Question 1

Which of the following Gini ratios would indicate the least amount of income inequality?

Accepted Answer

A)  0.20
B)  0.40
C)  0.60
D)  0.80E) C) and D)
F) A) and C) A

Question 2

The primary purpose of Social Security is to

Accepted Answer

A)  subsidize families in need.
B)  offset the progressiveness of the personal income tax.
C)  provide income for workers who are temporarily unemployed.
D)  provide income for retired and disabled workers.E) All of the above
F) B) and C)

Question 3

Refer to the table. What percentage of households made $35,000 or more?

Accepted Answer

A)  23
B)  35
C)  65
D)  77E) B) and C)
F) A) and C)

Question 4

The former food-stamp program is now the Supplemental Nutrition Assistance Program (SNAP) and eligible households now receive

Accepted Answer

A)  vouchers for food purchases.
B)  specialized debit cards that get monthly deposits of electronic money from the government.
C)  credit cards, and they forward the monthly bills to the government.
D)  cash payments.E) All of the above
F) None of the above

Question 5

The Gini ratio is calculated by dividing the area between the Lorenz curve and the diagonal by the

Accepted Answer

A)  remaining area below the diagonal.
B)  total area below the diagonal.
C)  total area of the box or rectangle.
D)  remaining area of the box or rectangle.E) All of the above
F) B) and C)

Question 6

Suppose Gigantic Health Cooperative doesn't hire Mandy Morrison solely because she is a graduate of a particular foreign medical school, which is not known for the high quality of its graduates. Yet Mandy is actually more qualified than the average graduate of American medical schools. This is an example of

Accepted Answer

A)  monopsony exploitation.
B)  human-capital discrimination.
C)  statistical discrimination.
D)  irrational behavior.E) C) and D)
F) A) and B)

Question 7

Poverty is a condition where a person or family does not have the means to

Accepted Answer

A)  satisfy all wants.
B)  save enough for the future.
C)  earn a stable income.
D)  meet basic needs.E) None of the above
F) B) and C)

Question 8

An employer whose discrimination coefficient is $4 will

Accepted Answer

A)  refuse to hire nonpreferred-race workers at any wage rate.
B)  hire only nonpreferred-race workers if the actual nonpreferred-preferred wage differential is $3 an hour.
C)  hire only preferred-race workers if the actual nonpreferred-preferred wage differential is $3 an hour.
D)  hire only preferred-race workers if the nonpreferred-preferred wage differential is $4.E) A) and B)
F) All of the above

Question 9

Refer to the figure, which shows four different Lorenz curves (I, II, III, and IV) . The greatest increase in income inequality would occur with a shift in a Lorenz curve from

Accepted Answer

A)  II to III.
B)  II to IV.
C)  IV to III.
D)  IV to I.E) B) and C)
F) None of the above

Question 10

One cause of income inequality in the United States is

Accepted Answer

A)  the free public school system.
B)  differences in preferences for market work relative to nonmarket activities as well as differences in preferences for types of work.
C)  antidiscrimination laws.
D)  a system of taxes and government transfers that redistributes income away from the lowest earners.E) None of the above
F) All of the above

Question 11

Which of the following helps finance the medical expenses of individuals receiving TANF or SSI?

Accepted Answer

A)  Medicare
B)  Supplemental Security Income (SSI) 
C)  Medicaid
D)  Social SecurityE) A) and B)
F) B) and D)

Question 12

In the taste-for-discrimination model, an increase in the prejudice of employers will decrease the demand for African-American workers, lower the African-American wage rate, and lower the ratio of African-American to white wages.

Accepted Answer

A) True 
 B)False

Question 13

Which of the income distributions in the accompanying table is closest to describing the United States (as of 2017) ?

Accepted Answer

A)  A
B)  B
C)  C
D)  DE) All of the above
F) B) and D)

Question 14

Critics of Universal Basic Income (UBI) oppose it out of concern that it will

Accepted Answer

A)  reduce incentives to work.
B)  magnify fluctuations in the business cycle.
C)  harm businesses by reducing the demand for their output.
D)  raise administrative costs for the government.E) None of the above
F) A) and B)

Question 15

Refer to the diagrams, which show identical marginal utility from income curves for Singer and Catalano. If an initial distribution of $15,000 to Singer and $5,000 to Catalano is altered in favor of greater equality, it may be argued that

Accepted Answer

A)  the combined total utility of the two consumers will decline because Catalano has a greater capacity to derive utility from income than does Singer.
B)  incentives to produce will be weakened and total income will decrease.
C)  incentives to produce will be enhanced and total income will increase.
D)  the combined total utility of the two consumers will decline because Singer has a greater capacity to derive utility from income than does Catalano.E) B) and C)
F) A) and C) B

Question 16

In a labor market generally biased against Hispanics, a reduction in the collective discrimination coefficients of employers will

Accepted Answer

A)  reduce the Hispanic wage rate, increase Hispanic employment, and lower the actual Hispanic-white wage ratio.
B)  reduce the Hispanic wage rate, decrease Hispanic employment, and lower the actual Hispanic-white wage ratio.
C)  increase the Hispanic wage rate, increase Hispanic employment, and increase the actual Hispanic-white wage ratio.
D)  increase the Hispanic wage rate, reduce Hispanic employment, and increase the actual Hispanic-white wage ratio.E) B) and C)
F) B) and D)

Question 17

Assume that all workers are equally productive, but the wage rate for men is $25, compared to $23 for women. An employer who employs only male workers must have a discrimination coefficient of

Accepted Answer

A)  more than $2.
B)  at most 0.2.
C)  less than $2.
D)  1 or less.E) A) and D)
F) C) and D) A

Question 18

After the implementation of TANF, the U.S. welfare rolls fell by roughly one-half between 1996 and 2007.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is not a social insurance program?

