Question 1

Recent income distribution figures in the United States show

Accepted Answer

A)  slightly more inequality. 
B)  less inequality. 
C)  greater equity. 
D)  less equity. 
A)  slightly more inequality. 
B)  less inequality. 
C)  greater equity. 
D)  less equity.

Question 2

Inheritance is responsible for about ________ percent of the income inequality in the United States.

Accepted Answer

A)  10 
B)  25 
C)  40 
D)  60 
A)  10 
B)  25 
C)  40 
D)  60

Question 3

The effects of the national health care program on labor markets will

Accepted Answer

A)  lower the effective wage rate that they must pay for each unit of labor. 
B)  decrease the marginal revenue product of labor. 
C)  increase the marginal revenue product of labor. 
D)  move upward along their downward-sloping marginal-product-of-labor curve. 
A)  lower the effective wage rate that they must pay for each unit of labor. 
B)  decrease the marginal revenue product of labor. 
C)  increase the marginal revenue product of labor. 
D)  move upward along their downward-sloping marginal-product-of-labor curve.

Question 4

Determinants of the marginal productivity of labor include all of the following EXCEPT

Accepted Answer

A)  talent. 
B)  education. 
C)  experience. 
D)  location. 
A)  talent. 
B)  education. 
C)  experience. 
D)  location.

Question 5

Which of the following are determinants of differences in income?

Accepted Answer

A)  age 
B)  marginal productivity 
C)  discrimination 
D)  all of the above 
A)  age 
B)  marginal productivity 
C)  discrimination 
D)  all of the above

Question 6

Income in kind is defined as

Accepted Answer

A)  income received in the form of a paycheck. 
B)  payment for services in the form of cash. 
C)  tips. 
D)  income received in the form of goods and services. 
A)  income received in the form of a paycheck. 
B)  payment for services in the form of cash. 
C)  tips. 
D)  income received in the form of goods and services.

Question 7

Which of the following CANNOT be eliminated in a growing economy such as the U.S. economy?

Accepted Answer

A)  absolute poverty 
B)  relative poverty 
C)  both absolute and relative poverty 
D)  Neither absolute nor relative poverty can be eliminated. 
A)  absolute poverty 
B)  relative poverty 
C)  both absolute and relative poverty 
D)  Neither absolute nor relative poverty can be eliminated.

Question 8

The Lorenz curve is a geometric representation of

Accepted Answer

A)  the profile of earnings for a "typical" family over time. 
B)  the standard of living experienced by the poor in a country. 
C)  the difference between pre-tax and post-tax income. 
D)  the distribution of income. 
A)  the profile of earnings for a "typical" family over time. 
B)  the standard of living experienced by the poor in a country. 
C)  the difference between pre-tax and post-tax income. 
D)  the distribution of income.

Question 9

-Use the above table. What percentage of income is received by the richest 20% of the population?

Accepted Answer

A)  33.33 percent 
B)  16.67 percent 
C)  11.11 percent 
D)  40.00 percent 
A)  33.33 percent 
B)  16.67 percent 
C)  11.11 percent 
D)  40.00 percent

Question 10

The use of hospitals today is dominated by

Accepted Answer

A)  the elderly. 
B)  immigrants. 
C)  obstetrical care. 
D)  the wealthy. 
A)  the elderly. 
B)  immigrants. 
C)  obstetrical care. 
D)  the wealthy.

Question 11

One reason earnings tend to fall before retirement age is that

Accepted Answer

A)  the experience of people is no longer valuable after they are 50 or 55. 
B)  people tend to reduce the number of hours they work after age 50. 
C)  people are retiring earlier. 
D)  firms discriminate against older workers. 
A)  the experience of people is no longer valuable after they are 50 or 55. 
B)  people tend to reduce the number of hours they work after age 50. 
C)  people are retiring earlier. 
D)  firms discriminate against older workers.

Question 12

On average the productivity of an individual usually peaks when the individual is about

Accepted Answer

A)  20. 
B)  30. 
C)  50. 
D)  60. 
A)  20. 
B)  30. 
C)  50. 
D)  60.

Question 13

Income-in-kind is

Accepted Answer

A)  money income. 
B)  received in the form of goods and services. 
C)  income in dollars. 
D)  used to buy goods and services. 
A)  money income. 
B)  received in the form of goods and services. 
C)  income in dollars. 
D)  used to buy goods and services.

