Question 1

Which of the following is considered a contributive standard for the distribution of income?

Accepted Answer

A)  rewarding workers according to their productivity 
B)  rewarding workers according to their needs 
C)  rewarding workers according to the number of their dependents 
D)  all of the above 
A)  rewarding workers according to their productivity 
B)  rewarding workers according to their needs 
C)  rewarding workers according to the number of their dependents 
D)  all of the above

Question 2

The more bowed the Lorenz curve, the

Accepted Answer

A)  richer the society. 
B)  more unequal the distribution of money income. 
C)  poorer the society. 
D)  more equal the distribution of income. 
A)  richer the society. 
B)  more unequal the distribution of money income. 
C)  poorer the society. 
D)  more equal the distribution of income.

Question 3

The official definition of poverty is

Accepted Answer

A)  exactly the 12 percent of U.S. residents with the lowest incomes. 
B)  exactly the 20 percent of U.S. residents with the lowest incomes. 
C)  an absolute measure. 
D)  a relative measure. 
A)  exactly the 12 percent of U.S. residents with the lowest incomes. 
B)  exactly the 20 percent of U.S. residents with the lowest incomes. 
C)  an absolute measure. 
D)  a relative measure.

Question 4

The lowest percentage of the U.S. population in poverty is found when using which measurement of household resources?

Accepted Answer

A)  Private income only 
B)  Private income plus cash benefits 
C)  Private income with cash and in-kind benefits 
D)  Private income with Social Security payments subtracted 
A)  Private income only 
B)  Private income plus cash benefits 
C)  Private income with cash and in-kind benefits 
D)  Private income with Social Security payments subtracted

Question 5

When poverty is defined by an absolute real income level, what will happen to the poverty rate if income per capita in a country continues to grow?

Accepted Answer

A)  The poverty rate will increase forever. 
B)  The poverty rate will eventually be zero. 
C)  The poverty rate will increase and then decrease. 
D)  The poverty rate will never change. 
A)  The poverty rate will increase forever. 
B)  The poverty rate will eventually be zero. 
C)  The poverty rate will increase and then decrease. 
D)  The poverty rate will never change.

Question 6

The age-earning cycle shows an individual typically earning

Accepted Answer

A)  a constant income (adjusted for inflation) over the entire working life of the worker. 
B)  an income that cycles upward and downward as an individual ages. 
C)  an income that increases with age, peaks, and then falls as retirement approaches. 
D)  an income that declines until age 30-35 and then increases rapidly. 
A)  a constant income (adjusted for inflation) over the entire working life of the worker. 
B)  an income that cycles upward and downward as an individual ages. 
C)  an income that increases with age, peaks, and then falls as retirement approaches. 
D)  an income that declines until age 30-35 and then increases rapidly.

Question 7

The egalitarian principle refers to:

Accepted Answer

A)  "To each according to her need." 
B)  "To each exactly the same." 
C)  "To each according to her productivity." 
D)  "To each according to his ability." 
A)  "To each according to her need." 
B)  "To each exactly the same." 
C)  "To each according to her productivity." 
D)  "To each according to his ability."

Question 8

All of the following contribute to income inequality EXCEPT

Accepted Answer

A)  differences in education and training. 
B)  differences in job tastes. 
C)  differences in talent. 
D)  government transfer programs. 
A)  differences in education and training. 
B)  differences in job tastes. 
C)  differences in talent. 
D)  government transfer programs.

Question 9

How can absolute poverty be eliminated? How can relative poverty be eliminated? Does the elimination of one lead to the elimination of the other? Explain.

Accepted Answer

Absolute poverty can be eliminated by ec

Question 10

The effects of the national health care program on goods and services markets will

Accepted Answer

A)  increase the marginal cost of the firm. 
B)  increase the quantity produced of the firm. 
C)  consumers will pay lower prices for many goods and services. 
D)  decrease the quantity demanded for all goods and services. 
A)  increase the marginal cost of the firm. 
B)  increase the quantity produced of the firm. 
C)  consumers will pay lower prices for many goods and services. 
D)  decrease the quantity demanded for all goods and services.

Question 11

Wealth is considered to be a

Accepted Answer

A)  nontaxable stream of funds. 
B)  flow. 
C)  stock. 
D)  resource. 
A)  nontaxable stream of funds. 
B)  flow. 
C)  stock. 
D)  resource.

Question 12

The opportunity cost of going to college for a student receiving a scholarship

Accepted Answer

A)  is the income that she would have earned if she did not go to college. 
B)  is the risk of dropping out. 
C)  is the food and living expenses that she has to purchase while in college. 
D)  is zero because she does not have to pay tuition. 
A)  is the income that she would have earned if she did not go to college. 
B)  is the risk of dropping out. 
C)  is the food and living expenses that she has to purchase while in college. 
D)  is zero because she does not have to pay tuition.

