Exam 23: Income Inequality, Poverty, and Discrimination

A reduction in the collective discrimination coefficients of employers will increase the wage rate of those discriminated against but reduce their employment.

Suppose an employer is biased against African Americans. If his discrimination coefficient is $2, the employer will

Which of the following is not a basic difference between Medicare and Medicaid?

The percentage of total before-tax household income received by the lowest 20 percent of households in 2014 was about percent, while the top 20 percent received about percent.

In the pizza analogy for income distribution, the pizza would shrink because

Insurance companies require male drivers under age 25 to pay higher insurance rates than female drivers under age 25. Craig Raymond, however, is a safer driver than the average female driver under age 25. Craig's higher insurance rate reflects

Some economists prefer to look at the distribution of consumption rather than that of income. A Review of Economic Studies article in 2006 reported that consumption inequality in the U.S. is

The Lorenz curve is a graph that relates income to household spending.

Suppose that white workers are getting paid $21/hour, while similarly productive African-American workers are getting paid $18/hour. A prejudiced white employer with a discrimination coefficient of $24/hour will

The equality-efficiency trade-off suggests that

Which of the following Gini ratios indicates the lowest degree of income inequality?

Suppose Copernicus Corporation hires Damon Danielson rather than Elmer Ellison, simply because Damon is a graduate of an Ivy League school, while Elmer is a graduate of a small public university. Elmer is actually more qualified than Damon. This is an example of

Which of the following groups would we expect to have the highest poverty rate?

Discrimination

Suppose that a prejudiced African-American employer has a discrimination coefficient of $5/hour. Suppose also that the market wage rate is $20/hour for African- American workers, and $18/hour for Hispanic workers. In this case, the employer will

The wages and salaries that people earn differ partly because of differences in

Suppose Rita obtains 10 units of utility from the last dollar of income received by her, and Joseph obtains 6 units of utility from the last dollar of his income. Assume both Joseph and Rita have the same capacity to derive utility from income. Those who favor an equal distribution of income would

(Consider This) The main focus of the vignette "Slicing the Pizza" is the

For which of the following income-maintenance programs is aggregate spending the greatest?

Income mobility