Question 1

If a goal of a nation's residents is to increase marginal productivity, they should increase

Accepted Answer

A)  expenditures on education. 
B)  the inheritance tax. 
C)  exports. 
D)  the marginal propensity to consume. 
A)  expenditures on education. 
B)  the inheritance tax. 
C)  exports. 
D)  the marginal propensity to consume. A

Question 2

-Refer to the above figure. Which of the above panels represents complete income equality?

Accepted Answer

A)  Panel A 
B)  Panel B 
C)  Panel C 
D)  Panel D 
A)  Panel A 
B)  Panel B 
C)  Panel C 
D)  Panel D B

Question 3

The productivity standard says

Accepted Answer

A)  that everyone should have exactly the same income. 
B)  that the age-earnings cycle should determine income. 
C)  that people should be compensated on the basis of what they produce. 
D)  that people should be compensated on the basis of their need. 
A)  that everyone should have exactly the same income. 
B)  that the age-earnings cycle should determine income. 
C)  that people should be compensated on the basis of what they produce. 
D)  that people should be compensated on the basis of their need. C

Question 4

Since 1929, the distribution of money income in the United States has

Accepted Answer

A)  become slightly more unequal. 
B)  not dramatically changed. 
C)  become more equal. 
D)  shifted toward the poorer 20 percent away from the richer 20 percent. 
A)  become slightly more unequal. 
B)  not dramatically changed. 
C)  become more equal. 
D)  shifted toward the poorer 20 percent away from the richer 20 percent.

Question 5

Which of the following income maintenance programs is designed to establish nationwide minimum incomes for the aged, the blind, and the disabled?

Accepted Answer

A)  the Old-Age Survivors' and Disability Insurance (OASDI) program 
B)  the Supplemental Security Income (SSI) program 
C)  the Temporary Assistance to Needy Families (TANF) program 
D)  the food stamps program 
A)  the Old-Age Survivors' and Disability Insurance (OASDI) program 
B)  the Supplemental Security Income (SSI) program 
C)  the Temporary Assistance to Needy Families (TANF) program 
D)  the food stamps program

Question 6

The most common type of investment in human capital is

Accepted Answer

A)  having more children per family. 
B)  the migration of labor in search of better jobs. 
C)  expanded years of schooling. 
D)  improved health care and maintenance. 
A)  having more children per family. 
B)  the migration of labor in search of better jobs. 
C)  expanded years of schooling. 
D)  improved health care and maintenance.

Question 7

The contributive standard (merit standard) for distributing income implies that

Accepted Answer

A)  income should be distributed equally. 
B)  income should be distributed according to need. 
C)  income should be distributed according to the marginal productivity of workers. 
D)  a transfer should be contributed to an individual above his or her contribution to net output. 
A)  income should be distributed equally. 
B)  income should be distributed according to need. 
C)  income should be distributed according to the marginal productivity of workers. 
D)  a transfer should be contributed to an individual above his or her contribution to net output.

Question 8

Which of the following is a reason for economic discrimination to occur?

Accepted Answer

A)  differences in access to education 
B)  differences in gender 
C)  differences in the quality of education 
D)  barriers to entry in higher-paying occupations 
A)  differences in access to education 
B)  differences in gender 
C)  differences in the quality of education 
D)  barriers to entry in higher-paying occupations

Question 9

Explain the two theories of desired income distribution: the egalitarian principle and the productivity standard.

Accepted Answer

The egalitarian principle suggests that

Question 10

According to the text, the highest 20 percent of U.S. income households earn about what percentage of total income today?

Accepted Answer

A)  10 percent 
B)  20 percent 
C)  50 percent 
D)  95 percent 
A)  10 percent 
B)  20 percent 
C)  50 percent 
D)  95 percent

Question 11

The use of hospitals today is dominated by

Accepted Answer

A)  the elderly. 
B)  immigrants. 
C)  obstetrical care. 
D)  the wealthy. 
A)  the elderly. 
B)  immigrants. 
C)  obstetrical care. 
D)  the wealthy.

Question 12

The lowest percentage of the U.S. population in poverty is found when using which measurement of household resources?

Accepted Answer

A)  private income only 
B)  private income plus cash benefits 
C)  private income with cash and in-kind benefits 
D)  private income with Social Security payments subtracted 
A)  private income only 
B)  private income plus cash benefits 
C)  private income with cash and in-kind benefits 
D)  private income with Social Security payments subtracted

Question 13

The 45° line on a Lorenz curve represents

Accepted Answer

A)  complete income equality. 
B)  complete income inequality. 
C)  complete wealth equality. 
D)  complete wealth inequality. 
A)  complete income equality. 
B)  complete income inequality. 
C)  complete wealth equality. 
D)  complete wealth inequality.