Question 13

The most widely used measure of income inequality is

Accepted Answer

A)  the Bureau of Labor Statistics' cost-of-living index. 
B)  the Laffer curve. 
C)  the Lorenz curve. 
D)  the Gemini coefficient. 
A)  the Bureau of Labor Statistics' cost-of-living index. 
B)  the Laffer curve. 
C)  the Lorenz curve. 
D)  the Gemini coefficient.

Question 14

The earnings of most people

Accepted Answer

A)  increase steadily until retirement. 
B)  increase with age until around age 50 due to increased experience, training, and hours worked. 
C)  increase with age until around age 40 due to increased experience and hours worked. 
D)  increase with age until around age 60 due to increased experience, training, and hours worked, then level off as hours worked levels off. 
A)  increase steadily until retirement. 
B)  increase with age until around age 50 due to increased experience, training, and hours worked. 
C)  increase with age until around age 40 due to increased experience and hours worked. 
D)  increase with age until around age 60 due to increased experience, training, and hours worked, then level off as hours worked levels off.

Question 15

The following are all determinants of income differences examined in the text EXCEPT

Accepted Answer

A)  age. 
B)  marginal productivity. 
C)  inheritance. 
D)  height. 
A)  age. 
B)  marginal productivity. 
C)  inheritance. 
D)  height.

Question 16

Economic discrimination against minorities exists when

Accepted Answer

A)  minorities have less education and training than whites. 
B)  minorities are paid less than whites on average. 
C)  minorities are paid less than whites with the same education, experience, and training. 
D)  minorities are in different occupations than whites. 
A)  minorities have less education and training than whites. 
B)  minorities are paid less than whites on average. 
C)  minorities are paid less than whites with the same education, experience, and training. 
D)  minorities are in different occupations than whites.

Question 17

Which of the following is NOT a normative standard for income distribution?

Accepted Answer

A)  the productivity standard 
B)  the egalitarian principle 
C)  rewarding people according to merit 
D)  All of the above are normative standards. 
A)  the productivity standard 
B)  the egalitarian principle 
C)  rewarding people according to merit 
D)  All of the above are normative standards.

Question 18

Which income maintenance program was started to support the nation's farmers?

Accepted Answer

A)  Supplemental Security Income 
B)  Food Stamps 
C)  Earned Income Tax Credit Program 
D)  AFDC 
A)  Supplemental Security Income 
B)  Food Stamps 
C)  Earned Income Tax Credit Program 
D)  AFDC

Question 19

The Lorenz curve shows what portion of total money income is accounted for by

Accepted Answer

A)  different proportions of a country's households. 
B)  only the wealthiest citizens. 
C)  only poor people. 
D)  taxpaying citizens only. 
A)  different proportions of a country's households. 
B)  only the wealthiest citizens. 
C)  only poor people. 
D)  taxpaying citizens only.

Question 20

Which of the following is NOT correct regarding the theories of income distribution?

Accepted Answer

A)  Dealing with how income ought to be distributed is a normative issue. 
B)  The productivity standard for the distribution of income is stated "to each according to what they produce." 
C)  The egalitarian principle of income distribution is "to each exactly the same." 
D)  Dealing with how income should be distributed is a positive economic issue. 
A)  Dealing with how income ought to be distributed is a normative issue. 
B)  The productivity standard for the distribution of income is stated "to each according to what they produce." 
C)  The egalitarian principle of income distribution is "to each exactly the same." 
D)  Dealing with how income should be distributed is a positive economic issue.

Exam 30: Income, Poverty, and Health Care

Which of the following is considered a contributive standard for the distribution of income?

The more bowed the Lorenz curve, the

The official definition of poverty is

The lowest percentage of the U.S. population in poverty is found when using which measurement of household resources?

When poverty is defined by an absolute real income level, what will happen to the poverty rate if income per capita in a country continues to grow?

The age-earning cycle shows an individual typically earning

The egalitarian principle refers to:

All of the following contribute to income inequality EXCEPT

How can absolute poverty be eliminated? How can relative poverty be eliminated? Does the elimination of one lead to the elimination of the other? Explain.

The effects of the national health care program on goods and services markets will

Wealth is considered to be a

The opportunity cost of going to college for a student receiving a scholarship

The most widely used measure of income inequality is

The earnings of most people

The following are all determinants of income differences examined in the text EXCEPT

Economic discrimination against minorities exists when

Which of the following is NOT a normative standard for income distribution?

Which income maintenance program was started to support the nation's farmers?

The Lorenz curve shows what portion of total money income is accounted for by

Which of the following is NOT correct regarding the theories of income distribution?

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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