Question 1

All of the following are income in kind EXCEPT

Accepted Answer

A)  income received from family members. 
B)  services produced in the home. 
C)  government provided food stamps. 
D)  government provided medical aid. 
A)  income received from family members. 
B)  services produced in the home. 
C)  government provided food stamps. 
D)  government provided medical aid.

Question 2

In general, as individuals undertake additional years of schooling,

Accepted Answer

A)  their stock of human capital increases. 
B)  the marginal productivity of individuals as workers declines. 
C)  the marginal benefit to society of the extra years of education increases. 
D)  the marginal productivity of individuals as workers becomes negative. 
A)  their stock of human capital increases. 
B)  the marginal productivity of individuals as workers declines. 
C)  the marginal benefit to society of the extra years of education increases. 
D)  the marginal productivity of individuals as workers becomes negative.

Question 3

Which of the following statements about the Social Security (OASDI) program is FALSE?

Accepted Answer

A)  Benefits are paid to individuals who would be financially secure in their absence. 
B)  Benefits are based on need. 
C)  Benefits are an intergenerational transfer program from those who work to those who don't work. 
D)  When an insured worker dies, benefits continue for widows or other dependents. 
A)  Benefits are paid to individuals who would be financially secure in their absence. 
B)  Benefits are based on need. 
C)  Benefits are an intergenerational transfer program from those who work to those who don't work. 
D)  When an insured worker dies, benefits continue for widows or other dependents.

Question 4

Why have health care costs risen so much in recent years?

Accepted Answer

The elderly use a disproportionate amoun

Question 5

The age-earnings cycle is an earnings profile of an individual throughout the person's lifetime. The profile shows that

Accepted Answer

A)  earnings usually peak at age 25 and then decline. 
B)  earnings gradually rise until they peak around age 50. 
C)  earnings and age have no particular correlation. 
D)  younger workers have the most productivity. 
A)  earnings usually peak at age 25 and then decline. 
B)  earnings gradually rise until they peak around age 50. 
C)  earnings and age have no particular correlation. 
D)  younger workers have the most productivity.

Question 6

The following are all determinants of income differences examined in the text EXCEPT

Accepted Answer

A)  age. 
B)  marginal productivity. 
C)  inheritance. 
D)  height. 
A)  age. 
B)  marginal productivity. 
C)  inheritance. 
D)  height.

Question 7

Compared to the distribution of money income, the distribution of wealth is

Accepted Answer

A)  about the same. 
B)  much more equal. 
C)  much less equal. 
D)  a little more equal. 
A)  about the same. 
B)  much more equal. 
C)  much less equal. 
D)  a little more equal.

Question 8

Which of the following would be considered income in kind?

Accepted Answer

A)  tax refunds 
B)  food stamps 
C)  yard sales 
D)  reduction in the tax rates 
A)  tax refunds 
B)  food stamps 
C)  yard sales 
D)  reduction in the tax rates

Question 9

Which of the following are determinants of differences in income?

Accepted Answer

A)  age 
B)  marginal productivity 
C)  discrimination 
D)  all of the above 
A)  age 
B)  marginal productivity 
C)  discrimination 
D)  all of the above

Question 10

All of the following are criticisms of the Lorenz curve analysis EXCEPT

Accepted Answer

A)  income-in-kind is not figured in. 
B)  the inequality gap is not an issue that economists study. 
C)  different sizes of households are ignored. 
D)  it does not take into consideration lifetime earnings. 
A)  income-in-kind is not figured in. 
B)  the inequality gap is not an issue that economists study. 
C)  different sizes of households are ignored. 
D)  it does not take into consideration lifetime earnings.

Question 11

Which of the following is NOT correct regarding the theories of income distribution?

Accepted Answer

A)  Dealing with how income ought to be distributed is a normative issue. 
B)  The productivity standard for the distribution of income is stated "to each according to what they produce." 
C)  The egalitarian principle of income distribution is "to each exactly the same." 
D)  Dealing with how income should be distributed is a positive economic issue. 
A)  Dealing with how income ought to be distributed is a normative issue. 
B)  The productivity standard for the distribution of income is stated "to each according to what they produce." 
C)  The egalitarian principle of income distribution is "to each exactly the same." 
D)  Dealing with how income should be distributed is a positive economic issue.

