Question 1

-Refer to the above figure. Which of the above graphs represents an unequal income distribution?

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

Question 2

What is typically the main cost of pursuing a college education?

Accepted Answer

A)  tuition 
B)  room and board 
C)  books and supplies 
D)  income forgone by not working 
A)  tuition 
B)  room and board 
C)  books and supplies 
D)  income forgone by not working

Question 3

If income were distributed according to the egalitarian principle of "to each exactly the same," then one problem would be that

Accepted Answer

A)  there would be little or no incentive for individuals to take risky, hazardous, or unpleasant jobs. 
B)  individuals would have an excess desire to invest in their own human capital. 
C)  too many individuals would want to take risky jobs. 
D)  productivity levels would probably become too high. 
A)  there would be little or no incentive for individuals to take risky, hazardous, or unpleasant jobs. 
B)  individuals would have an excess desire to invest in their own human capital. 
C)  too many individuals would want to take risky jobs. 
D)  productivity levels would probably become too high.

Question 4

The Lorenz curve shows

Accepted Answer

A)  the demand for jobs. 
B)  the supply of jobs. 
C)  the elasticity of jobs. 
D)  the distribution of income. 
A)  the demand for jobs. 
B)  the supply of jobs. 
C)  the elasticity of jobs. 
D)  the distribution of income.

Question 5

Which of the following statements is FALSE?

Accepted Answer

A)  The official absolute poverty level in the United States is far above the average income of many countries in the world. 
B)  In a relative sense, the problem of poverty will always exist. 
C)  An equal distribution of income would eliminate relative poverty. 
D)  An equal distribution of income would eliminate absolute poverty. 
A)  The official absolute poverty level in the United States is far above the average income of many countries in the world. 
B)  In a relative sense, the problem of poverty will always exist. 
C)  An equal distribution of income would eliminate relative poverty. 
D)  An equal distribution of income would eliminate absolute poverty.

Question 6

In insurance markets, moral hazard occurs when the behavior of

Accepted Answer

A)  the insured person changes in a way that raises costs for the insurer, since the insured person no longer bears the full costs of that behavior. 
B)  the insurer changes in a way that raises costs for the insured person, since the insurer no longer bears the full costs of that behavior. 
C)  the insured person changes in a way that eliminates rising health care costs for the insurer, since the insured person no longer bears the full costs of that behavior. 
D)  the insured person has an incentive to under consume medical services, simply because the insured person no longer bears the full cost of medical services. 
A)  the insured person changes in a way that raises costs for the insurer, since the insured person no longer bears the full costs of that behavior. 
B)  the insurer changes in a way that raises costs for the insured person, since the insurer no longer bears the full costs of that behavior. 
C)  the insured person changes in a way that eliminates rising health care costs for the insurer, since the insured person no longer bears the full costs of that behavior. 
D)  the insured person has an incentive to under consume medical services, simply because the insured person no longer bears the full cost of medical services.

Question 7

Income-in-kind is

Accepted Answer

A)  money income. 
B)  received in the form of goods and services. 
C)  income in dollars. 
D)  used to buy goods and services. 
A)  money income. 
B)  received in the form of goods and services. 
C)  income in dollars. 
D)  used to buy goods and services.

Question 8

The wealthiest 10 percent of the population owns about

Accepted Answer

A)  15 percent of all the wealth in the United States. 
B)  50 percent of all the wealth in the United States. 
C)  75 percent of all the wealth in the United States. 
D)  95 percent of all the wealth in the United States. 
A)  15 percent of all the wealth in the United States. 
B)  50 percent of all the wealth in the United States. 
C)  75 percent of all the wealth in the United States. 
D)  95 percent of all the wealth in the United States.

Question 9

Which of the following does NOT affect a worker's marginal productivity?

Accepted Answer

A)  education 
B)  training 
C)  talent 
D)  inheritance of money 
A)  education 
B)  training 
C)  talent 
D)  inheritance of money

Question 10

Which of the following statements about the Earned Income Tax Credit Program (EITC) program is FALSE?

Accepted Answer

A)  On net the EITC discourages work by low- or moderate- income earners more than it rewards work. 
B)  It provides rebates of Social Security taxes to low-income workers. 
C)  Recipients who receive benefit payments under Social Security are also eligible for SSI. 
D)  It is the largest poverty reduction program in the U.S.. 
A)  On net the EITC discourages work by low- or moderate- income earners more than it rewards work. 
B)  It provides rebates of Social Security taxes to low-income workers. 
C)  Recipients who receive benefit payments under Social Security are also eligible for SSI. 
D)  It is the largest poverty reduction program in the U.S..

Question 11

Which of the following statements are correct about the age-earnings cycle?

Accepted Answer

A)  Earnings generally increase up till age 30 and then steadily decrease. 
B)  Earnings increase throughout a prison's lifetime until they reach retirement. 
C)  Earnings increase with age because workers become more productive as they age until around 50 years. Around 50 the effects of aging outweighs the further increases in productivity. 
D)  Since every person is different we can reach no general conclusions about the age-earnings cycle. 
A)  Earnings generally increase up till age 30 and then steadily decrease. 
B)  Earnings increase throughout a prison's lifetime until they reach retirement. 
C)  Earnings increase with age because workers become more productive as they age until around 50 years. Around 50 the effects of aging outweighs the further increases in productivity. 
D)  Since every person is different we can reach no general conclusions about the age-earnings cycle.

