Question 1

The more bowed (skewed) the Lorenz curve

Accepted Answer

A)  the more equal the distribution of income. 
B)  the greater the number of households in the society. 
C)  the more unequal the distribution of money income. 
D)  the greater the total income of the society. 
A)  the more equal the distribution of income. 
B)  the greater the number of households in the society. 
C)  the more unequal the distribution of money income. 
D)  the greater the total income of the society.

Question 2

Which of the following is NOT considered to be a factor in the determination of a person's marginal productivity?

Accepted Answer

A)  innate abilities such as high intelligence 
B)  investment in human capital such as education 
C)  on-the-job training 
D)  the elasticity of supply of labor 
A)  innate abilities such as high intelligence 
B)  investment in human capital such as education 
C)  on-the-job training 
D)  the elasticity of supply of labor

Question 3

Originally, the threshold income level used to determine official poverty statistics was based on

Accepted Answer

A)  a per capita income of $3000 in 1955 prices. 
B)  the lowest income of the second quartile of families in the country. 
C)  an income three times greater than necessary to purchase a nutritionally adequate diet. 
D)  figures developed by a committee in the American Economic Association. 
A)  a per capita income of $3000 in 1955 prices. 
B)  the lowest income of the second quartile of families in the country. 
C)  an income three times greater than necessary to purchase a nutritionally adequate diet. 
D)  figures developed by a committee in the American Economic Association.

Question 4

Investment in human capital

Accepted Answer

A)  is quite different from and has a much lower return than investment in physical capital. 
B)  is just like investment in physical capital and has a return similar to that earned from other investments. 
C)  is just like investment in physical capital but has a much greater return than do other investments. 
D)  is not comparable to other investments in any way since human capital is embodied in the person. 
A)  is quite different from and has a much lower return than investment in physical capital. 
B)  is just like investment in physical capital and has a return similar to that earned from other investments. 
C)  is just like investment in physical capital but has a much greater return than do other investments. 
D)  is not comparable to other investments in any way since human capital is embodied in the person.

Question 5

Which of the following is an individual mandate in the federal government's new national health care program?

Accepted Answer

A)  Under the new program, the federal government will coordinate the establishment of health insurance exchanges. 
B)  Firms with at least 50 employees must either provide health insurance or pay fines when uninsured employees receive tax subsidies to purchase insurance. 
C)  A tax rate of 3.8 percent will be assessed on nearly all earnings above $200,000 per year for individuals and above $250,000 per year for married couples. 
D)  Nearly all U.S. residents must either purchase health insurance coverage or pay a fine of up to $750 per year for an individual (up to $2,250 per year for a family). 
A)  Under the new program, the federal government will coordinate the establishment of health insurance exchanges. 
B)  Firms with at least 50 employees must either provide health insurance or pay fines when uninsured employees receive tax subsidies to purchase insurance. 
C)  A tax rate of 3.8 percent will be assessed on nearly all earnings above $200,000 per year for individuals and above $250,000 per year for married couples. 
D)  Nearly all U.S. residents must either purchase health insurance coverage or pay a fine of up to $750 per year for an individual (up to $2,250 per year for a family).

Question 6

The belief that everyone should have exactly the same amount of income is

Accepted Answer

A)  merit standard. 
B)  comparable-worth doctrine. 
C)  egalitarian principle. 
D)  Lorenz principle. 
A)  merit standard. 
B)  comparable-worth doctrine. 
C)  egalitarian principle. 
D)  Lorenz principle.

Question 7

-Use the above figure. Refer to the above diagram where curves (a) through (d) are for four different countries. Income is third most unequally distributed in

Accepted Answer

A)  Country A. 
B)  Country B. 
C)  Country C. 
D)  Country D. 
A)  Country A. 
B)  Country B. 
C)  Country C. 
D)  Country D.

Question 8

Compare and contrast the two normative standards to income distribution discussed in the text: The productivity standard and the egalitarian principle.

Accepted Answer

The productivity standard is also called

Question 9

The government program that provides aid to families in need is

Accepted Answer

A)  TANF. 
B)  Social Security program. 
C)  Supplemental Security Income program. 
D)  Earned Income Tax Credit. 
A)  TANF. 
B)  Social Security program. 
C)  Supplemental Security Income program. 
D)  Earned Income Tax Credit.

Question 10

When poverty is defined by an relative real income level, what will happen to the poverty rate if the distribution of income is NOT perfectly equal?

Accepted Answer

A)  The poverty rate will increase forever. 
B)  The poverty rate will eventually be zero. 
C)  The poverty rate will always remain constant. 
D)  The poverty rate will change, but always exist. 
A)  The poverty rate will increase forever. 
B)  The poverty rate will eventually be zero. 
C)  The poverty rate will always remain constant. 
D)  The poverty rate will change, but always exist.

