Question 1

The crowding model of discrimination suggests that:

Accepted Answer

A)   women and selected minorities are systematically excluded from high-paying occupations and crowded into low-paying occupations,decreasing their wages and reducing domestic output.
B)   employers having high discrimination coefficients will be crowded out by nondiscriminating employers in the long run.
C)   firms will base hiring decisions on group averages,rather than on individual characteristics and productivity.
D)   occupational segregation is largely the result of freely made rational choices of women and minorities.E) A) and B)
F) None of the above

Question 2

The U.S.poverty rate for the elderly (65 and over)is higher than for the general population.

Accepted Answer

A) True 
 B)False

Question 3

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) C) and D)
F) A) and D)

Question 4

The exercise of market power by suppliers in resource markets tends to:

Accepted Answer

A)   reduce income inequality ensuring that all workers receive fair wages.
B)   have little impact on the distribution of income.
C)   increase income inequality by raising incomes of those able to "rig the market."
D)   increase income inequality but is offset by the exercise of market power in product markets.E) None of the above
F) A) and B)

Question 5

The basic economic argument for greater income equality is that:

Accepted Answer

A)   an equal distribution of income is the logical outcome of any tax-transfer program.
B)   because citizens enjoy political equality,they are also entitled to economic equality.
C)   a more equal distribution of income will tend to maximize incentives to work,invest,and assume risk.
D)   a more equal distribution of a given amount of income will increase the total utility of consumers.E) C) and D)
F) A) and D)

Question 6

A major difference between social insurance and public assistance is that the:

Accepted Answer

A)   former is regarded as an earned right while the latter is public charity.
B)   latter is regarded as an earned right while the former is public charity.
C)   latter is financed through earmarked payroll taxes and the former is financed by general tax revenues.
D)   former are state and local programs while the latter are federal programs.E) B) and C)
F) All of the above

Question 7

The distribution of wealth in the United States is such that it:

Accepted Answer

A)   is randomly distributed among income classes.
B)   has no perceptible impact on the distribution of income.
C)   reduces income inequality.
D)   contributes to income inequality.E) B) and D)
F) All of the above

Question 8

Which of the following would most likely increase income inequality?

Accepted Answer

A)   Improvements in public education.
B)   Greater monopoly power among product sellers.
C)   Greater equality in the distribution of wealth.
D)   Fewer differences in working conditions across occupations.E) A) and D)
F) A) and C)

Question 9

In the United States,the lifetime distribution of income is more equal than the annual distribution.This statement is:

Accepted Answer

A)   true because the rich have gotten richer and the poor have gotten poorer.
B)   true because there is considerable income mobility over time.
C)   false because people tend to stay in the same income quintile over extended periods of time.
D)   false because the rich have gotten richer and the poor have gotten poorer.E) A) and C)
F) A) and B)

Question 10

The poverty rate in the United States was:

Accepted Answer

A)   12 percent in 2011.
B)   higher in 2011 than in 1960.
C)   about the same in 2011 as in 1993.
D)   nearly 20 percent in 2011.E) B) and C)
F) None of the above

Question 11

(Consider This) In "Slicing the Pizza," the shrinkage of the pizza refers to the:

Accepted Answer

A)   fact that poor people are not helped by the income-maintenance system.
B)   efficiency losses-the losses of output and income associated with the tax-transfer system.
C)   tendency of rich people in developing nations to hoard their wealth overseas.
D)   failure of the Internal Revenue Service to collect all the tax revenues owed by taxpayers.E) All of the above
F) None of the above

Question 12

Each of the following contributes to income inequality except:

Accepted Answer

A)   differences in ability and training.
B)   differences in job tastes.
C)   differences in wealth ownership.
D)   government transfers.E) A) and B)
F) B) and D)

Question 13

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.E) B) and D)
F) A) and D)

Question 14

Unemployment compensation is financed by taxes levied on employers.

Accepted Answer

A) True 
 B)False

Question 15

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.E) B) and C)
F) All of the above

Question 16

If discrimination based on gender and race was eliminated,we would expect the:

Accepted Answer

A)   personal distribution of income to become less equal.
B)   personal distribution of income to become more equal.
C)   personal distribution of income to be unaffected.
D)   functional distribution of income to change in favor of profits and interest.E) None of the above
F) All of the above

Question 17

Wealth in the United States is:

Accepted Answer

A)   distributed in a way that reduces the degree of income inequality.
B)   more unequally distributed than is income.
C)   less unequally distributed than is income.
D)   distributed in a way that has no effect on income inequality.E) A) and D)
F) B) and D)

Question 18

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.E) A) and D)
F) B) and D)

Question 19

The Lorenz curve:

Accepted Answer

A)   plots graphically the poverty rate over time.
B)   is located closer to the diagonal today than it was in 1975.
C)   plots graphically the distribution of income.
D)   is located farther from the diagonal when income is defined to include the value of noncash transfers.E) A) and D)
F) B) and C)

Question 20

Since 1975 the distribution of income has:

Accepted Answer

A)   remained virtually constant from year to year.
B)   become more equal.
C)   varied considerably from year to year but in general has been stable.
D)   become less equal.E) B) and C)
F) A) and B)

Exam 22: Income Inequality Poverty and Discrimination

The U.S.poverty rate for the elderly (65 and over)is higher than for the general population.

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Since 1975 the distribution of income has:

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The crowding model of discrimination suggests that:

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The distribution of wealth in the United States is such that it:

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In the United States,the lifetime distribution of income is more equal than the annual distribution.This statement is:

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

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The Lorenz curve:

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

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Each of the following contributes to income inequality except:

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The poverty rate in the United States was:

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(Consider This) In "Slicing the Pizza," the shrinkage of the pizza refers to the:

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Which of the following would most likely increase income inequality?

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

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Wealth in the United States is:

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Unemployment compensation is financed by taxes levied on employers.

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Differences in the amounts and quality of education and training:

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A major difference between social insurance and public assistance is that the:

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The exercise of market power by suppliers in resource markets tends to:

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If discrimination based on gender and race was eliminated,we would expect the:

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The basic economic argument for greater income equality is that:

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