Question 12

What impact do private insurance companies and Medicare have on national medical costs?

Accepted Answer

A)  Medical costs go up because insurance leads to an increase in the quantity demanded of medical services. 
B)  Medical costs go up because insurance will lead to the reduction in the supply of medical services due to the amount of paperwork required. 
C)  Medical cost are unaffected by insurance companies. 
D)  Medical costs go down because the insurance company pays the bill. 
A)  Medical costs go up because insurance leads to an increase in the quantity demanded of medical services. 
B)  Medical costs go up because insurance will lead to the reduction in the supply of medical services due to the amount of paperwork required. 
C)  Medical cost are unaffected by insurance companies. 
D)  Medical costs go down because the insurance company pays the bill.

Question 13

Social Security is

Accepted Answer

A)  an insurance program operated by the federal government. 
B)  a retirement program that invests the person's contributions into interest-earning financial assets so the proceeds can fund the person's retirement. 
C)  a social insurance program that guarantees that an elderly person will never fall below the poverty level. 
D)  an intergenerational transfer program that only vaguely relates to past earnings. 
A)  an insurance program operated by the federal government. 
B)  a retirement program that invests the person's contributions into interest-earning financial assets so the proceeds can fund the person's retirement. 
C)  a social insurance program that guarantees that an elderly person will never fall below the poverty level. 
D)  an intergenerational transfer program that only vaguely relates to past earnings.

Question 14

Other things being equal, a national health insurance program would

Accepted Answer

A)  decrease the demand for health care. 
B)  decrease moral hazard. 
C)  decrease total health care expenditures. 
D)  reduce individuals' incentives to make decisions that promote better health. 
A)  decrease the demand for health care. 
B)  decrease moral hazard. 
C)  decrease total health care expenditures. 
D)  reduce individuals' incentives to make decisions that promote better health.

Question 15

On average the productivity of an individual usually peaks when the individual is about

Accepted Answer

A)  25. 
B)  40. 
C)  50. 
D)  65. 
A)  25. 
B)  40. 
C)  50. 
D)  65.

Question 16

Which of the distributive standards does NOT involve a value judgment?

Accepted Answer

A)  productivity standard 
B)  egalitarian standard 
C)  merit standard 
D)  All of the standards involve value judgments. 
A)  productivity standard 
B)  egalitarian standard 
C)  merit standard 
D)  All of the standards involve value judgments.

Question 17

If you believe that a worker should be paid on the basis of what he or she produced, you believe in

Accepted Answer

A)  the egalitarian principle. 
B)  the productivity standard. 
C)  the benefits standard. 
D)  the comparative worth principle. 
A)  the egalitarian principle. 
B)  the productivity standard. 
C)  the benefits standard. 
D)  the comparative worth principle.

Question 18

With a human capital investment (such as the investment in going to college), the most important cost tends to be

Accepted Answer

A)  foregone leisure. 
B)  books and equipment. 
C)  the opportunity cost of not working. 
D)  taxes. 
A)  foregone leisure. 
B)  books and equipment. 
C)  the opportunity cost of not working. 
D)  taxes.

Question 19

Which of the following statements regarding the Lorenz curve is FALSE?

Accepted Answer

A)  A Lorenz curve is a geometric representation of the distribution of income. 
B)  A Lorenz curve that is perfectly straight represents complete income equality. 
C)  The less bowed is a Lorenz curve, the less equally income is distributed. 
D)  The more bowed is a Lorenz curve, the more unequally income is distributed. 
A)  A Lorenz curve is a geometric representation of the distribution of income. 
B)  A Lorenz curve that is perfectly straight represents complete income equality. 
C)  The less bowed is a Lorenz curve, the less equally income is distributed. 
D)  The more bowed is a Lorenz curve, the more unequally income is distributed.

Question 20

In the year 2015, the United States spent about

Accepted Answer

A)  17 percent of GDP on health care. 
B)  100 percent of GDP on health care. 
C)  6 percent of GDP on health care. 
D)  2 percent of GDP on health care. 
A)  17 percent of GDP on health care. 
B)  100 percent of GDP on health care. 
C)  6 percent of GDP on health care. 
D)  2 percent of GDP on health care.

Exam 30: Income, Poverty, and Health Care

-Refer to the above figure. Which of the above graphs represents an unequal income distribution?

What is typically the main cost of pursuing a college education?

If income were distributed according to the egalitarian principle of "to each exactly the same," then one problem would be that

The Lorenz curve shows

Which of the following statements is FALSE?

In insurance markets, moral hazard occurs when the behavior of

Income-in-kind is

The wealthiest 10 percent of the population owns about

Which of the following does NOT affect a worker's marginal productivity?

Which of the following statements about the Earned Income Tax Credit Program (EITC) program is FALSE?

Which of the following statements are correct about the age-earnings cycle?

What impact do private insurance companies and Medicare have on national medical costs?

Social Security is

Other things being equal, a national health insurance program would

On average the productivity of an individual usually peaks when the individual is about

Which of the distributive standards does NOT involve a value judgment?

If you believe that a worker should be paid on the basis of what he or she produced, you believe in

With a human capital investment (such as the investment in going to college), the most important cost tends to be

Which of the following statements regarding the Lorenz curve is FALSE?

In the year 2015, the United States spent about

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

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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

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