because their Lorenz curves can be plotted on the same diagram. 
E) It is impossible to determine with the information given.

Question 4

A regressive income tax is a tax for which the average tax rate

Accepted Answer

A) increases as income increases. 
B) becomes negative as income decreases. 
C) decreases as income increases. 
D) stays the same regardless of the income level. 
E) first increases and then decreases as income increases. 
A) increases as income increases. 
B) becomes negative as income decreases. 
C) decreases as income increases. 
D) stays the same regardless of the income level. 
E) first increases and then decreases as income increases.

Question 5

Suppose the government implements a negative income tax with a minimum guaranteed income of $20,000 and a tax rate of 30 percent on market income.
a∙What amount of tax would be paid by a household with no market income?
b∙What amount of tax would be paid by a household earning $100,000 of market income?

Accepted Answer

a∙A household with no market income woul

Question 6

Suppose a state charges an in-state student $2000 in tuition for a college education and charges an out-of -state student $10,000 in tuition.This differential

Accepted Answer

A) is a result of the state subsidizing education for its residents. 
B) explains the difference between the demand curve for high-skilled and low-skilled labor. 
C) explains the difference between the supply curve for high-skilled and low-skilled labor. 
D) can be corrected via a negative income tax. 
E) is an example of the positive theories of income redistribution. 
A) is a result of the state subsidizing education for its residents. 
B) explains the difference between the demand curve for high-skilled and low-skilled labor. 
C) explains the difference between the supply curve for high-skilled and low-skilled labor. 
D) can be corrected via a negative income tax. 
E) is an example of the positive theories of income redistribution.

Question 7

In the United States in 2010, a family of four was considered to be living below the poverty line only if its household income was less than approximately

Accepted Answer

A) $400 per year. 
B) $4,000 per year. 
C) $11,900 per year. 
D) $22,800 per year. 
E) $35,800 per year. 
A) $400 per year. 
B) $4,000 per year. 
C) $11,900 per year. 
D) $22,800 per year. 
E) $35,800 per year.

Question 8

If buyers discriminate against women and minorities,
I∙the value of marginal product of women and minorities is less than otherwise.
Ii∙the wage rate paid to women and minorities is less than otherwise.
Iii∙more women and minorities are hired than otherwise.

Accepted Answer

A) i only 
B) ii only 
C) ii and iii 
D) i and ii 
E) i, ii, and iii 
A) i only 
B) ii only 
C) ii and iii 
D) i and ii 
E) i, ii, and iii

Question 9

The figure above shows Lorenz curves for a nation.
-Based on the figure above, if the poorest 20 percent group of households increased the share of the nation's income they receive, then

Accepted Answer

A) there is a movement up along the Lorenz curve for income. 
B) there is a movement down along the Lorenz curve for income. 
C) the Lorenz curve for income shifts toward the line of equality. 
D) the Lorenz curve for income shifts away from the line of equality. 
E) Both answers A and C are correct. 
A) there is a movement up along the Lorenz curve for income. 
B) there is a movement down along the Lorenz curve for income. 
C) the Lorenz curve for income shifts toward the line of equality. 
D) the Lorenz curve for income shifts away from the line of equality. 
E) Both answers A and C are correct.

Question 10

Which of the following is true? At a given quantity of employment, if the
I∙value of marginal product of a high-skill worker is $35 and the value of marginal product of a low-skill worker is $10, the value of marginal product of the skill is $25.
Ii∙value of marginal product of a high-skill worker is $35 and the value of marginal product of a low-skill worker is $10, the cost of acquiring the skill is $25.
Iii∙value of marginal product of a skill is $25, then the wage rate must be $25.

Accepted Answer

A) i only 
B) ii only 
C) iii only 
D) i and iii 
E) ii and iii 
A) i only 
B) ii only 
C) iii only 
D) i and iii 
E) ii and iii

Question 11

The highest-income household in the United States today is likely to be a college-educated

Accepted Answer

A) married white couple. 
B) single white female. 
C) married Asian couple. 
D) single black male. 
E) single black female. 
A) married white couple. 
B) single white female. 
C) married Asian couple. 
D) single black male. 
E) single black female.