Question 14

A Lorenz curve measures the ________ on the vertical axis.

Accepted Answer

A)  cumulative percentage of money income 
B)  cumulative percentage of family wealth 
C)  cumulative percentage of families 
D)  demand of families on welfare 
A)  cumulative percentage of money income 
B)  cumulative percentage of family wealth 
C)  cumulative percentage of families 
D)  demand of families on welfare

Question 15

All of the following contribute to income inequality EXCEPT

Accepted Answer

A)  differences in education and training. 
B)  differences in job tastes. 
C)  differences in talent. 
D)  government transfer programs. 
A)  differences in education and training. 
B)  differences in job tastes. 
C)  differences in talent. 
D)  government transfer programs.

Question 16

A problem with third-party financing of so much of health care is that

Accepted Answer

A)  it reduces the quality of health care received by most people. 
B)  it discourages physicians from getting second opinions and running enough tests to be sure the right procedure is followed. 
C)  it causes the demand for medical services to increase, which causes health care costs to increase. 
D)  it discourages people from relying on the judgments of physicians in making decisions about health care. 
A)  it reduces the quality of health care received by most people. 
B)  it discourages physicians from getting second opinions and running enough tests to be sure the right procedure is followed. 
C)  it causes the demand for medical services to increase, which causes health care costs to increase. 
D)  it discourages people from relying on the judgments of physicians in making decisions about health care.

Question 17

Which of the following statements about the Supplemental Security Income (SSI) program is FALSE?

Accepted Answer

A)  It is designed to establish nationwide minimum incomes for the aged, the blind, and the disabled. 
B)  Benefits are based on need. 
C)  Recipients who receive benefit payments under Social Security are also eligible for SSI. 
D)  It covers children and individuals with mental disabilities, including drug addicts and alcoholics. 
A)  It is designed to establish nationwide minimum incomes for the aged, the blind, and the disabled. 
B)  Benefits are based on need. 
C)  Recipients who receive benefit payments under Social Security are also eligible for SSI. 
D)  It covers children and individuals with mental disabilities, including drug addicts and alcoholics.

Question 18

-The most unequal distribution of income in the above figure exists in

Accepted Answer

A)  country 4. 
B)  country 1. 
C)  country 5. 
D)  country 3. 
A)  country 4. 
B)  country 1. 
C)  country 5. 
D)  country 3.

Question 19

According to the text, today's Lorenz curve is

Accepted Answer

A)  a straight line. 
B)  a vertical line. 
C)  more bowed than in 1929. 
D)  less bowed than in 1929. 
A)  a straight line. 
B)  a vertical line. 
C)  more bowed than in 1929. 
D)  less bowed than in 1929.

Question 20

The distribution of income in one nation can be illustrated by the

Accepted Answer

A)  Laffer curve. 
B)  aggregate demand curve. 
C)  Lorenz curve. 
D)  Phillips curve. 
A)  Laffer curve. 
B)  aggregate demand curve. 
C)  Lorenz curve. 
D)  Phillips curve.

Exam 30: Income, Poverty, and Health Care

If a goal of a nation's residents is to increase marginal productivity, they should increase

-Refer to the above figure. Which of the above panels represents complete income equality?

The productivity standard says

Since 1929, the distribution of money income in the United States has

Which of the following income maintenance programs is designed to establish nationwide minimum incomes for the aged, the blind, and the disabled?

The most common type of investment in human capital is

The contributive standard (merit standard) for distributing income implies that

Which of the following is a reason for economic discrimination to occur?

Explain the two theories of desired income distribution: the egalitarian principle and the productivity standard.

According to the text, the highest 20 percent of U.S. income households earn about what percentage of total income today?

The use of hospitals today is dominated by

The lowest percentage of the U.S. population in poverty is found when using which measurement of household resources?

The 45° line on a Lorenz curve represents

A Lorenz curve measures the ________ on the vertical axis.

All of the following contribute to income inequality EXCEPT

A problem with third-party financing of so much of health care is that

Which of the following statements about the Supplemental Security Income (SSI) program is FALSE?

-The most unequal distribution of income in the above figure exists in

According to the text, today's Lorenz curve is

The distribution of income in one nation can be illustrated by the

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

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The Macroeconomy: Unemployment, Inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

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Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

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Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

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Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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