Question 14

All of the following lead to a difference in income EXCEPT

Accepted Answer

A)  sales tax. 
B)  discrimination. 
C)  the age-earnings cycle. 
D)  marginal productivity. 
A)  sales tax. 
B)  discrimination. 
C)  the age-earnings cycle. 
D)  marginal productivity.

Question 15

All of the following aim to reduce income inequality EXCEPT

Accepted Answer

A)  Social Security payments. 
B)  earned income tax credits. 
C)  regressive taxes. 
D)  food stamp programs. 
A)  Social Security payments. 
B)  earned income tax credits. 
C)  regressive taxes. 
D)  food stamp programs.

Question 16

The more bowed (skewed) the Lorenz curve,

Accepted Answer

A)  the more equal the distribution of income. 
B)  the greater the number of households in the society. 
C)  the more unequal the distribution of money income. 
D)  the greater the total income of the society. 
A)  the more equal the distribution of income. 
B)  the greater the number of households in the society. 
C)  the more unequal the distribution of money income. 
D)  the greater the total income of the society.

Question 17

With a human capital investment (such as the investment in going to college), the most important cost tends to be

Accepted Answer

A)  foregone leisure. 
B)  books and equipment. 
C)  the opportunity cost of not working. 
D)  taxes. 
A)  foregone leisure. 
B)  books and equipment. 
C)  the opportunity cost of not working. 
D)  taxes.

Question 18

The idea that the Lorenz curve should be along the 45 degree line is consistent with

Accepted Answer

A)  the productivity standard. 
B)  the egalitarian principle. 
C)  the conservative principle. 
D)  none of the above. 
A)  the productivity standard. 
B)  the egalitarian principle. 
C)  the conservative principle. 
D)  none of the above.

Question 19

Changes in the Lorenz curve since 1929 in the United States indicate that

Accepted Answer

A)  the distribution of income today is identical to what it was in 1929. 
B)  the distribution of income is slightly less equal today than in 1929. 
C)  the distribution of income is slightly more equal today than in 1929. 
D)  the distribution of income is much more equal today than it was in 1929. 
A)  the distribution of income today is identical to what it was in 1929. 
B)  the distribution of income is slightly less equal today than in 1929. 
C)  the distribution of income is slightly more equal today than in 1929. 
D)  the distribution of income is much more equal today than it was in 1929.

Question 20

Which of the following statements about the Supplemental Security Income (SSI) program is FALSE?

Accepted Answer

A)  It is designed to establish nationwide minimum incomes for the aged, the blind, and the disabled 
B)  Benefits are based on need. 
C)  Recipients who receive benefit payments under Social Security are also eligible for SSI. 
D)  It covers children and individuals with mental disabilities, including drug addicts and alcoholics. 
A)  It is designed to establish nationwide minimum incomes for the aged, the blind, and the disabled 
B)  Benefits are based on need. 
C)  Recipients who receive benefit payments under Social Security are also eligible for SSI. 
D)  It covers children and individuals with mental disabilities, including drug addicts and alcoholics.

Exam 30: Income, Poverty, and Health Care

Recent income distribution figures in the United States show

Inheritance is responsible for about ________ percent of the income inequality in the United States.

The effects of the national health care program on labor markets will

Determinants of the marginal productivity of labor include all of the following EXCEPT

Which of the following are determinants of differences in income?

Income in kind is defined as

Which of the following CANNOT be eliminated in a growing economy such as the U.S. economy?

The Lorenz curve is a geometric representation of

-Use the above table. What percentage of income is received by the richest 20% of the population?

The use of hospitals today is dominated by

One reason earnings tend to fall before retirement age is that

On average the productivity of an individual usually peaks when the individual is about

Income-in-kind is

All of the following lead to a difference in income EXCEPT

All of the following aim to reduce income inequality EXCEPT

The more bowed (skewed) the Lorenz curve,

With a human capital investment (such as the investment in going to college), the most important cost tends to be

The idea that the Lorenz curve should be along the 45 degree line is consistent with

Changes in the Lorenz curve since 1929 in the United States indicate that

Which of the following statements about the Supplemental Security Income (SSI) program is FALSE?

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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