Question 1

Rising healthcare costs are attributable to

Accepted Answer

A)  people living longer and desiring more care. 
B)  reliance on expensive technology to support and prolong life. 
C)  third-party financing of healthcare costs. 
D)  all of the above. 
A)  people living longer and desiring more care. 
B)  reliance on expensive technology to support and prolong life. 
C)  third-party financing of healthcare costs. 
D)  all of the above.

Question 2

Since the 1930s, third-party payments for health care have

Accepted Answer

A)  risen from about 5 to 90 percent of total payments. 
B)  declined from about 95 to 10 percent of total payments. 
C)  declined from about 70 to 30 percent of total payments. 
D)  risen from about 30 to 50 percent of total payments. 
A)  risen from about 5 to 90 percent of total payments. 
B)  declined from about 95 to 10 percent of total payments. 
C)  declined from about 70 to 30 percent of total payments. 
D)  risen from about 30 to 50 percent of total payments.

Question 3

What are the major criticisms of the Lorenz curve?

Accepted Answer

The Lorenz curve typically is presented

Question 4

Which of the following does NOT contribute to the marginal productivity of workers?

Accepted Answer

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

Question 5

If a nation's Lorenz curve lies on the 45 degree line of income equality, then

Accepted Answer

A)  more of the nation's income is received by the lowest 25 percent of families than by the highest 25 percent. 
B)  every household's income level is different. 
C)  more of the nation's income is received by the highest 25 percent of families than by the lowest percent. 
D)  the income received by each 25 percent of families is 25 percent of the total income. 
A)  more of the nation's income is received by the lowest 25 percent of families than by the highest 25 percent. 
B)  every household's income level is different. 
C)  more of the nation's income is received by the highest 25 percent of families than by the lowest percent. 
D)  the income received by each 25 percent of families is 25 percent of the total income.

Question 6

The age-earnings profile for most people indicates

Accepted Answer

A)  earnings rise continually until a person retires. 
B)  earnings initially decline and then rise continually until retirement. 
C)  that when you adjust for inflation, earnings are constant throughout the entire workplace experience. 
D)  earnings rise until the age of about 50 and then begin to fall until retirement. 
A)  earnings rise continually until a person retires. 
B)  earnings initially decline and then rise continually until retirement. 
C)  that when you adjust for inflation, earnings are constant throughout the entire workplace experience. 
D)  earnings rise until the age of about 50 and then begin to fall until retirement.

Question 7

Which factor listed below does NOT help account for the age-earning cycle?

Accepted Answer

A)  productivity 
B)  number of hours worked each week 
C)  effects of aging 
D)  racial discrimination 
A)  productivity 
B)  number of hours worked each week 
C)  effects of aging 
D)  racial discrimination

Question 8

A straight-line Lorenz curve shows

Accepted Answer

A)  an equal distribution of money income. 
B)  a greater than proportionate share of income going to middle-income households. 
C)  a high incidence of absolute poverty. 
D)  a highly unequal distribution of income. 
A)  an equal distribution of money income. 
B)  a greater than proportionate share of income going to middle-income households. 
C)  a high incidence of absolute poverty. 
D)  a highly unequal distribution of income.

Question 9

The percentage of national income spent on health care

Accepted Answer

A)  has steadily decreased since 1965. 
B)  has steadily increased since 1965. 
C)  increased until the end of the 1970s and then decreased in the 1980s and 2000s. 
D)  decreased until the end of the 1970s and then increased in the 1980s and 2000s. 
A)  has steadily decreased since 1965. 
B)  has steadily increased since 1965. 
C)  increased until the end of the 1970s and then decreased in the 1980s and 2000s. 
D)  decreased until the end of the 1970s and then increased in the 1980s and 2000s.

Question 10

-Refer to the above figure. For which Lorenz curve does the richest 40 percent make 50 percent of the nation's money income?

Accepted Answer

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

Question 11

One productivity standard for income distribution stated in the text is

Accepted Answer

A)  income distribution should be based on contribution to society's total output. 
B)  tax payments are higher for higher income people. 
C)  poor people pay too much in taxes. 
D)  the poor should contribute more to society. 
A)  income distribution should be based on contribution to society's total output. 
B)  tax payments are higher for higher income people. 
C)  poor people pay too much in taxes. 
D)  the poor should contribute more to society.

