Question 1

The official dividing line between the poor and nonpoor is called the

Accepted Answer

A)  life threshold.
B)  life edge.
C)  poverty line.
D)  beginning line.E) C) and D)
F) A) and D)

Question 2

The simplest economic definition of discrimination is

Accepted Answer

A)  prejudice.
B)  unequal pay for equal work.
C)  a dislike by one group associating with another group.
D)  unequal pay for unequal work.E) A) and D)
F) B) and D)

Question 3

A free market system tends to

Accepted Answer

A)  produce a fairly equal distribution of income.
B)  pay people exactly what they are worth.
C)  produce a relatively unequal distribution of income.
D)  pay most people more than they are worth, at the expense of reducing firms' profits.E) A) and B)
F) B) and C)

Question 4

Which of the following is not a source of income inequality?

Accepted Answer

A)  Inherited wealth
B)  Differences in ability
C)  Negative income taxes
D)  LuckE) B) and C)
F) A) and B)

Question 5

Under a relative concept of poverty, poverty

Accepted Answer

A)  doesn't really exist.
B)  is higher in rich countries than in poor countries.
C)  can never be wholly eliminated by public policy.
D)  declines as technology advances.E) A) and B)
F) A) and C)

Question 6

What are the strengths and weaknesses of the negative income tax (NIT)as an alternative to traditional welfare programs?

Accepted Answer

The tax would increase the incentive to ...

Question 7

The highest-income fifth of the U.S. population earns more than 50 percent of all income.

Accepted Answer

A) True 
 B)False

Question 8

With a negative income tax providing a minimum of $20,000 and a tax rate of 25 percent, what amount of supplement would the government pay to a household earning $10,000?

Accepted Answer

A)  $5,000
B)  $10,000
C)  $17,500
D)  $20,000E) B) and D)
F) B) and C)

Question 9

If a female supervisor is discriminated against by one of her workers who refuses to cooperate, she may earn lower wages.

Accepted Answer

A) True 
 B)False

Question 10

In 2017, the median income for a household of four was about

Accepted Answer

A)  $50,000
B)  $60,000
C)  $80,000
D)  $100,000E) All of the above
F) None of the above

Question 11

One of the more powerful forces leading to an end in economic discrimination is

Accepted Answer

A)  pure competition.
B)  pure monopoly.
C)  government regulation.
D)  oligopolistic rivalry.E) None of the above
F) All of the above

Question 12

If two individuals have identical schooling, their incomes will be equal.

Accepted Answer

A) True 
 B)False

Question 13

Table 21-1  
-Consider the economy described by the income distribution in Table 21-1. From this table, we can conclude that the

Accepted Answer

A)  poorest quarter of the population earns 15 percent of the income.
B)  "middle" fifth of the population earns 32 percent of the income.
C)  poorest quarter of the population earns 19 percent of the income.
D)  richest fifth of the population earns 49 percent of the income.E) A) and B)
F) B) and C)

Question 14

The economic theory of discrimination suggests that the practice of apartheid in South Africa should have

Accepted Answer

A)  worsened the economic condition of only the blacks.
B)  worsened the economic condition of only the whites.
C)  worsened the economic condition of blacks, whites, and others.
D)  improved the economic condition of the whites.E) B) and C)
F) A) and B)

Question 15

Employers near military bases are aware that wives generally accompany their servicemen husbands when they are transferred. When presented with nonservice-wife applicants and wives of servicemen, they hire the nonservice-wife applicants. This is an example of

Accepted Answer

A)  gender discrimination.
B)  statistical discrimination.
C)  economic discrimination.
D)  prejudicial discrimination.E) A) and B)
F) C) and D)

Question 16

Which of the following best describes compensating wage differentials ?

Accepted Answer

A)  Some jobs are more difficult than others, and the pay for them reflects this.
B)  Some jobs require more training than others, and the pay for them reflects this.
C)  Some jobs require more experience than others, and the pay for them reflects this.
D)  Some jobs require unique abilities, and the pay for them reflects this.E) A) and C)
F) None of the above

Question 17

The Earned Income Tax Credit (EITC)is a more efficient means to redistribute income to people below the poverty line than direct cash transfers.

Accepted Answer

A) True 
 B)False

Question 18

Many economists believe that

Accepted Answer

A)  once a negative income tax system was in place, the United States could increase economic equality indefinitely without reducing economic efficiency.
B)  a negative income tax would be less efficient than the current welfare system.
C)  replacing the current welfare system with a negative income tax would increase both economic efficiency and economic equality.
D)  None of the above is correct.E) A) and B)
F) A) and C)

Question 19

The United States has less income inequality than most other developed countries.

Accepted Answer

A) True 
 B)False

Question 20

TANF sets a lifetime cap for benefits at 10 years.

Accepted Answer

A) True 
 B)False

Exam 20: Poverty, Inequality, and Discrimination

Many economists believe that

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Under a relative concept of poverty, poverty

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Table 21-1 -Consider the economy described by the income distribution in Table 21-1. From this table, we can conclude that the

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The Earned Income Tax Credit (EITC)is a more efficient means to redistribute income to people below the poverty line than direct cash transfers.

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If a female supervisor is discriminated against by one of her workers who refuses to cooperate, she may earn lower wages.

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Which of the following is not a source of income inequality?

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If two individuals have identical schooling, their incomes will be equal.

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The highest-income fifth of the U.S. population earns more than 50 percent of all income.

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The official dividing line between the poor and nonpoor is called the

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The simplest economic definition of discrimination is

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Which of the following best describes compensating wage differentials ?

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The United States has less income inequality than most other developed countries.

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One of the more powerful forces leading to an end in economic discrimination is

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Employers near military bases are aware that wives generally accompany their servicemen husbands when they are transferred. When presented with nonservice-wife applicants and wives of servicemen, they hire the nonservice-wife applicants. This is an example of

Correct AnswerverifiedShow Answer

The economic theory of discrimination suggests that the practice of apartheid in South Africa should have

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In 2017, the median income for a household of four was about

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A free market system tends to

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TANF sets a lifetime cap for benefits at 10 years.

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With a negative income tax providing a minimum of $20,000 and a tax rate of 25 percent, what amount of supplement would the government pay to a household earning $10,000?

Correct AnswerverifiedShow Answer

What are the strengths and weaknesses of the negative income tax (NIT)as an alternative to traditional welfare programs?

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The tax would increase the incentive to ...
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