Question 1

What are the problems associated with the sale of human organs?

Accepted Answer

There are several problems with the sale of human organs.First,there may be an asymmetric information problem.When people receive money for their organs,they might hide "adverse" information about their health history.Second,there is the equity issue of allocating human organs on the basis of willingness to pay.Third,it is also likely to increase heath care spending as patients and insurance companies would have to pay a higher price.

Question 2

How do taxes and government cash transfer payments alter the measured distribution of income?

Accepted Answer

A)  Taxes, because they are included in the official data on income distribution, are reflected in the data, but cash transfer payments, which redistribute income to lower income households, are not included. 
B)  Cash transfer payments are included in the official data on income distribution, but taxes are not. 
C)  Both taxes and cash transfer payments are included in the official data on income distribution 
D)  Neither taxes or cash transfer payments are included in the official data on income distribution 
A)  Taxes, because they are included in the official data on income distribution, are reflected in the data, but cash transfer payments, which redistribute income to lower income households, are not included. 
B)  Cash transfer payments are included in the official data on income distribution, but taxes are not. 
C)  Both taxes and cash transfer payments are included in the official data on income distribution 
D)  Neither taxes or cash transfer payments are included in the official data on income distribution B

Question 3

Some employers choose to discriminate as a means of ____ information costs by hiring workers from a similar background as those that were ____ productive in the past.

Accepted Answer

A)  increasing; more 
B)  reducing; more 
C)  increasing; less 
D)  reducing; less 
A)  increasing; more 
B)  reducing; more 
C)  increasing; less 
D)  reducing; less B

Question 4

The existence of differences between the average earnings of men and women:

Accepted Answer

A)  proves the existence of discrimination. 
B)  may be partially due to factors other than wage discrimination. 
C)  proves that men on average invest more in human capital than do women. 
D)  indicates that men are on average smarter than women are. 
A)  proves the existence of discrimination. 
B)  may be partially due to factors other than wage discrimination. 
C)  proves that men on average invest more in human capital than do women. 
D)  indicates that men are on average smarter than women are.

Question 5

In the United States,the supply curve for human organs currently is:

Accepted Answer

A)  vertical. 
B)  horizontal. 
C)  downward sloping. 
D)  upward sloping. 
A)  vertical. 
B)  horizontal. 
C)  downward sloping. 
D)  upward sloping.

Question 6

Which of the following is a close approximation of the price elasticity of demand for health care?

Accepted Answer

A)  0.2 
B)  0.8 
C)  1.8 
D)  4.0 
A)  0.2 
B)  0.8 
C)  1.8 
D)  4.0

Question 7

An insurance company finds that it insured an adverse selection of largely ill patients.It is forced to increase insurance premiums to reduce losses.How does this aggravate the adverse selection problem?

Accepted Answer

As insurance premiums increase healthy e

Question 8

Based on U.S.law that requiring organs to be donated,the supply curve for human organs currently is:

Accepted Answer

A)  elastic. 
B)  perfectly inelastic. 
C)  unit elastic. 
D)  perfectly elastic. 
A)  elastic. 
B)  perfectly inelastic. 
C)  unit elastic. 
D)  perfectly elastic.

Question 9

The new laws associated with health care reform dictate that 60-year-old patients cannot be charged more than ____ times as 25-year-old patients.

Accepted Answer

A)  three 
B)  five 
C)  seven 
D)  ten 
A)  three 
B)  five 
C)  seven 
D)  ten

Question 10

In the United States,the supply curve for human organs currently is:

Accepted Answer

A)  vertical. 
B)  horizontal. 
C)  downward sloping. 
D)  upward sloping. 
A)  vertical. 
B)  horizontal. 
C)  downward sloping. 
D)  upward sloping.

Question 11

Which of the following statements is not consistent with the "environmental explanation" of wage and productivity?

Accepted Answer

A)  "Women are more likely than men to leave the labor force to care for children and hence acquire less work experience than do men." 
B)  "Blacks and other minorities do not receive, on average, the same quality of education as whites." 
C)  "Boys are more likely than girls to receive moral and financial support from their families to attend college." 
D)  "Employers discriminate systematically against blacks and women." 
A)  "Women are more likely than men to leave the labor force to care for children and hence acquire less work experience than do men." 
B)  "Blacks and other minorities do not receive, on average, the same quality of education as whites." 
C)  "Boys are more likely than girls to receive moral and financial support from their families to attend college." 
D)  "Employers discriminate systematically against blacks and women."

