Question 1

The age-earning cycle usually begins

Accepted Answer

A)  at relatively high income levels. 
B)  at relatively low income levels. 
C)  once a worker reaches 25 years of age. 
D)  only when a worker is employed full time. 
A)  at relatively high income levels. 
B)  at relatively low income levels. 
C)  once a worker reaches 25 years of age. 
D)  only when a worker is employed full time.

Question 2

Which of the following statements is TRUE?

Accepted Answer

A)  A growing economy should see a decline in relative poverty but not in absolute poverty. 
B)  A growing economy should see a decline in absolute poverty but not in relative poverty. 
C)  A growing economy should see a decline in both absolute and relative poverty. 
D)  A growing economy is usually unrelated to changes in either absolute or relative poverty. 
A)  A growing economy should see a decline in relative poverty but not in absolute poverty. 
B)  A growing economy should see a decline in absolute poverty but not in relative poverty. 
C)  A growing economy should see a decline in both absolute and relative poverty. 
D)  A growing economy is usually unrelated to changes in either absolute or relative poverty.

Question 3

Other things being equal, a national health insurance program would

Accepted Answer

A)  generate higher life expectancies and lower infant mortality rates. 
B)  generate lower life expectancies and higher infant mortality rates. 
C)  increase total health care expenditures. 
D)  increase the quality of life. 
A)  generate higher life expectancies and lower infant mortality rates. 
B)  generate lower life expectancies and higher infant mortality rates. 
C)  increase total health care expenditures. 
D)  increase the quality of life.

Question 4

Determinants of the marginal productivity of labor include all of the following EXCEPT

Accepted Answer

A)  talent. 
B)  education. 
C)  experience. 
D)  location. 
A)  talent. 
B)  education. 
C)  experience. 
D)  location.

Question 5

Health care costs have been rising due to

Accepted Answer

A)  an aging population. 
B)  new technologies. 
C)  third-party financing. 
D)  All of the above are correct. 
A)  an aging population. 
B)  new technologies. 
C)  third-party financing. 
D)  All of the above are correct.

Question 6

The learning curve suggests that an individual will

Accepted Answer

A)  receive the same income throughout a career. 
B)  gain experience and increase productivity over time. 
C)  be subject to frequent spells of unemployment. 
D)  have an income that falls over time. 
A)  receive the same income throughout a career. 
B)  gain experience and increase productivity over time. 
C)  be subject to frequent spells of unemployment. 
D)  have an income that falls over time.

Question 7

Which of the following sources of productivity is the most difficult to acquire?

Accepted Answer

A)  education 
B)  experience 
C)  talent 
D)  training 
A)  education 
B)  experience 
C)  talent 
D)  training

Question 8

Many argue the poor are getting poorer, at least in a relative sense. Evidence that contradicts this is that

Accepted Answer

A)  household income of the lowest twenty percent of households relative to the highest twenty percent of households has fallen over the last thirty years. 
B)  the official poverty level of income has increased over the years. 
C)  household spending of the lowest twenty percent of households relative to the highest twenty percent of households has held constant over the last thirty years. 
D)  the pretax distribution of income is more equal than the after-tax distribution of income. 
A)  household income of the lowest twenty percent of households relative to the highest twenty percent of households has fallen over the last thirty years. 
B)  the official poverty level of income has increased over the years. 
C)  household spending of the lowest twenty percent of households relative to the highest twenty percent of households has held constant over the last thirty years. 
D)  the pretax distribution of income is more equal than the after-tax distribution of income.

Question 9

Which of the following statements is correct?

Accepted Answer

A)  The Social Security program funnels transfers from retired individuals to the youngest children of low-income families. 
B)  Social Security is an entitlement which is available to everyone, including those who have not contributed to the fund during their active work years. 
C)  Social Security benefits are received by people who had contributed to the fund during their active work years. 
D)  As a public transfer payment, Social Security benefit is available only to the poor. 
A)  The Social Security program funnels transfers from retired individuals to the youngest children of low-income families. 
B)  Social Security is an entitlement which is available to everyone, including those who have not contributed to the fund during their active work years. 
C)  Social Security benefits are received by people who had contributed to the fund during their active work years. 
D)  As a public transfer payment, Social Security benefit is available only to the poor.

Question 10

The merit standard refers to

Accepted Answer

A)  "To each according to her need." 
B)  "To each exactly the same." 
C)  "To each according to her productivity." 
D)  "To each according to his ability." 
A)  "To each according to her need." 
B)  "To each exactly the same." 
C)  "To each according to her productivity." 
D)  "To each according to his ability."