Question 12

The ________ distance between the supply curve of low-skilled labor and the supply curve of high-skilled labor is the ________.

Accepted Answer

A) horizontal; value of marginal product of skill 
B) horizontal; compensation for cost of acquiring skill 
C) vertical; value of marginal product of skill 
D) vertical; compensation for cost of acquiring skill 
E) vertical; difference in the price of the product produced b y high-skilled labor minus the price of the product produced by low-skilled labor 
A) horizontal; value of marginal product of skill 
B) horizontal; compensation for cost of acquiring skill 
C) vertical; value of marginal product of skill 
D) vertical; compensation for cost of acquiring skill 
E) vertical; difference in the price of the product produced b y high-skilled labor minus the price of the product produced by low-skilled labor

Question 13

Which type of household has the lowest poverty rate?

Accepted Answer

A) black 
B) Hispanic 
C) white 
D) White and Hispanic are almost tied. 
E) White and black are almost tied. 
A) black 
B) Hispanic 
C) white 
D) White and Hispanic are almost tied. 
E) White and black are almost tied.

Question 14

Which of the following is (are)a difference between high-skilled workers and low-skilled workers?
I∙High-skilled workers have a higher value of marginal product.
Ii∙High-skilled workers have incurred lower opportunity costs to acquire their skills.
Iii∙The demand for high-skilled workers exceeds that for low-skilled workers.

Accepted Answer

A) i only 
B) ii and iii 
C) i and ii 
D) i and iii 
E) i, ii, and iii 
A) i only 
B) ii and iii 
C) i and ii 
D) i and iii 
E) i, ii, and iii

Question 15

-In the figure above, the nation with the least equal distribution of income is nation

Accepted Answer

A) A. 
B) B. 
C) C. 
D) The distribution of income is the same in all three nations because their Lorenz curves can be plotted on the same diagram. 
E) It is impossible to determine with the information given. 
A) A. 
B) B. 
C) C. 
D) The distribution of income is the same in all three nations because their Lorenz curves can be plotted on the same diagram. 
E) It is impossible to determine with the information given.

Question 16

Which of the following is correct? On the average,
I∙the wage differential between white males and white females has narrowed since 2000.
Ii∙black females are paid more than black males.
Iii∙Hispanic males are paid more than black males.

Accepted Answer

A) i only 
B) ii only 
C) ii and iii 
D) i and iii 
E) i, ii, and iii 
A) i only 
B) ii only 
C) ii and iii 
D) i and iii 
E) i, ii, and iii

Question 17

Differences in skills
I∙can arise partly from differences in education and/or partly from differences in on-the-job training.
Ii∙can lead to large differences in earnings.
Iii∙result in different demand curves for high-skilled and low-skilled labor.

Accepted Answer

A) i only 
B) ii only 
C) ii and iii 
D) i and iii 
E) i, ii, and iii 
A) i only 
B) ii only 
C) ii and iii 
D) i and iii 
E) i, ii, and iii

Question 18

Looking at the U.S.poverty rate by race, we see that

Accepted Answer

A) the poverty rates by race are now equal. 
B) whites have a higher poverty rate than do blacks. 
C) Hispanics and blacks have a higher poverty rate than whites. 
D) whites have a nearly zero poverty rate while Hispanics and blacks are near 20 percent. 
E) whites and blacks have higher poverty rates than do Hispanics. 
A) the poverty rates by race are now equal. 
B) whites have a higher poverty rate than do blacks. 
C) Hispanics and blacks have a higher poverty rate than whites. 
D) whites have a nearly zero poverty rate while Hispanics and blacks are near 20 percent. 
E) whites and blacks have higher poverty rates than do Hispanics.

Question 19

Poverty for a household is defined as the state of

Accepted Answer

A) having a total income that is below the median total income. 
B) having an income that can be spent on food, shelter, and clothing that is below the median for food, shelter, and clothing. 
C) income below what is thought fair. 
D) income below what is thought necessary for food, shelter, and clothing. 
E) having an income that is below average. 
A) having a total income that is below the median total income. 
B) having an income that can be spent on food, shelter, and clothing that is below the median for food, shelter, and clothing. 
C) income below what is thought fair. 
D) income below what is thought necessary for food, shelter, and clothing. 
E) having an income that is below average.

