Question 1

We measure a person's productive contribution in a market system by

Accepted Answer

A)  the marginal factor cost theory of the firm. 
B)  the profit maximization theory of the firm. 
C)  the marginal revenue product theory of wage determination. 
D)  the egalitarian theory of wage determination. 
A)  the marginal factor cost theory of the firm. 
B)  the profit maximization theory of the firm. 
C)  the marginal revenue product theory of wage determination. 
D)  the egalitarian theory of wage determination.

Question 2

Once the national health care program goes into effect, we can expect

Accepted Answer

A)  total expenditures on health care will decrease. 
B)  more individuals will have more incentives to make decisions that promote better health. 
C)  total expenditures on health care will increase. 
D)  moral hazard will decrease. 
A)  total expenditures on health care will decrease. 
B)  more individuals will have more incentives to make decisions that promote better health. 
C)  total expenditures on health care will increase. 
D)  moral hazard will decrease.

Question 3

Which of the following income maintenance programs is designed to establish nationwide minimum incomes for the aged, the blind, and the disabled?

Accepted Answer

A)  The Old-Age Survivors' and Disability Insurance (OASDI) program 
B)  The Supplemental Security Income (SSI) program 
C)  The Temporary Assistance to Needy Families (TANF) program 
D)  The food stamps program 
A)  The Old-Age Survivors' and Disability Insurance (OASDI) program 
B)  The Supplemental Security Income (SSI) program 
C)  The Temporary Assistance to Needy Families (TANF) program 
D)  The food stamps program

Question 4

Which of the following statements is correct?

Accepted Answer

A)  The Social Security program funnels transfers from retired individuals to the youngest children of low-income families. 
B)  Social Security is an entitlement which is available to everyone, including those who have not contributed to the fund during their active work years. 
C)  Social Security benefits are received by people who had contributed to the fund during their active work years. 
D)  As a public transfer payment, Social Security benefit is available only to the poor. 
A)  The Social Security program funnels transfers from retired individuals to the youngest children of low-income families. 
B)  Social Security is an entitlement which is available to everyone, including those who have not contributed to the fund during their active work years. 
C)  Social Security benefits are received by people who had contributed to the fund during their active work years. 
D)  As a public transfer payment, Social Security benefit is available only to the poor.

Question 5

In a Lorenz curve, perfect income equality is represented by

Accepted Answer

A)  a vertical line. 
B)  a horizontal line. 
C)  a rectangular hyperbola. 
D)  a 45-degree line originating from the origin. 
A)  a vertical line. 
B)  a horizontal line. 
C)  a rectangular hyperbola. 
D)  a 45-degree line originating from the origin.

Question 6

The incidence of absolute poverty is reduced by

Accepted Answer

A)  annual recalculations of the poverty line. 
B)  government welfare programs. 
C)  economic growth. 
D)  the size of the budget deficit. 
A)  annual recalculations of the poverty line. 
B)  government welfare programs. 
C)  economic growth. 
D)  the size of the budget deficit.

Question 7

A straight-line Lorenz curve shows

Accepted Answer

A)  an equal distribution of money income. 
B)  a greater than proportionate share of income going to middle-income households. 
C)  a high incidence of absolute poverty. 
D)  a highly unequal distribution of income. 
A)  an equal distribution of money income. 
B)  a greater than proportionate share of income going to middle-income households. 
C)  a high incidence of absolute poverty. 
D)  a highly unequal distribution of income.

Question 8

Which of the following is NOT considered to be a factor in the determination of a person's marginal productivity?

Accepted Answer

A)  Innate abilities such as high intelligence 
B)  Investment in human capital such as education 
C)  On-the-job training 
D)  The elasticity of supply of labor 
A)  Innate abilities such as high intelligence 
B)  Investment in human capital such as education 
C)  On-the-job training 
D)  The elasticity of supply of labor

Question 9

The health care market in the United States is characterized by

Accepted Answer

A)  considerable government involvement. 
B)  third-party payment of health care costs. 
C)  asymmetric information between providers and consumers. 
D)  all of the above 
A)  considerable government involvement. 
B)  third-party payment of health care costs. 
C)  asymmetric information between providers and consumers. 
D)  all of the above

Question 10

The richest 10 percent of U.S. houses hold more than two-thirds of all wealth. The problem with this statement is that

Accepted Answer

A)  it does not consider an individual's current income. 
B)  it does not consider private and public pension plans. 
C)  it is based entirely on nonhuman wealth. 
D)  it is based entirely on human wealth. 
A)  it does not consider an individual's current income. 
B)  it does not consider private and public pension plans. 
C)  it is based entirely on nonhuman wealth. 
D)  it is based entirely on human wealth.

Question 11

Other things being equal, a national health insurance program would

Accepted Answer

A)  generate higher life expectancies and lower infant mortality rates. 
B)  generate lower life expectancies and higher infant mortality rates. 
C)  increase total health care expenditures. 
D)  increase the quality of life. 
A)  generate higher life expectancies and lower infant mortality rates. 
B)  generate lower life expectancies and higher infant mortality rates. 
C)  increase total health care expenditures. 
D)  increase the quality of life.