Question 11

Which of the following is NOT a correct criticism of the Lorenz curve?

Accepted Answer

A)  It does not include payments in kind. 
B)  It does not deal with differences in family size. 
C)  It ignores the impact of age distribution on income distribution. 
D)  It refers to money income after taxes. 
A)  It does not include payments in kind. 
B)  It does not deal with differences in family size. 
C)  It ignores the impact of age distribution on income distribution. 
D)  It refers to money income after taxes.

Question 12

The egalitarian principle of income refers to

Accepted Answer

A)  each person being paid differently. 
B)  each person receiving the same income. 
C)  each person receiving tax breaks. 
D)  each person working the same number of hours. 
A)  each person being paid differently. 
B)  each person receiving the same income. 
C)  each person receiving tax breaks. 
D)  each person working the same number of hours.

Question 13

An important contributor to rising U.S. health care costs in recent years is

Accepted Answer

A)  less interest on the part of Americans to stay physically fit. 
B)  the increasing proportion of the population that smokes. 
C)  an easing of standards at medical schools that has permitted unqualified people to become physicians. 
D)  the aging of the population. 
A)  less interest on the part of Americans to stay physically fit. 
B)  the increasing proportion of the population that smokes. 
C)  an easing of standards at medical schools that has permitted unqualified people to become physicians. 
D)  the aging of the population.

Question 14

Once the national health care program goes into effect, we can expect

Accepted Answer

A)  total expenditures on health care will decrease. 
B)  more individuals will have more incentives to make decisions that promote better health. 
C)  total expenditures on health care will increase. 
D)  moral hazard will decrease. 
A)  total expenditures on health care will decrease. 
B)  more individuals will have more incentives to make decisions that promote better health. 
C)  total expenditures on health care will increase. 
D)  moral hazard will decrease.

Question 15

Economic discrimination exists when

Accepted Answer

A)  there is an unequal distribution of income in a country. 
B)  both income and wealth are unequally distributed in a country. 
C)  there is unequal access to education. 
D)  workers with the same marginal revenue products are paid different wages. 
A)  there is an unequal distribution of income in a country. 
B)  both income and wealth are unequally distributed in a country. 
C)  there is unequal access to education. 
D)  workers with the same marginal revenue products are paid different wages.

Question 16

Which of the following is NOT considered a determinant of income differences?

Accepted Answer

A)  productivity 
B)  age 
C)  discrimination 
D)  equity or fairness 
A)  productivity 
B)  age 
C)  discrimination 
D)  equity or fairness

Question 17

The graph which represents the distribution of income in an economy is called the

Accepted Answer

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

Question 18

Age is a determinant of income because

Accepted Answer

A)  with age typically come experience, education, and training that can increase income. 
B)  age contributes to costs as medical expenses increase. 
C)  older workers have accumulated more wealth. 
D)  older workers have accumulated less wealth. 
A)  with age typically come experience, education, and training that can increase income. 
B)  age contributes to costs as medical expenses increase. 
C)  older workers have accumulated more wealth. 
D)  older workers have accumulated less wealth.

Question 19

Determinants of income differences include all of the following EXCEPT

Accepted Answer

A)  age. 
B)  marginal productivity. 
C)  moral hazard. 
D)  discrimination. 
A)  age. 
B)  marginal productivity. 
C)  moral hazard. 
D)  discrimination.

Question 20

Which of the following determinants of marginal productivity cannot be acquired by someone who wants to increase future productivity?

Accepted Answer

A)  education 
B)  training 
C)  talent 
D)  experience 
A)  education 
B)  training 
C)  talent 
D)  experience

Exam 30: Income, Poverty, and Health Care

The age-earning cycle usually begins

Which of the following statements is TRUE?

Other things being equal, a national health insurance program would

Determinants of the marginal productivity of labor include all of the following EXCEPT

Health care costs have been rising due to

The learning curve suggests that an individual will

Which of the following sources of productivity is the most difficult to acquire?

Many argue the poor are getting poorer, at least in a relative sense. Evidence that contradicts this is that

Which of the following statements is correct?

The merit standard refers to

Which of the following is NOT a correct criticism of the Lorenz curve?

The egalitarian principle of income refers to

An important contributor to rising U.S. health care costs in recent years is

Once the national health care program goes into effect, we can expect

Economic discrimination exists when

Which of the following is NOT considered a determinant of income differences?

The graph which represents the distribution of income in an economy is called the

Age is a determinant of income because

Determinants of income differences include all of the following EXCEPT

Which of the following determinants of marginal productivity cannot be acquired by someone who wants to increase future productivity?

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

Funding the Public Sector

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

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

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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