Question 1

If a law firm prefers to hire men over women because the firm has found men to be more productive, on average, then the firm is practicing

Accepted Answer

A)  wage discrimination.
B)  reverse discrimination.
C)  statistical discrimination.
D)  human-capital discrimination.

Question 2

Differences in the amounts and quality of education and training

Accepted Answer

A)  combine with differences in mental, physical, and aesthetic talents to produce income inequality.
B)  explain none of the income inequality in the United States.
C)  explain nearly all the income inequality in the United States.
D)  have lessened in the United States in the past decade, sharply reducing income inequality.

Question 3

Which of the following demographic groups does not bear a disproportionate burden of poverty?

Accepted Answer

A)  households headed by women
B)  persons 65 or over
C)  Hispanics
D)  children under 18

Question 4

Which of the following is a major reason for the growing income inequality in the United States since 1975?

Accepted Answer

A)  higher marginal tax rates
B)  unemployment benefits
C)  rising number of skilled workers
D)  import competition

Question 5

One of the major causes of income inequality is differences in

Accepted Answer

A)  unemployment benefits.
B)  transportation.
C)  education.
D)  housing.

Question 6

Which of the following Gini ratios indicates the highest degree of income inequality?

Accepted Answer

A)  0.78
B)  0.65
C)  0.29
D)  0.42

Question 7

Since 1975, the distribution of household income in the United States has

Accepted Answer

A)  moved toward greater inequality.
B)  moved toward greater equality.
C)  remained about the same.
D)  fluctuated considerably.

Question 8

Which of the following terms describes a system of subsidized health insurance available to the aged?

Accepted Answer

A)  Medicare
B)  Supplemental Security Income (SSI) 
C)  Medicaid
D)  TANF

Question 9

The incidence of poverty is very high among the elderly (65 years or older).

Accepted Answer

A) True 
 B)False

Question 10

Suppose the market wage rate for whites is $18 an hour and the monetary value a prejudiced employer attaches to the disutility of hiring African Americans is $3.This employer will be indifferent between hiring African Americans and whites only when the African-American wage rate is

Accepted Answer

A)  $3.
B)  $12.
C)  $15.
D)  $21.

Question 11

Economic discrimination puts the economy inside its production possibilities curve because discrimination

Accepted Answer

A)  redistributes income from low-paid to high-paid persons.
B)  promotes present consumption rather than production of capital goods.
C)  arbitrarily blocks women and certain minorities from higher-productivity, higher-wage jobs and thus keeps the economy from producing its maximum output.
D)  often causes inflation, which reduces the nation's real output.

Question 12

Which is correct?

Accepted Answer

A)  Wealth is less equally distributed than income and therefore increases income inequality.
B)  Wealth is more equally distributed than income and therefore increases income inequality.
C)  Wealth is less equally distributed than income and therefore decreases income inequality.
D)  Wealth is more equally distributed than income and therefore decreases income inequality.

Question 13

The effect of the so-called welfare cliff is that it discourages welfare recipients from doing the following, except

Accepted Answer

A)  working more hours.
B)  finding and transitioning into higher-paying jobs.
C)  applying for an extension of the welfare payment.
D)  acquiring education and training for better jobs.

Question 14

Which of the following is not a basic difference between Medicare and Medicaid?

Accepted Answer

A)  Medicare is financed by a payroll tax, while Medicaid is financed by general tax revenues.
B)  Medicare is a federal program, while Medicaid is a state-government program.
C)  Medicare is mostly based on age, while Medicaid is mostly based on income.
D)  Medicare is a social insurance program, while Medicaid is a public assistance program.

Question 15

(Last Word)  Between 1995 and 2007 in the United States,

Accepted Answer

A)  average U.S.household wealth increased and median household wealth declined.
B)  average U.S.household wealth declined and median household wealth increased.
C)  both average and median U.S.household wealth declined.
D)  both average and median U.S.household wealth increased.

Question 16

The top 20 percent of U.S.income earners receive nearly 80 percent of total U.S.income.

Accepted Answer

A) True 
 B)False

Question 17

A major difference between social insurance and welfare is that social insurance

Accepted Answer

A)  exclusively involves older Americans, whereas welfare is confined mainly to mothers with young children.
B)  forces recipients to demonstrate need, while welfare does not.
C)  is normally financed by earmarked payroll taxes, while welfare is financed out of general tax revenues.
D)  provides cash transfers, while welfare does not.

Question 18

The basic reason why the debate between income equality versus inequality is ongoing is because there is a trade-off between income equality and economic efficiency.

Accepted Answer

A) True 
 B)False

Question 19

The Social Security program is financed with funds from general tax revenues of the federal government.

Accepted Answer

A) True 
 B)False

Question 20

In 2014, a household with an annual income of $23,000 would find itself in the

Accepted Answer

A)  highest quintile of the household income distribution.
B)  lowest quintile of the household income distribution.
C)  second lowest quintile of the household income distribution.
D)  second highest quintile of the household income distribution.

Exam 23: Income Inequality, Poverty, and Discrimination

If a law firm prefers to hire men over women because the firm has found men to be more productive, on average, then the firm is practicing

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Which of the following is not a basic difference between Medicare and Medicaid?

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The incidence of poverty is very high among the elderly (65 years or older).

Correct AnswerverifiedShow Answer

Suppose the market wage rate for whites is $18 an hour and the monetary value a prejudiced employer attaches to the disutility of hiring African Americans is $3.This employer will be indifferent between hiring African Americans and whites only when the African-American wage rate is

Correct AnswerverifiedShow Answer

Which is correct?

Correct AnswerverifiedShow Answer

(Last Word) Between 1995 and 2007 in the United States,

Correct AnswerverifiedShow Answer

The basic reason why the debate between income equality versus inequality is ongoing is because there is a trade-off between income equality and economic efficiency.

Correct AnswerverifiedShow Answer

Which of the following Gini ratios indicates the highest degree of income inequality?

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The Social Security program is financed with funds from general tax revenues of the federal government.

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A major difference between social insurance and welfare is that social insurance

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Economic discrimination puts the economy inside its production possibilities curve because discrimination

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Which of the following terms describes a system of subsidized health insurance available to the aged?

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One of the major causes of income inequality is differences in

Correct AnswerverifiedShow Answer

Which of the following is a major reason for the growing income inequality in the United States since 1975?

Correct AnswerverifiedShow Answer

Since 1975, the distribution of household income in the United States has

Correct AnswerverifiedShow Answer

In 2014, a household with an annual income of $23,000 would find itself in the

Correct AnswerverifiedShow Answer

Differences in the amounts and quality of education and training

Correct AnswerverifiedShow Answer

Which of the following demographic groups does not bear a disproportionate burden of poverty?

Correct AnswerverifiedShow Answer

The effect of the so-called welfare cliff is that it discourages welfare recipients from doing the following, except

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The top 20 percent of U.S.income earners receive nearly 80 percent of total U.S.income.

Correct AnswerverifiedShow Answer

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