Question 1

Most Americans experience significant fluctuations in their economic well-being from one year to the next.

Accepted Answer

A) True 
 B)False

Question 2

Adverse selection problems in health insurance are reduced by all of the following except:

Accepted Answer

A)  requiring physical exams. 
B)  requiring patients to pay higher deductibles. 
C)  insuring entire groups. 
D)  by limiting the period of open enrollment in health insurance plans. 
A)  requiring physical exams. 
B)  requiring patients to pay higher deductibles. 
C)  insuring entire groups. 
D)  by limiting the period of open enrollment in health insurance plans.

Question 3

When the economy is in a recession,____ rises and poverty ____.

Accepted Answer

A)  unemployment; decreases 
B)  employment; decreases 
C)  unemployment; increases 
D)  employment; increases 
A)  unemployment; decreases 
B)  employment; decreases 
C)  unemployment; increases 
D)  employment; increases

Question 4

Which of the following represents in-kind income?

Accepted Answer

A)  food stamps 
B)  a public housing subsidy 
C)  a school lunch program 
D)  all of the above 
A)  food stamps 
B)  a public housing subsidy 
C)  a school lunch program 
D)  all of the above

Question 5

The quantity of medical care demanded appears to be highly sensitive to changes in price.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is a source of inequality in incomes?

Accepted Answer

A)  job preferences 
B)  willingness to take risks 
C)  differences in investment in human capital. 
D)  All of the above are correct. 
A)  job preferences 
B)  willingness to take risks 
C)  differences in investment in human capital. 
D)  All of the above are correct.

Question 7

Since 1935,the proportion of income received by the top 5 percent of Americans has:

Accepted Answer

A)  increased substantially. 
B)  increased minimally. 
C)  decreased minimally. 
D)  decreased substantially. 
A)  increased substantially. 
B)  increased minimally. 
C)  decreased minimally. 
D)  decreased substantially.

Question 8

Women in the workplace seem to be narrowing the wage gap with males.What might be the cause of this shift during the past 25 years?

Accepted Answer

Skills and human capital: Women have bee

Question 9

Which of the following observations would be valid if the Gini coefficient is equal to zero?

Accepted Answer

A)  Perfect income inequality 
B)  Greater degree of income inequality 
C)  Lorenz curve overlaps the line of perfect income equality 
D)  Unequal distribution of income 
A)  Perfect income inequality 
B)  Greater degree of income inequality 
C)  Lorenz curve overlaps the line of perfect income equality 
D)  Unequal distribution of income

Question 10

Investment in health care does bear similarities to investment in human or physical capital.

Accepted Answer

A) True 
 B)False

Question 11

There is a strong,positive correlation between educational attainment and lifetime earnings.

Accepted Answer

A) True 
 B)False

Question 12

Exhibit 17-1 The Lorenz Curve   Refer to Exhibit 17-1.The Gini coefficient,G,is obtained by:

Accepted Answer

A)  adding area A and area B 
B)  dividing area A by area (B+
C) . 
C)  adding area A and area B. 
D)  dividing area A by area (A + 
B) . 
A)  adding area A and area B 
B)  dividing area A by area (B+
C) . 
C)  adding area A and area B. 
D)  dividing area A by area (A + 
B) .

Question 13

Which of the following factors leads to differences in income across individuals?

Accepted Answer

A)  the level of skills possessed by an individual 
B)  the quality of human capital and education 
C)  preferences for work over leisure 
D)  all of the above 
A)  the level of skills possessed by an individual 
B)  the quality of human capital and education 
C)  preferences for work over leisure 
D)  all of the above

Question 14

Evaluate the accuracy of the following statement: Since health care is a necessity,the demand for health care will be perfectly inelastic.

Accepted Answer

Health care is certainly a necessity in

Question 15

As a percentage of national income,the U.S.spends more money on health care than any other industrialized nation.

Accepted Answer

A) True 
 B)False

Question 16

Unequal incomes can arise from:

Accepted Answer

A)  discrimination. 
B)  worker preferences. 
C)  differences in educational backgrounds. 
D)  all of the above. 
A)  discrimination. 
B)  worker preferences. 
C)  differences in educational backgrounds. 
D)  all of the above.

Question 17

A valid argument against redistributing income to achieve complete equality is that:

Accepted Answer

A)  income equality would destroy the social cohesiveness that exists among different income groupings. 
B)  this would eliminate the monetary incentives to work and produce. 
C)  the cost of obtaining the equality would be so deflationary as to promote economic instability. 
D)  income equality would imply class segregation based on factors such as sex or race, since income would be constant. 
A)  income equality would destroy the social cohesiveness that exists among different income groupings. 
B)  this would eliminate the monetary incentives to work and produce. 
C)  the cost of obtaining the equality would be so deflationary as to promote economic instability. 
D)  income equality would imply class segregation based on factors such as sex or race, since income would be constant.

Question 18

If there were a decreased fraction of divorced couples and an increase in the proportion of two-income families:

Accepted Answer

A)  both would tend to increase measured income inequality. 
B)  both would tend to decrease measured income inequality. 
C)  the decreased fraction of divorced couples would tend to increase measured income inequality, but the increase in the proportion of two-income families would tend to decrease measured income inequality. 
D)  the decreased fraction of divorced couples would tend to decrease measured income inequality, but the increase in the proportion of two-income families would tend to increase measured income inequality. 
A)  both would tend to increase measured income inequality. 
B)  both would tend to decrease measured income inequality. 
C)  the decreased fraction of divorced couples would tend to increase measured income inequality, but the increase in the proportion of two-income families would tend to decrease measured income inequality. 
D)  the decreased fraction of divorced couples would tend to decrease measured income inequality, but the increase in the proportion of two-income families would tend to increase measured income inequality.

Question 19

When a child-care agency refuses to hire Jack simply because he is male,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 20

High school graduates in the United States earn roughly ____ of those with Bachelor's degrees.

Accepted Answer

A)  one-third 
B)  one-fourth 
C)  one-half 
D)  two-thirds 
A)  one-third 
B)  one-fourth 
C)  one-half 
D)  two-thirds

Exam 17: Income, Poverty, and Health Care

Most Americans experience significant fluctuations in their economic well-being from one year to the next.

Adverse selection problems in health insurance are reduced by all of the following except:

When the economy is in a recession,____ rises and poverty ____.

Which of the following represents in-kind income?

The quantity of medical care demanded appears to be highly sensitive to changes in price.

Which of the following is a source of inequality in incomes?

Since 1935,the proportion of income received by the top 5 percent of Americans has:

Women in the workplace seem to be narrowing the wage gap with males.What might be the cause of this shift during the past 25 years?

Which of the following observations would be valid if the Gini coefficient is equal to zero?

Investment in health care does bear similarities to investment in human or physical capital.

There is a strong,positive correlation between educational attainment and lifetime earnings.

Exhibit 17-1 The Lorenz Curve Refer to Exhibit 17-1.The Gini coefficient,G,is obtained by:

Which of the following factors leads to differences in income across individuals?

Evaluate the accuracy of the following statement: Since health care is a necessity,the demand for health care will be perfectly inelastic.

As a percentage of national income,the U.S.spends more money on health care than any other industrialized nation.

Unequal incomes can arise from:

A valid argument against redistributing income to achieve complete equality is that:

If there were a decreased fraction of divorced couples and an increase in the proportion of two-income families:

When a child-care agency refuses to hire Jack simply because he is male,it is called:

High school graduates in the United States earn roughly ____ of those with Bachelor's degrees.

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

When the economy is in a recession, rises and poverty .