Question 1

The poverty rate in the United States was

Accepted Answer

A)  12 percent in 2014. 
B)  higher in 2014 than in 1960. 
C)  about the same in 2014 as in 1993. 
D)  nearly 20 percent in 2014. 
A)  12 percent in 2014. 
B)  higher in 2014 than in 1960. 
C)  about the same in 2014 as in 1993. 
D)  nearly 20 percent in 2014.

Question 2

The former food-stamp program is now the Supplemental Nutrition Assistance Program (SNAP) and eligible households now receive

Accepted Answer

A)  vouchers for food purchases. 
B)  specialized debit cards that get monthly deposits of electronic money from the government. 
C)  credit cards, and they forward the monthly bills to the government. 
D)  cash payments. 
A)  vouchers for food purchases. 
B)  specialized debit cards that get monthly deposits of electronic money from the government. 
C)  credit cards, and they forward the monthly bills to the government. 
D)  cash payments.

Question 3

In 2014, the portion of the U.S. population that lived in poverty was

Accepted Answer

A)  about 1 percent. 
B)  about 5 percent. 
C)  about 15 percent. 
D)  about 25 percent. 
A)  about 1 percent. 
B)  about 5 percent. 
C)  about 15 percent. 
D)  about 25 percent.

Question 4

Wealth in the United States is

Accepted Answer

A)  distributed in a way that reduces the degree of income inequality. 
B)  more unequally distributed than is income. 
C)  less unequally distributed than is income. 
D)  distributed in a way that has no effect on income inequality. 
A)  distributed in a way that reduces the degree of income inequality. 
B)  more unequally distributed than is income. 
C)  less unequally distributed than is income. 
D)  distributed in a way that has no effect on income inequality.

Question 5

Which of the following Gini ratios would indicate the least amount of income inequality?

Accepted Answer

A)  0.20 
B)  0.40 
C)  0.60 
D)  0.80 
A)  0.20 
B)  0.40 
C)  0.60 
D)  0.80

Question 6

Which of the following measurement issues makes interpretation of U.S. poverty rates difficult?

Accepted Answer

A)  Poverty statistics measure income rather than consumption, and some families may be able to consume above the official poverty line. 
B)  The high cost of living in rural areas tends to result in the understatement of poverty. 
C)  Most people below the poverty line have substantial unreported income. 
D)  The poverty rate is adjusted for every urban and rural area, so people's poverty status changes whenever they move. 
A)  Poverty statistics measure income rather than consumption, and some families may be able to consume above the official poverty line. 
B)  The high cost of living in rural areas tends to result in the understatement of poverty. 
C)  Most people below the poverty line have substantial unreported income. 
D)  The poverty rate is adjusted for every urban and rural area, so people's poverty status changes whenever they move.

Question 7

In a supply and demand model of the labor market for nonpreferred workers, a reduction in employer prejudice against nonpreferred workers will

Accepted Answer

A)  increase supply, raise the wage rate, and decrease the employment of these workers. 
B)  decrease supply, lower the wage rate, and decrease employment of these workers. 
C)  decrease demand, lower the wage rate, and decrease the employment of these workers. 
D)  increase demand, raise the wage rate, and increase the employment of these workers. 
A)  increase supply, raise the wage rate, and decrease the employment of these workers. 
B)  decrease supply, lower the wage rate, and decrease employment of these workers. 
C)  decrease demand, lower the wage rate, and decrease the employment of these workers. 
D)  increase demand, raise the wage rate, and increase the employment of these workers.

Question 8

In the taste-for-discrimination model, a prejudiced employer who prefers white workers and who has a discrimination coefficient of $3/hour would still hire African-Americans if the market wage rate were $22/hour for white workers and $20/hour for African Americans.

Accepted Answer

A) True 
 B)False

Question 9

In 2014, the average income for households in the United States was about

Accepted Answer

A)  68,426. 
B)  $42,820. 
C)  $56,610. 
D)  $69,821. 
A)  68,426. 
B)  $42,820. 
C)  $56,610. 
D)  $69,821.

Question 10

Which of the following is not a social insurance program?

Accepted Answer

A)  TANF (Temporary Assistance for Needy Families) 
B)  Medicaid 
C)  Supplemental Security Income 
D)  unemployment compensation 
A)  TANF (Temporary Assistance for Needy Families) 
B)  Medicaid 
C)  Supplemental Security Income 
D)  unemployment compensation

Question 11

The TANF program

Accepted Answer

A)  is a form of social insurance. 
B)  has been found to be unconstitutional by the Supreme Court. 
C)  limits total lifetime welfare benefits to 5 years and requires able-bodied adults to work after receiving benefits for 2 years. 
D)  perpetuates the so-called culture of poverty. 
A)  is a form of social insurance. 
B)  has been found to be unconstitutional by the Supreme Court. 
C)  limits total lifetime welfare benefits to 5 years and requires able-bodied adults to work after receiving benefits for 2 years. 
D)  perpetuates the so-called culture of poverty.

Question 12

Census data indicate that, as of 2014, the top fifth of all households receive about times as much income as the bottom fifth.