Question 12

In the Santa Rita mines in Arizona in 1870,Mexican miners received about $12 per month while "American" miners received $70.Although the wages of both groups tended to rise over time,the gap persisted until at least 1910.Mexican and American miners did the same work and were equally productive.Economists call this pay differential:

Accepted Answer

A)  prejudicial differentials. 
B)  compensating differentials. 
C)  wage discrimination. 
D)  job entry discrimination. 
A)  prejudicial differentials. 
B)  compensating differentials. 
C)  wage discrimination. 
D)  job entry discrimination.

Question 13

Taxes ____ the incentive to work,since they ____ an individual's after-tax earnings.

Accepted Answer

A)  reduce; increase 
B)  increase; reduce 
C)  increase; increase 
D)  reduce; reduce 
A)  reduce; increase 
B)  increase; reduce 
C)  increase; increase 
D)  reduce; reduce

Question 14

In the United States,the current dollar price of transplantable organs is:

Accepted Answer

A)  zero. 
B)  indeterminate. 
C)  determined by the market mechanism. 
D)  dependent on the supply of organs. 
A)  zero. 
B)  indeterminate. 
C)  determined by the market mechanism. 
D)  dependent on the supply of organs.

Question 15

An example of in-kind income is:

Accepted Answer

A)  a welfare payment. 
B)  a cash grant. 
C)  a housing subsidy. 
D)  an unemployment check. 
A)  a welfare payment. 
B)  a cash grant. 
C)  a housing subsidy. 
D)  an unemployment check.

Question 16

Is wage discrimination more likely or less likely in competitive markets?

Accepted Answer

Competitive firms that discriminate may

Question 17

Which of the following changes would tend to increase measured income inequality?

Accepted Answer

A)  An increasing proportion of retired people in the population. 
B)  An increase in the number of divorced people. 
C)  An increasing proportion of high income earning women marry high income earning men. 
D)  All of the above 
A)  An increasing proportion of retired people in the population. 
B)  An increase in the number of divorced people. 
C)  An increasing proportion of high income earning women marry high income earning men. 
D)  All of the above

Question 18

The principle of diminishing marginal utility can potentially be used to support policies that redistribute income.This principle suggests that increases in income for an individual will generate less additional happiness the higher the level of income.

Accepted Answer

A) True 
 B)False

Question 19

At any moment in time,middle-age people tend to have higher incomes than both younger and older people do.

Accepted Answer

A) True 
 B)False

Question 20

Differences in income can be accounted for by differences in:

Accepted Answer

A)  age. 
B)  education. 
C)  preferences toward leisure. 
D)  all of the above. 
A)  age. 
B)  education. 
C)  preferences toward leisure. 
D)  all of the above.

Exam 17: Income, Poverty, and Health Care

What are the problems associated with the sale of human organs?

How do taxes and government cash transfer payments alter the measured distribution of income?

Some employers choose to discriminate as a means of ____ information costs by hiring workers from a similar background as those that were ____ productive in the past.

The existence of differences between the average earnings of men and women:

In the United States,the supply curve for human organs currently is:

Which of the following is a close approximation of the price elasticity of demand for health care?

An insurance company finds that it insured an adverse selection of largely ill patients.It is forced to increase insurance premiums to reduce losses.How does this aggravate the adverse selection problem?

Based on U.S.law that requiring organs to be donated,the supply curve for human organs currently is:

The new laws associated with health care reform dictate that 60-year-old patients cannot be charged more than ____ times as 25-year-old patients.

In the United States,the supply curve for human organs currently is:

Which of the following statements is not consistent with the "environmental explanation" of wage and productivity?

Taxes ____ the incentive to work,since they ____ an individual's after-tax earnings.

In the United States,the current dollar price of transplantable organs is:

An example of in-kind income is:

Is wage discrimination more likely or less likely in competitive markets?

Which of the following changes would tend to increase measured income inequality?

The principle of diminishing marginal utility can potentially be used to support policies that redistribute income.This principle suggests that increases in income for an individual will generate less additional happiness the higher the level of income.

At any moment in time,middle-age people tend to have higher incomes than both younger and older people do.

Differences in income can be accounted for by differences in:

The Role and Method of Economics

Economics: Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Markets in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Aggregate Demand and Aggregate Supply

The Aggregate Expenditure Model

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Trade

International Finance

Filters

Some employers choose to discriminate as a means of information costs by hiring workers from a similar background as those that were productive in the past.

Taxes the incentive to work,since they an individual's after-tax earnings.