Question 12

The idea that some people engage in risky behavior due to the fact that they have good health care is known as

Accepted Answer

A)  moral hazard. 
B)  risk aversion. 
C)  zero-sum game. 
D)  risk-taking behavior. 
A)  moral hazard. 
B)  risk aversion. 
C)  zero-sum game. 
D)  risk-taking behavior.

Question 13

The government finances Social Security through

Accepted Answer

A)  excise taxes. 
B)  payroll taxes. 
C)  the sale of goods and services. 
D)  state taxes. 
A)  excise taxes. 
B)  payroll taxes. 
C)  the sale of goods and services. 
D)  state taxes.

Question 14

Since the War on Poverty was started in 1965, the United States has spent more than $12 trillion on income maintenance programs. The effect has been to

Accepted Answer

A)  reduce poverty levels substantially. 
B)  reduce poverty levels moderately. 
C)  have virtually no effect on poverty levels. 
D)  increase poverty substantially. 
A)  reduce poverty levels substantially. 
B)  reduce poverty levels moderately. 
C)  have virtually no effect on poverty levels. 
D)  increase poverty substantially.

Question 15

Which of the following statements is TRUE about income and wealth?

Accepted Answer

A)  Income is a flow measure and wealth is a stock measure. 
B)  Income is a stock measure and wealth is a flow measure. 
C)  Both income and wealth are flow measures. 
D)  Both income and wealth are stock measures. 
A)  Income is a flow measure and wealth is a stock measure. 
B)  Income is a stock measure and wealth is a flow measure. 
C)  Both income and wealth are flow measures. 
D)  Both income and wealth are stock measures.

Question 16

The purpose of the Supplemental Security Income program is

Accepted Answer

A)  to provide a minimum income for all households with children. 
B)  to provide a guaranteed minimum income for all Americans. 
C)  to provide a minimum income for the aged, blind, and the disabled. 
D)  to supplement Social Security for the elderly with medical problems. 
A)  to provide a minimum income for all households with children. 
B)  to provide a guaranteed minimum income for all Americans. 
C)  to provide a minimum income for the aged, blind, and the disabled. 
D)  to supplement Social Security for the elderly with medical problems.

Question 17

Which of the following is NOT a normative standard for income distribution?

Accepted Answer

A)  the productivity standard 
B)  the egalitarian principle 
C)  rewarding people according to merit 
D)  All of the above are normative standards. 
A)  the productivity standard 
B)  the egalitarian principle 
C)  rewarding people according to merit 
D)  All of the above are normative standards.

Question 18

Income is considered to be a

Accepted Answer

A)  nontaxable stream of funds. 
B)  flow. 
C)  stock. 
D)  resource. 
A)  nontaxable stream of funds. 
B)  flow. 
C)  stock. 
D)  resource.

Question 19

A benefit of deductibles and health savings accounts is that they

Accepted Answer

A)  reduce the moral hazard problem associated with third-party payers. 
B)  increase the quality of health care. 
C)  reduce the use of expensive techniques for hopeless cases. 
D)  reduce the incomes of physicians. 
A)  reduce the moral hazard problem associated with third-party payers. 
B)  increase the quality of health care. 
C)  reduce the use of expensive techniques for hopeless cases. 
D)  reduce the incomes of physicians.

Question 20

Describe four of the five major income maintenance programs in the United States that were discussed in the text.

Accepted Answer

The Social Security program has helped m

Exam 30: Income, Poverty, and Health Care

All of the following are income in kind EXCEPT

In general, as individuals undertake additional years of schooling,

Which of the following statements about the Social Security (OASDI) program is FALSE?

Why have health care costs risen so much in recent years?

The age-earnings cycle is an earnings profile of an individual throughout the person's lifetime. The profile shows that

The following are all determinants of income differences examined in the text EXCEPT

Compared to the distribution of money income, the distribution of wealth is

Which of the following would be considered income in kind?

Which of the following are determinants of differences in income?

All of the following are criticisms of the Lorenz curve analysis EXCEPT

Which of the following is NOT correct regarding the theories of income distribution?

The idea that some people engage in risky behavior due to the fact that they have good health care is known as

The government finances Social Security through

Since the War on Poverty was started in 1965, the United States has spent more than $12 trillion on income maintenance programs. The effect has been to

Which of the following statements is TRUE about income and wealth?

The purpose of the Supplemental Security Income program is

Which of the following is NOT a normative standard for income distribution?

Income is considered to be a

A benefit of deductibles and health savings accounts is that they

Describe four of the five major income maintenance programs in the United States that were discussed in the text.

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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