Accepted Answer

A)  sixteen 
B)  twelve 
C)  eight 
D)  three 
A)  sixteen 
B)  twelve 
C)  eight 
D)  three

Question 13

The closer the Lorenz curve is to the diagonal, the greater is the degree of income inequality.

Accepted Answer

A) True 
 B)False

Question 14

If there is a widespread bias against African-American workers, an increase in the collective discrimination coefficients of employers will

Accepted Answer

A)  reduce the African-American wage rate, increase African-American employment, and lower the actual African-American-white wage ratio. 
B)  reduce the African-American wage rate, decrease African-American employment, and lower the actual African-American-white wage ratio. 
C)  increase the African-American wage rate, increase African-American employment, and increase the actual African-American-white wage ratio. 
D)  increase the African-American wage rate, reduce African-American employment, and increase the actual African-American-white wage ratio. 
A)  reduce the African-American wage rate, increase African-American employment, and lower the actual African-American-white wage ratio. 
B)  reduce the African-American wage rate, decrease African-American employment, and lower the actual African-American-white wage ratio. 
C)  increase the African-American wage rate, increase African-American employment, and increase the actual African-American-white wage ratio. 
D)  increase the African-American wage rate, reduce African-American employment, and increase the actual African-American-white wage ratio.

Question 15

The term "growing income inequality" implies that the

Accepted Answer

A)  poor are getting poorer in both a relative and an absolute sense. 
B)  Lorenz curve is shifting toward the diagonal. 
C)  diagonal is shifting toward the Lorenz curve. 
D)  upper quintiles of income receivers are getting relatively more of the total income than before and the lower quintiles are getting relatively less. 
A)  poor are getting poorer in both a relative and an absolute sense. 
B)  Lorenz curve is shifting toward the diagonal. 
C)  diagonal is shifting toward the Lorenz curve. 
D)  upper quintiles of income receivers are getting relatively more of the total income than before and the lower quintiles are getting relatively less.

Question 16

In the U.S., the percentage of total population living in poverty fell significantly during which of the following periods?

Accepted Answer

A)  1959-1969 
B)  1969-1979 
C)  2001-2004 
D)  2008-2011 
A)  1959-1969 
B)  1969-1979 
C)  2001-2004 
D)  2008-2011

Question 17

Since 1975 the distribution of income has

Accepted Answer

A)  remained virtually constant from year to year. 
B)  become more equal. 
C)  varied considerably from year to year but in general has been stable. 
D)  become less equal. 
A)  remained virtually constant from year to year. 
B)  become more equal. 
C)  varied considerably from year to year but in general has been stable. 
D)  become less equal.

Question 18

Suppose the members of population A, consisting of Al, Bob, Curt, Doris, and Ellie, receive annual incomes of $5,000, $2,500, $1,250, $750, and $500, respectively. What percentage of total income is received by the lowest 60 percent of the income receivers in population A?

Accepted Answer

A)  60 
B)  50 
C)  25 
D)  20 
A)  60 
B)  50 
C)  25 
D)  20

Question 19

Which of the following would be considered part of wealth?

Accepted Answer

A)  wages and salaries 
B)  rental payments 
C)  profits from a corporation 
D)  corporate stock holdings 
A)  wages and salaries 
B)  rental payments 
C)  profits from a corporation 
D)  corporate stock holdings

Question 20

When the distribution of income is adjusted for noncash transfers, the income distribution shows

Accepted Answer

A)  perfect equality. 
B)  greater equality. 
C)  greater inequality. 
D)  little, if any, change. 
A)  perfect equality. 
B)  greater equality. 
C)  greater inequality. 
D)  little, if any, change.

Exam 23: Income Inequality, Poverty, and Discrimination

The poverty rate in the United States was

The former food-stamp program is now the Supplemental Nutrition Assistance Program (SNAP) and eligible households now receive

In 2014, the portion of the U.S. population that lived in poverty was

Wealth in the United States is

Which of the following Gini ratios would indicate the least amount of income inequality?

Which of the following measurement issues makes interpretation of U.S. poverty rates difficult?

In a supply and demand model of the labor market for nonpreferred workers, a reduction in employer prejudice against nonpreferred workers will

In the taste-for-discrimination model, a prejudiced employer who prefers white workers and who has a discrimination coefficient of $3/hour would still hire African-Americans if the market wage rate were $22/hour for white workers and $20/hour for African Americans.

In 2014, the average income for households in the United States was about

Which of the following is not a social insurance program?

The TANF program

Census data indicate that, as of 2014, the top fifth of all households receive about times as much income as the bottom fifth.

The closer the Lorenz curve is to the diagonal, the greater is the degree of income inequality.

If there is a widespread bias against African-American workers, an increase in the collective discrimination coefficients of employers will

The term "growing income inequality" implies that the

In the U.S., the percentage of total population living in poverty fell significantly during which of the following periods?

Since 1975 the distribution of income has

Suppose the members of population A, consisting of Al, Bob, Curt, Doris, and Ellie, receive annual incomes of $5,000, $2,500, $1,250, $750, and $500, respectively. What percentage of total income is received by the lowest 60 percent of the income receivers in population A?

Which of the following would be considered part of wealth?

When the distribution of income is adjusted for noncash transfers, the income distribution shows

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Health Care

Immigration

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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