Question 12

In a growing economy, it is possible to eliminate

Accepted Answer

A)  absolute poverty. 
B)  relative poverty. 
C)  both absolute and relative poverty. 
D)  either absolute nor relative poverty. 
A)  absolute poverty. 
B)  relative poverty. 
C)  both absolute and relative poverty. 
D)  either absolute nor relative poverty.

Question 13

One problem with third-party financing of health care is that

Accepted Answer

A)  people have more incentive to utilize health care. 
B)  demand falls so that suppliers cannot take advantage of economies of scale. 
C)  it reduces the quality of health care people receive. 
D)  it discourages people from relying on their physicians' advice in making health care decisions. 
A)  people have more incentive to utilize health care. 
B)  demand falls so that suppliers cannot take advantage of economies of scale. 
C)  it reduces the quality of health care people receive. 
D)  it discourages people from relying on their physicians' advice in making health care decisions.

Question 14

The Lorenz curve is a geometric representation of

Accepted Answer

A)  the profile of earnings for a "typical" family over time. 
B)  the standard of living experienced by the poor in a country. 
C)  the difference between pre-tax and post-tax income. 
D)  the distribution of income. 
A)  the profile of earnings for a "typical" family over time. 
B)  the standard of living experienced by the poor in a country. 
C)  the difference between pre-tax and post-tax income. 
D)  the distribution of income.

Question 15

Some economists argue that the official poverty figures overstate poverty in this country. Why?

Accepted Answer

Official poverty figures do not include

Question 16

The age-earnings profile predicts that earnings will peak at

Accepted Answer

A)  the 35-40 age level. 
B)  the 45-50 age level. 
C)  the 60-65 age level. 
D)  retirement. 
A)  the 35-40 age level. 
B)  the 45-50 age level. 
C)  the 60-65 age level. 
D)  retirement.

Question 17

The egalitarian principle 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 18

Which of the following statements is FALSE regarding the definition of poverty?

Accepted Answer

A)  A threshold income level is used to define poverty. 
B)  Adjustments to the poverty level are made on the basis of changes in the Consumer Price Index. 
C)  Real incomes in the United States have been growing at a compounded annual rate of almost 2 percent per capita. 
D)  Poverty cannot be defined in relative terms. 
A)  A threshold income level is used to define poverty. 
B)  Adjustments to the poverty level are made on the basis of changes in the Consumer Price Index. 
C)  Real incomes in the United States have been growing at a compounded annual rate of almost 2 percent per capita. 
D)  Poverty cannot be defined in relative terms.

Question 19

A major problem with using the egalitarian principle to distribute income is that

Accepted Answer

A)  it would eliminate the incentives that rewards provide in an economic system. 
B)  it is difficult to know when an equal distribution of income has been achieved. 
C)  it would not be fair to the wealthy. 
D)  there exist no mechanisms to carry out such a scheme. 
A)  it would eliminate the incentives that rewards provide in an economic system. 
B)  it is difficult to know when an equal distribution of income has been achieved. 
C)  it would not be fair to the wealthy. 
D)  there exist no mechanisms to carry out such a scheme.

Question 20

A Lorenz curve that is perfectly straight indicates

Accepted Answer

A)  that society is very rich. 
B)  that a small portion of the population accounts for most of the income. 
C)  that a large portion of the population accounts for most of the income. 
D)  complete income equality. 
A)  that society is very rich. 
B)  that a small portion of the population accounts for most of the income. 
C)  that a large portion of the population accounts for most of the income. 
D)  complete income equality.

Exam 30: Income, Poverty, and Health Care

Rising healthcare costs are attributable to

Since the 1930s, third-party payments for health care have

What are the major criticisms of the Lorenz curve?

Which of the following does NOT contribute to the marginal productivity of workers?

If a nation's Lorenz curve lies on the 45 degree line of income equality, then

The age-earnings profile for most people indicates

Which factor listed below does NOT help account for the age-earning cycle?

A straight-line Lorenz curve shows

The percentage of national income spent on health care

-Refer to the above figure. For which Lorenz curve does the richest 40 percent make 50 percent of the nation's money income?

One productivity standard for income distribution stated in the text is

In a growing economy, it is possible to eliminate

One problem with third-party financing of health care is that

The Lorenz curve is a geometric representation of

Some economists argue that the official poverty figures overstate poverty in this country. Why?

The age-earnings profile predicts that earnings will peak at

The egalitarian principle refers to

Which of the following statements is FALSE regarding the definition of poverty?

A major problem with using the egalitarian principle to distribute income is that

A Lorenz curve that is perfectly straight indicates

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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