Question 1

Poverty in the United States is defined as having an income that is less than the ____ level that is necessary to provide the basic necessities of life.

Accepted Answer

A)  sustainable 
B)  relative 
C)  absolute 
D)  lowest quintile 
A)  sustainable 
B)  relative 
C)  absolute 
D)  lowest quintile

Question 2

Which of the following occurs when insurance makes a person more likely to engage in risky behavior?

Accepted Answer

A)  lemon problem 
B)  moral hazard 
C)  adverse selection 
D)  risk selection 
A)  lemon problem 
B)  moral hazard 
C)  adverse selection 
D)  risk selection

Question 3

With a negative income tax featuring an $8,000 minimum level of income and a 20% tax rate,a household earning $8,000 dollars would receive a subsidy of:

Accepted Answer

A)  zero 
B)  $1,600 
C)  $6,400 
D)  $8,000 
A)  zero 
B)  $1,600 
C)  $6,400 
D)  $8,000

Question 4

Discrimination occurs when someone is denied employment on the basis of some non-economic factor such as race,religion,or gender.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following would be the most accurate description of demand for health care?

Accepted Answer

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

Question 6

A U.S.presidential candidate promises to redistribute income and encourage economic growth.Why might these goals be in conflict?

Accepted Answer

A)  The poor, on average, save more than the rich. Taxing the incomes of the rich to transfer to the poor will result in an increase in total savings. 
B)  Taxing the incomes of the rich to transfer to the poor will result in the rich saving more. 
C)  Taxing the incomes of the rich to transfer to the poor will provide disincentives for work and capital accumulation. 
D)  Taxing the incomes of the rich to transfer to the poor will provide incentives for the rich to work more to make up for income lost to taxes. 
A)  The poor, on average, save more than the rich. Taxing the incomes of the rich to transfer to the poor will result in an increase in total savings. 
B)  Taxing the incomes of the rich to transfer to the poor will result in the rich saving more. 
C)  Taxing the incomes of the rich to transfer to the poor will provide disincentives for work and capital accumulation. 
D)  Taxing the incomes of the rich to transfer to the poor will provide incentives for the rich to work more to make up for income lost to taxes.

Question 7

Which welfare program allows the working poor to receive income refunds that can be greater than the taxes they paid during the last year?

Accepted Answer

A)  SSI 
B)  TANF 
C)  EITC 
D)  Medicaid 
A)  SSI 
B)  TANF 
C)  EITC 
D)  Medicaid

Question 8

Under a progressive tax system:

Accepted Answer

A)  only the rich are taxed. 
B)  higher marginal taxes are imposed on higher incomes. 
C)  lower taxes are imposed on everyone. 
D)  everyone pays the same percent of their income for tax. 
A)  only the rich are taxed. 
B)  higher marginal taxes are imposed on higher incomes. 
C)  lower taxes are imposed on everyone. 
D)  everyone pays the same percent of their income for tax.

Question 9

Exhibit 17-1 The Lorenz Curve   Refer to Exhibit 17-1.Which of the following represents the amount of income inequality?

Accepted Answer

A)  Area A 
B)  Area B 
C)  Area C 
D)  Area (A + 
B)  
A)  Area A 
B)  Area B 
C)  Area C 
D)  Area (A + 
B)

Question 10

The official poverty definition may ____ the level of poverty because it does not include ____.

Accepted Answer

A)  overstate; cash benefits 
B)  overstate; noncash benefits 
C)  understate; cash benefits 
D)  understate; noncash benefits 
A)  overstate; cash benefits 
B)  overstate; noncash benefits 
C)  understate; cash benefits 
D)  understate; noncash benefits

Question 11

Which of the following observations concerning health care service providers is true?