Question 20

Suppose a supply curve for high-skilled labor is drawn in the same graph as a supply curve for low-skilled labor.The vertical distance between these two curves represents the

Accepted Answer

A) wage rate paid to a high-skilled worker. 
B) wage rate paid to a low-skilled worker. 
C) compensation the high-skilled worker requires for the cost of acquiring the skill. 
D) number of high-skill workers that will be hired. 
E) difference in the value of marginal product between the high-skilled workers and the low-skilled workers. 
A) wage rate paid to a high-skilled worker. 
B) wage rate paid to a low-skilled worker. 
C) compensation the high-skilled worker requires for the cost of acquiring the skill. 
D) number of high-skill workers that will be hired. 
E) difference in the value of marginal product between the high-skilled workers and the low-skilled workers.

Passing the TANF welfare program has

The demand curve for high-skilled workers

-In the figure above, the nation with the most equal distribution of income is nation

A regressive income tax is a tax for which the average tax rate

Suppose a state charges an in-state student $2000 in tuition for a college education and charges an out-of -state student $10,000 in tuition.This differential

In the United States in 2010, a family of four was considered to be living below the poverty line only if its household income was less than approximately

If buyers discriminate against women and minorities, I∙the value of marginal product of women and minorities is less than otherwise. Ii∙the wage rate paid to women and minorities is less than otherwise. Iii∙more women and minorities are hired than otherwise.

The figure above shows Lorenz curves for a nation. -Based on the figure above, if the poorest 20 percent group of households increased the share of the nation's income they receive, then

The highest-income household in the United States today is likely to be a college-educated

The distance between the supply curve of low-skilled labor and the supply curve of high-skilled labor is the .

Which type of household has the lowest poverty rate?

-In the figure above, the nation with the least equal distribution of income is nation

Which of the following is correct? On the average, I∙the wage differential between white males and white females has narrowed since 2000. Ii∙black females are paid more than black males. Iii∙Hispanic males are paid more than black males.

Differences in skills I∙can arise partly from differences in education and/or partly from differences in on-the-job training. Ii∙can lead to large differences in earnings. Iii∙result in different demand curves for high-skilled and low-skilled labor.

Looking at the U.S.poverty rate by race, we see that

Poverty for a household is defined as the state of

Suppose a supply curve for high-skilled labor is drawn in the same graph as a supply curve for low-skilled labor.The vertical distance between these two curves represents the

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Filters

Exam 20: Economic Inequality

Passing the TANF welfare program has

The demand curve for high-skilled workers

-In the figure above, the nation with the most equal distribution of income is nation

A regressive income tax is a tax for which the average tax rate

Suppose a state charges an in-state student $2000 in tuition for a college education and charges an out-of -state student $10,000 in tuition.This differential

In the United States in 2010, a family of four was considered to be living below the poverty line only if its household income was less than approximately

If buyers discriminate against women and minorities, I∙the value of marginal product of women and minorities is less than otherwise. Ii∙the wage rate paid to women and minorities is less than otherwise. Iii∙more women and minorities are hired than otherwise.

The figure above shows Lorenz curves for a nation. -Based on the figure above, if the poorest 20 percent group of households increased the share of the nation's income they receive, then

The highest-income household in the United States today is likely to be a college-educated

The ________ distance between the supply curve of low-skilled labor and the supply curve of high-skilled labor is the ________.

Which type of household has the lowest poverty rate?

-In the figure above, the nation with the least equal distribution of income is nation

Which of the following is correct? On the average, I∙the wage differential between white males and white females has narrowed since 2000. Ii∙black females are paid more than black males. Iii∙Hispanic males are paid more than black males.

Differences in skills I∙can arise partly from differences in education and/or partly from differences in on-the-job training. Ii∙can lead to large differences in earnings. Iii∙result in different demand curves for high-skilled and low-skilled labor.

Looking at the U.S.poverty rate by race, we see that

Poverty for a household is defined as the state of

Suppose a supply curve for high-skilled labor is drawn in the same graph as a supply curve for low-skilled labor.The vertical distance between these two curves represents the

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Filters

The distance between the supply curve of low-skilled labor and the supply curve of high-skilled labor is the .