Question 1

The new federal government's national health care program imposes the following regulations on health care insurers EXCEPT

Accepted Answer

A)  health insurers must cover all who apply, including people who already have health problems. 
B)  all new plans must cover certain preventive services such as mammograms and colonoscopies but must be paid 100% by patients. 
C)  a ceiling is imposed on the rate of increase in health insurance prices charged to elderly people. 
D)  insurance companies will be prohibited from imposing lifetime dollar limits on essential benefits, like hospital stays. 
A)  health insurers must cover all who apply, including people who already have health problems. 
B)  all new plans must cover certain preventive services such as mammograms and colonoscopies but must be paid 100% by patients. 
C)  a ceiling is imposed on the rate of increase in health insurance prices charged to elderly people. 
D)  insurance companies will be prohibited from imposing lifetime dollar limits on essential benefits, like hospital stays.

Question 2

The contributive standard (merit standard) for distributing income implies that

Accepted Answer

A)  income should be distributed equally. 
B)  income should be distributed according to need. 
C)  income should be distributed according to the marginal productivity of workers. 
D)  a transfer should be contributed to an individual above his or her contribution to net output. 
A)  income should be distributed equally. 
B)  income should be distributed according to need. 
C)  income should be distributed according to the marginal productivity of workers. 
D)  a transfer should be contributed to an individual above his or her contribution to net output.

Question 3

Some economists criticize the Lorenz curve because it

Accepted Answer

A)  includes too many things in measuring income, such as food stamps, housing aid, and other government programs. 
B)  does not account for the effect of age on a family's income. 
C)  measures unreported income earned in the underground economy. 
D)  uses after-tax income when pre-tax income is more appropriate. 
A)  includes too many things in measuring income, such as food stamps, housing aid, and other government programs. 
B)  does not account for the effect of age on a family's income. 
C)  measures unreported income earned in the underground economy. 
D)  uses after-tax income when pre-tax income is more appropriate.

Question 4

If you believe that a worker should be paid on the basis of what he or she produced, you believe in

Accepted Answer

A)  the egalitarian principle. 
B)  the productivity standard. 
C)  the benefits standard. 
D)  the comparative worth principle. 
A)  the egalitarian principle. 
B)  the productivity standard. 
C)  the benefits standard. 
D)  the comparative worth principle.

Question 5

When examining the financial status of households, wealth is

Accepted Answer

A)  synonymous with income. 
B)  a flow variable whereas income is a stock variable. 
C)  a stock variable and includes both tangible assets and human capital. 
D)  not as important as income because wealth does not change over time. 
A)  synonymous with income. 
B)  a flow variable whereas income is a stock variable. 
C)  a stock variable and includes both tangible assets and human capital. 
D)  not as important as income because wealth does not change over time.

Question 6

Which of the following statements regarding the Lorenz curve is FALSE?

Accepted Answer

A)  A Lorenz curve is a geometric representation of the distribution of income. 
B)  A Lorenz curve that is perfectly straight represents complete income equality. 
C)  The less bowed is a Lorenz curve, the less equally income is distributed. 
D)  The more bowed is a Lorenz curve, the more unequally income is distributed. 
A)  A Lorenz curve is a geometric representation of the distribution of income. 
B)  A Lorenz curve that is perfectly straight represents complete income equality. 
C)  The less bowed is a Lorenz curve, the less equally income is distributed. 
D)  The more bowed is a Lorenz curve, the more unequally income is distributed.

Question 7

Much of a person's increased productivity can be linked to

Accepted Answer

A)  on-the-job training. 
B)  the prevalent marginal tax rate. 
C)  the price elasticity of demand for the product. 
D)  the income elasticity of demand for the product. 
A)  on-the-job training. 
B)  the prevalent marginal tax rate. 
C)  the price elasticity of demand for the product. 
D)  the income elasticity of demand for the product.

Question 8

The purpose of the Temporary Assistance to Needy Families program is

Accepted Answer

A)  to provide rebates of Social Security taxes to low-income workers. 
B)  to provide cash assistance and supportive services to assist the family, helping them achieve economic self-sufficiency. 
C)  to provide a minimum income for the aged, blind, and the disabled. 
D)  to supplement Social Security for the elderly with medical problems. 
A)  to provide rebates of Social Security taxes to low-income workers. 
B)  to provide cash assistance and supportive services to assist the family, helping them achieve economic self-sufficiency. 
C)  to provide a minimum income for the aged, blind, and the disabled. 
D)  to supplement Social Security for the elderly with medical problems.

Question 9

A Lorenz curve that represents an unequal income distribution is

Accepted Answer

A)  a straight line starting at the origin. 
B)  a straight line starting at 100% 
C)  a bowed curved. 
D)  a line that has a kink in the middle of it. 
A)  a straight line starting at the origin. 
B)  a straight line starting at 100% 
C)  a bowed curved. 
D)  a line that has a kink in the middle of it.

Question 10

The age-earning cycle usually begins

Accepted Answer

A)  at relatively high income levels. 
B)  at relatively low income levels. 
C)  once a worker reaches 25 years of age. 
D)  only when a worker is employed full time. 
A)  at relatively high income levels. 
B)  at relatively low income levels. 
C)  once a worker reaches 25 years of age. 
D)  only when a worker is employed full time.