Accepted Answer

A)  Health care providers possess very little market power. 
B)  Price discrimination and collusive behavior are likely to occur. 
C)  Price discrimination is uncommon in the pharmaceutical industry. 
D)  "Natural health care monopolies" are a rarity. 
A)  Health care providers possess very little market power. 
B)  Price discrimination and collusive behavior are likely to occur. 
C)  Price discrimination is uncommon in the pharmaceutical industry. 
D)  "Natural health care monopolies" are a rarity.

Question 12

U.S.national defense spending is approximately ____ the amount spent on health care.

Accepted Answer

A)  twice 
B)  four times 
C)  ten times 
D)  1/4 
A)  twice 
B)  four times 
C)  ten times 
D)  1/4

Question 13

How do insurance companies try to reduce: 1)the moral hazard problem; 2)the adverse selection problem?

Accepted Answer

Insurance companies attempt to reduce mo

Question 14

Explain why an increasing divorce rate tends to increase the inequality of income.

Accepted Answer

Divorces create two households where for

Question 15

The demand curve for human organs is upward sloping.

Accepted Answer

A) True 
 B)False

Question 16

Wage discrimination occurs when people are paid different salaries based upon:

Accepted Answer

A)  education. 
B)  ethnicity. 
C)  willingness to work. 
D)  talent. 
A)  education. 
B)  ethnicity. 
C)  willingness to work. 
D)  talent.

Question 17

When a construction firm chooses not to hire Jane as a carpenter simply because she is female,it is called:

Accepted Answer

A)  wage discrimination. 
B)  job-entry discrimination. 
C)  affirmative action. 
D)  environmental factor discrimination. 
A)  wage discrimination. 
B)  job-entry discrimination. 
C)  affirmative action. 
D)  environmental factor discrimination.

Question 18

A person covered by a generous insurance plan smokes more cigarettes than he does normally.This is an example of a:

Accepted Answer

A)  lemon problem. 
B)  moral hazard. 
C)  adverse selection. 
D)  risk selection. 
A)  lemon problem. 
B)  moral hazard. 
C)  adverse selection. 
D)  risk selection.

Question 19

Individuals who are workaholics tend to have higher incomes than individuals who are not.

Accepted Answer

The answer of Individuals who are workaholics tend to have...

Question 20

Evidence suggests that emergency care services are normal goods.

Accepted Answer

A) True 
 B)False

Exam 17: Income, Poverty, and Health Care

Poverty in the United States is defined as having an income that is less than the ____ level that is necessary to provide the basic necessities of life.

Which of the following occurs when insurance makes a person more likely to engage in risky behavior?

With a negative income tax featuring an $8,000 minimum level of income and a 20% tax rate,a household earning $8,000 dollars would receive a subsidy of:

Discrimination occurs when someone is denied employment on the basis of some non-economic factor such as race,religion,or gender.

Which of the following would be the most accurate description of demand for health care?

A U.S.presidential candidate promises to redistribute income and encourage economic growth.Why might these goals be in conflict?

Which welfare program allows the working poor to receive income refunds that can be greater than the taxes they paid during the last year?

Under a progressive tax system:

Exhibit 17-1 The Lorenz Curve Refer to Exhibit 17-1.Which of the following represents the amount of income inequality?

The official poverty definition may ____ the level of poverty because it does not include ____.

Which of the following observations concerning health care service providers is true?

U.S.national defense spending is approximately ____ the amount spent on health care.

How do insurance companies try to reduce: 1)the moral hazard problem; 2)the adverse selection problem?

Explain why an increasing divorce rate tends to increase the inequality of income.

The demand curve for human organs is upward sloping.

Wage discrimination occurs when people are paid different salaries based upon:

When a construction firm chooses not to hire Jane as a carpenter simply because she is female,it is called:

A person covered by a generous insurance plan smokes more cigarettes than he does normally.This is an example of a:

Individuals who are workaholics tend to have higher incomes than individuals who are not.

Evidence suggests that emergency care services are normal goods.

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

The official poverty definition may the level of poverty because it does not include .