Question 12

Some economists criticize the Lorenz curve because it

Accepted Answer

A)  accounts for differences in the size of households when it should not. 
B)  does not include the cumulative percentage of households. 
C)  does not include unreported income earned in the underground economy. 
D)  represents the inequality of lifetime income when it should just look at a specific time period. 
A)  accounts for differences in the size of households when it should not. 
B)  does not include the cumulative percentage of households. 
C)  does not include unreported income earned in the underground economy. 
D)  represents the inequality of lifetime income when it should just look at a specific time period.

Question 13

The government finances Social Security through

Accepted Answer

A)  excise taxes. 
B)  payroll taxes. 
C)  the sale of goods and services. 
D)  state taxes. 
A)  excise taxes. 
B)  payroll taxes. 
C)  the sale of goods and services. 
D)  state taxes.

Question 14

Compare and contrast the two normative standards to income distribution discussed in the text: The productivity standard and the egalitarian principle.

Accepted Answer

The productivity standard is also called

Question 15

Some economists argue that the official poverty figures overstate poverty in this country. Why?

Accepted Answer

Official poverty figures do not include

Question 16

Determinants of income differences include all of the following EXCEPT

Accepted Answer

A)  age. 
B)  marginal productivity. 
C)  moral hazard. 
D)  discrimination. 
A)  age. 
B)  marginal productivity. 
C)  moral hazard. 
D)  discrimination.

Question 17

Which of the following is an individual mandate in the new the federal government's new national health care program?

Accepted Answer

A)  Under the new program, the federal government will coordinate the establishment of health insurance exchanges. 
B)  Firms with at least 50 employees must either provide health insurance or pay fines when uninsured employees receive tax subsidies to purchase insurance. 
C)  A tax rate of 3.8 percent will be assessed on nearly all earnings above $200,000 per year for individuals and above $250,000 per year for married couples. 
D)  Nearly all U.S. residents must either purchase health insurance coverage or pay a fine of up to $750 per year for an individual (up to $2,250 per year for a family). 
A)  Under the new program, the federal government will coordinate the establishment of health insurance exchanges. 
B)  Firms with at least 50 employees must either provide health insurance or pay fines when uninsured employees receive tax subsidies to purchase insurance. 
C)  A tax rate of 3.8 percent will be assessed on nearly all earnings above $200,000 per year for individuals and above $250,000 per year for married couples. 
D)  Nearly all U.S. residents must either purchase health insurance coverage or pay a fine of up to $750 per year for an individual (up to $2,250 per year for a family).

Question 18

The Social Security Fund is designed as

Accepted Answer

A)  a pay-as-you-go system. 
B)  an investment portfolio that individual contributors can make periodic payments into. 
C)  an account that allows periodic withdrawals by contributors. 
D)  an individual account with a federal reserve bank. 
A)  a pay-as-you-go system. 
B)  an investment portfolio that individual contributors can make periodic payments into. 
C)  an account that allows periodic withdrawals by contributors. 
D)  an individual account with a federal reserve bank.

Question 19

Which of the following is not a true statement about the Lorenz curve?

Accepted Answer

A)  The Lorenz curve includes both money income and income in kind. 
B)  The Lorenz curve does not include unreported income obtained from the underground economy. 
C)  The Lorenz curve does not consider different sizes of households. 
D)  The Lorenz curve does not consider age differences among wage earners. 
A)  The Lorenz curve includes both money income and income in kind. 
B)  The Lorenz curve does not include unreported income obtained from the underground economy. 
C)  The Lorenz curve does not consider different sizes of households. 
D)  The Lorenz curve does not consider age differences among wage earners.

Question 20

The impact of technological change in the health care area has been to

Accepted Answer

A)  reduce the quality of health care while raising the costs. 
B)  reduce the cost of health care. 
C)  increase the quality of health care while decreasing the costs. 
D)  increase both the quality of health care and the costs of health care. 
A)  reduce the quality of health care while raising the costs. 
B)  reduce the cost of health care. 
C)  increase the quality of health care while decreasing the costs. 
D)  increase both the quality of health care and the costs of health care.

Exam 30: Income, Poverty, and Health Care

We measure a person's productive contribution in a market system by

Once the national health care program goes into effect, we can expect

Which of the following income maintenance programs is designed to establish nationwide minimum incomes for the aged, the blind, and the disabled?

Which of the following statements is correct?

In a Lorenz curve, perfect income equality is represented by

The incidence of absolute poverty is reduced by

A straight-line Lorenz curve shows

Which of the following is NOT considered to be a factor in the determination of a person's marginal productivity?

The health care market in the United States is characterized by

The richest 10 percent of U.S. houses hold more than two-thirds of all wealth. The problem with this statement is that

Other things being equal, a national health insurance program would

Some economists criticize the Lorenz curve because it

The government finances Social Security through

Compare and contrast the two normative standards to income distribution discussed in the text: The productivity standard and the egalitarian principle.

Some economists argue that the official poverty figures overstate poverty in this country. Why?

Determinants of income differences include all of the following EXCEPT

Which of the following is an individual mandate in the new the federal government's new national health care program?

The Social Security Fund is designed as

Which of the following is not a true statement about the Lorenz curve?

The impact of technological change in the health care area has been to

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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