Question 11

-Refer to the above figure. For which Lorenz curve does the richest 40 percent make 50 percent of the nation's money income?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
A)  A 
B)  B 
C)  C 
D)  D

Question 12

The graph which represents the distribution of income in an economy is called the

Accepted Answer

A)  Laffer curve. 
B)  Lorenz curve. 
C)  distribution curve. 
D)  aggregate demand curve. 
A)  Laffer curve. 
B)  Lorenz curve. 
C)  distribution curve. 
D)  aggregate demand curve.

Question 13

The learning curve suggests that an individual will

Accepted Answer

A)  receive the same income throughout a career. 
B)  gain experience and increase productivity over time. 
C)  be subject to frequent spells of unemployment. 
D)  have an income that falls over time. 
A)  receive the same income throughout a career. 
B)  gain experience and increase productivity over time. 
C)  be subject to frequent spells of unemployment. 
D)  have an income that falls over time.

Question 14

"To each exactly the same" refers to

Accepted Answer

A)  the productivity standard. 
B)  the free market doctrine. 
C)  the egalitarian principle. 
D)  the Lorenz curve. 
A)  the productivity standard. 
B)  the free market doctrine. 
C)  the egalitarian principle. 
D)  the Lorenz curve.

Question 15

In the year 2010, the United States spent about

Accepted Answer

A)  16 percent of GDP on health care. 
B)  100 percent of GDP on health care. 
C)  6 percent of GDP on health care. 
D)  2 percent of GDP on health care. 
A)  16 percent of GDP on health care. 
B)  100 percent of GDP on health care. 
C)  6 percent of GDP on health care. 
D)  2 percent of GDP on health care.

Question 16

A Lorenz curve measures the ________ on the vertical axis.

Accepted Answer

A)  cumulative percentage of money income 
B)  cumulative percentage of family wealth 
C)  cumulative percentage of families 
D)  demand of families on welfare 
A)  cumulative percentage of money income 
B)  cumulative percentage of family wealth 
C)  cumulative percentage of families 
D)  demand of families on welfare

Question 17

Which country has the highest per capita health care expenditures in the world?

Accepted Answer

A)  Canada 
B)  France 
C)  United States 
D)  Japan 
A)  Canada 
B)  France 
C)  United States 
D)  Japan

Question 18

The age-earnings cycle is

Accepted Answer

A)  the distribution of money income by age. 
B)  the distribution of wealth by age. 
C)  the relationship between earnings while working and retirement benefits for an individual. 
D)  the regular earnings profile of an individual throughout his or her lifetime. 
A)  the distribution of money income by age. 
B)  the distribution of wealth by age. 
C)  the relationship between earnings while working and retirement benefits for an individual. 
D)  the regular earnings profile of an individual throughout his or her lifetime.

Question 19

Current income maintenance programs

Accepted Answer

A)  often provide benefits to people who are working and earning substantially more than the poverty level. 
B)  reduce the incentive of recipients to work. 
C)  have safeguards to ensure that recipients work whenever physically able. 
D)  fail to make the income distribution more equal. 
A)  often provide benefits to people who are working and earning substantially more than the poverty level. 
B)  reduce the incentive of recipients to work. 
C)  have safeguards to ensure that recipients work whenever physically able. 
D)  fail to make the income distribution more equal.

Question 20

Compared to a sampling of other developed nations, the U.S. income distribution is more unequal than many others. What accounts for this?

Accepted Answer

A)  The lowest-income families in the United States earn much less than the lowest-income households in other nations. 
B)  Marginal income tax rates are much higher in the United States than in any other nation. 
C)  The highest-income families in the United States earn much more than the highest-income households in other nations. 
D)  Other nations manipulate their data to look better. 
A)  The lowest-income families in the United States earn much less than the lowest-income households in other nations. 
B)  Marginal income tax rates are much higher in the United States than in any other nation. 
C)  The highest-income families in the United States earn much more than the highest-income households in other nations. 
D)  Other nations manipulate their data to look better.

Exam 30: Income, Poverty, and Health Care

The new federal government's national health care program imposes the following regulations on health care insurers EXCEPT

The contributive standard (merit standard) for distributing income implies that

Some economists criticize the Lorenz curve because it

If you believe that a worker should be paid on the basis of what he or she produced, you believe in

When examining the financial status of households, wealth is

Which of the following statements regarding the Lorenz curve is FALSE?

Much of a person's increased productivity can be linked to

The purpose of the Temporary Assistance to Needy Families program is

A Lorenz curve that represents an unequal income distribution is

The age-earning cycle usually begins

-Refer to the above figure. For which Lorenz curve does the richest 40 percent make 50 percent of the nation's money income?

The graph which represents the distribution of income in an economy is called the

The learning curve suggests that an individual will

"To each exactly the same" refers to

In the year 2010, the United States spent about

A Lorenz curve measures the ________ on the vertical axis.

Which country has the highest per capita health care expenditures in the world?

The age-earnings cycle is

Current income maintenance programs

Compared to a sampling of other developed nations, the U.S. income distribution is more unequal than many others. What accounts for this?

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

Filters