Accepted Answer

A)  TANF (Temporary Assistance for Needy Families) 
B)  Medicaid
C)  Supplemental Security Income
D)  unemployment compensationE) All of the above
F) B) and C)

Question 20

A Universal Basic Income program would guarantee that every household receives the same income.

Accepted Answer

A) True 
 B)False

Exam 23: Income Inequality, Poverty, and Discrimination

Which of the following Gini ratios would indicate the least amount of income inequality?

Correct Answer
verified
A

The primary purpose of Social Security is to

Correct Answer
verified

Refer to the table. What percentage of households made $35,000 or more?

Correct Answer
verified

The former food-stamp program is now the Supplemental Nutrition Assistance Program (SNAP) and eligible households now receive

Correct Answer
verified

The Gini ratio is calculated by dividing the area between the Lorenz curve and the diagonal by the

Correct Answer
verified

Correct Answer
verified

Poverty is a condition where a person or family does not have the means to

Correct Answer
verified

An employer whose discrimination coefficient is $4 will

Correct Answer
verified

Refer to the figure, which shows four different Lorenz curves (I, II, III, and IV) . The greatest increase in income inequality would occur with a shift in a Lorenz curve from

Correct Answer
verified

One cause of income inequality in the United States is

Correct Answer
verified

Which of the following helps finance the medical expenses of individuals receiving TANF or SSI?

Correct Answer
verified

In the taste-for-discrimination model, an increase in the prejudice of employers will decrease the demand for African-American workers, lower the African-American wage rate, and lower the ratio of African-American to white wages.

Correct Answer
verified

Which of the income distributions in the accompanying table is closest to describing the United States (as of 2017) ?

Correct Answer
verified

Critics of Universal Basic Income (UBI) oppose it out of concern that it will

Correct Answer
verified

Refer to the diagrams, which show identical marginal utility from income curves for Singer and Catalano. If an initial distribution of $15,000 to Singer and $5,000 to Catalano is altered in favor of greater equality, it may be argued that

Correct Answer
verified
B

In a labor market generally biased against Hispanics, a reduction in the collective discrimination coefficients of employers will

Correct Answer
verified

Assume that all workers are equally productive, but the wage rate for men is $25, compared to $23 for women. An employer who employs only male workers must have a discrimination coefficient of

Correct Answer
verified
A

After the implementation of TANF, the U.S. welfare rolls fell by roughly one-half between 1996 and 2007.

Correct Answer
verified

Which of the following is not a social insurance program?

Correct Answer
verified

A Universal Basic Income program would guarantee that every household receives the same income.

Correct Answer
verified

Exam 23: Income Inequality, Poverty, and Discrimination

Which of the following Gini ratios would indicate the least amount of income inequality?

Correct AnswerverifiedA

The primary purpose of Social Security is to

Correct AnswerverifiedShow Answer

Refer to the table. What percentage of households made $35,000 or more?

Correct AnswerverifiedShow Answer

The former food-stamp program is now the Supplemental Nutrition Assistance Program (SNAP) and eligible households now receive

Correct AnswerverifiedShow Answer

The Gini ratio is calculated by dividing the area between the Lorenz curve and the diagonal by the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Poverty is a condition where a person or family does not have the means to

Correct AnswerverifiedShow Answer

An employer whose discrimination coefficient is $4 will

Correct AnswerverifiedShow Answer

Refer to the figure, which shows four different Lorenz curves (I, II, III, and IV) . The greatest increase in income inequality would occur with a shift in a Lorenz curve from

Correct AnswerverifiedShow Answer

One cause of income inequality in the United States is

Correct AnswerverifiedShow Answer

Which of the following helps finance the medical expenses of individuals receiving TANF or SSI?

Correct AnswerverifiedShow Answer

In the taste-for-discrimination model, an increase in the prejudice of employers will decrease the demand for African-American workers, lower the African-American wage rate, and lower the ratio of African-American to white wages.

Correct AnswerverifiedShow Answer

Which of the income distributions in the accompanying table is closest to describing the United States (as of 2017) ?

Correct AnswerverifiedShow Answer

Critics of Universal Basic Income (UBI) oppose it out of concern that it will

Correct AnswerverifiedShow Answer

Refer to the diagrams, which show identical marginal utility from income curves for Singer and Catalano. If an initial distribution of $15,000 to Singer and $5,000 to Catalano is altered in favor of greater equality, it may be argued that

Correct AnswerverifiedB

In a labor market generally biased against Hispanics, a reduction in the collective discrimination coefficients of employers will

Correct AnswerverifiedShow Answer

Assume that all workers are equally productive, but the wage rate for men is $25, compared to $23 for women. An employer who employs only male workers must have a discrimination coefficient of

Correct AnswerverifiedA

After the implementation of TANF, the U.S. welfare rolls fell by roughly one-half between 1996 and 2007.

Correct AnswerverifiedShow Answer

Which of the following is not a social insurance program?

Correct AnswerverifiedShow Answer

A Universal Basic Income program would guarantee that every household receives the same income.

Correct AnswerverifiedShow Answer

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A

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B

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A

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