Question 11

The Social Security system is financed by

Accepted Answer

A)  a tax on individual retirement accounts. 
B)  a payroll tax paid only by employers. 
C)  a payroll tax paid by both employers and employees. 
D)  a tax on luxury goods. 
A)  a tax on individual retirement accounts. 
B)  a payroll tax paid only by employers. 
C)  a payroll tax paid by both employers and employees. 
D)  a tax on luxury goods.

Question 12

If an individual receives in-kind transfers from the government in the form of food stamps, public housing, and so on, his money income is

Accepted Answer

A)  less than his total income. 
B)  greater than his total income. 
C)  the same as his total income. 
D)  equal to his in-kind income plus his wages. 
A)  less than his total income. 
B)  greater than his total income. 
C)  the same as his total income. 
D)  equal to his in-kind income plus his wages.

Question 13

The effects of the national health care program on labor markets will

Accepted Answer

A)  lower the effective wage rate that they must pay for each unit of labor. 
B)  decrease the marginal revenue product of labor. 
C)  increase the marginal revenue product of labor. 
D)  move upward along their downward-sloping marginal-product-of-labor curve. 
A)  lower the effective wage rate that they must pay for each unit of labor. 
B)  decrease the marginal revenue product of labor. 
C)  increase the marginal revenue product of labor. 
D)  move upward along their downward-sloping marginal-product-of-labor curve.

Question 14

"It is difficult to compare over time health care expenditures, costs, and output." Do you agree or disagree? Why?

Accepted Answer

Agree. First, expenditures and costs are

Question 15

Draw and explain a Lorenz curve.

Accepted Answer

@#IMG-DLM& In the above figure, the curve displayi

Question 16

The opportunity cost of going to college for a student receiving a scholarship

Accepted Answer

A)  is the income that she would have earned if she did not go to college. 
B)  is the risk of dropping out. 
C)  is the food and living expenses that she has to purchase while in college. 
D)  is zero because she does not have to pay tuition. 
A)  is the income that she would have earned if she did not go to college. 
B)  is the risk of dropping out. 
C)  is the food and living expenses that she has to purchase while in college. 
D)  is zero because she does not have to pay tuition.

Question 17

With respect to wealth in the United States, we presently find that the bottom 90 percent of Americans own approximately how much of the nation's wealth?

Accepted Answer

A)  10 percent 
B)  25 percent 
C)  64 percent 
D)  84 percent 
A)  10 percent 
B)  25 percent 
C)  64 percent 
D)  84 percent

Question 18

Merit is judged by one's ability to produce

Accepted Answer

A)  what is considered useful by society. 
B)  what is considered valuable by society. 
C)  what is considered beneficial to society. 
D)  all of the above. 
A)  what is considered useful by society. 
B)  what is considered valuable by society. 
C)  what is considered beneficial to society. 
D)  all of the above.

Question 19

Which of the following is NOT a reason for rising health care expenditures in the United States over the last 40 years?

Accepted Answer

A)  aging of the population 
B)  technological change 
C)  third-party financing of health care expenditures 
D)  discovery of new diseases 
A)  aging of the population 
B)  technological change 
C)  third-party financing of health care expenditures 
D)  discovery of new diseases

Question 20

The return on human capital

Accepted Answer

A)  tends to be much greater than the return on physical capital. 
B)  tends to be much lower than the return on physical capital. 
C)  is similar to the return on physical capital. 
D)  cannot be related to the return on physical capital since human capital and physical capital are so different. 
A)  tends to be much greater than the return on physical capital. 
B)  tends to be much lower than the return on physical capital. 
C)  is similar to the return on physical capital. 
D)  cannot be related to the return on physical capital since human capital and physical capital are so different.

Exam 30: Income, Poverty, and Health Care

The more bowed (skewed) the Lorenz curve

Which of the following is NOT considered to be a factor in the determination of a person's marginal productivity?

Originally, the threshold income level used to determine official poverty statistics was based on

Investment in human capital

Which of the following is an individual mandate in the federal government's new national health care program?

The belief that everyone should have exactly the same amount of income is

-Use the above figure. Refer to the above diagram where curves (a) through (d) are for four different countries. Income is third most unequally distributed in

Compare and contrast the two normative standards to income distribution discussed in the text: The productivity standard and the egalitarian principle.

The government program that provides aid to families in need is

When poverty is defined by an relative real income level, what will happen to the poverty rate if the distribution of income is NOT perfectly equal?

The Social Security system is financed by

If an individual receives in-kind transfers from the government in the form of food stamps, public housing, and so on, his money income is

The effects of the national health care program on labor markets will

"It is difficult to compare over time health care expenditures, costs, and output." Do you agree or disagree? Why?

Draw and explain a Lorenz curve.

The opportunity cost of going to college for a student receiving a scholarship

With respect to wealth in the United States, we presently find that the bottom 90 percent of Americans own approximately how much of the nation's wealth?

Merit is judged by one's ability to produce

Which of the following is NOT a reason for rising health care expenditures in the United States over the last 40 years?

The return on human capital

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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