Question 1

(Consider This)  Sandy currently earns wages of $20,000 per year.In her state, that qualifies her for $5,000 worth of housing credits, but those credits are withdrawn for anyone earning $22,000 per year or more.If Sandy were to find a part-time job that earned her $3,000 per year,

Accepted Answer

A)  Sandy would be worse off by $1,000 if she took the job.
B)  Sandy would be better off by $3,000 if she took the job.
C)  Sandy is equally well off financially whether she takes the job or not.
D)  Sandy would be worse off by $2,000 if she took the job.E) C) and D)
F) All of the above

Question 2

The difference between income and wealth is that income

Accepted Answer

A)  is accumulated, while wealth is earned.
B)  refers to a flow of earnings, while wealth is the stock of assets one has.
C)  is measured at a point in time, while wealth is measured over a period of time.
D)  may not be in cash, while wealth is in cash.E) A) and B)
F) C) and D)

Question 3

The crowding of certain ethnic or racial groups into specific occupations results in

Accepted Answer

A)  lower wages and a less efficient allocation of resources.
B)  lower wages but a more efficient allocation of resources.
C)  lower wages but no effect on the efficient allocation of resources.
D)  higher wages and a more efficient allocation of labor resources.E) A) and C)
F) B) and D)

Question 4

For an employer biased against African Americans, the discrimination coefficient d

Accepted Answer

A)  will decrease if the employer becomes more prejudiced against African Americans.
B)  must equal the actual ratio of African-American to white wage rates.
C)  measures the amount an employer is willing to pay to hire a white over hiring an African-American worker.
D)  varies inversely with the actual African-American to white wage ratio.E) B) and D)
F) A) and C)

Question 5

U.S.income statistics indicate that more than one-eighth of the nation lived in poverty in 2014.

Accepted Answer

A) True 
 B)False

Question 6

A progressive income tax would cause the after-tax Lorenz curve, compared with the before-tax Lorenz curve, to be

Accepted Answer

A)  more bowed toward the southeast.
B)  less bowed toward the southeast.
C)  a vertical line.
D)  a horizontal line.E) B) and C)
F) A) and D)

Question 7

By December 2009, the recession that began in December 2007

Accepted Answer

A)  had shifted 2 million people out of TANF and into the unemployment compensation system.
B)  doubled the number of people on welfare.
C)  raised the number of TANF recipients from 3.9 million to about 4.4 million.
D)  raised the number of TANF recipients to about 5 percent of the population.E) None of the above
F) B) and D)

Question 8

In the U.S., the percentage of total population living in poverty fell significantly during which of the following periods?

Accepted Answer

A)  1959-1969
B)  1969-1979
C)  2001-2004
D)  2008-2011E) All of the above
F) None of the above

Question 9

An example of a social insurance program is , whereas an example of a public assistance program is .

Accepted Answer

A)  Temporary Assistance for Needy Families; unemployment compensation
B)  Supplemental Security Income; unemployment compensation
C)  Social Security; Supplemental Nutrition Assistance Program
D)  Medicaid; MedicareE) A) and B)
F) A) and D)

Question 10

Suppose Copernicus Corporation hires Damon Danielson rather than Elmer Ellison, simply because Damon is a graduate of an Ivy League school, while Elmer is a graduate of a small public university.Elmer is actually more qualified than Damon.This is an example of

Accepted Answer

A)  statistical discrimination.
B)  irrational behavior.
C)  monopsony exploitation.
D)  human-capital discrimination.E) A) and C)
F) None of the above

Question 11

For which of the following income-maintenance programs is aggregate spending the greatest?

Accepted Answer

A)  Medicare
B)  Social Security
C)  Unemployment compensation
D)  TANFE) A) and D)
F) A) and C)

Question 12

The poverty rate for African Americans is

Accepted Answer

A)  greater than for any other racial or ethnic group.
B)  below that for whites.
C)  considerably lower than that for Hispanics.
D)  below that for persons 65 years of age or older.E) A) and C)
F) A) and D)

Question 13

An employer is prejudiced, prefers to hire white rather than Hispanic workers, and is willing to pay higher wages to obtain white workers.This illustrates

Accepted Answer

A)  reverse discrimination.
B)  the crowding model.
C)  the taste-for-discrimination model.
D)  statistical discrimination.E) A) and B)
F) C) and D)

Question 14

A curve showing the quintile distribution of a nation's income is called the Gini curve.

Accepted Answer

A) True 
 B)False

Question 15

The degree of inequality in the distribution of income in an economy is depicted in a(n)

Accepted Answer

A)  Lorenz curve.
B)  Phillips curve.
C)  Engels curve.
D)  indifference curve.E) B) and C)
F) B) and D)

Question 16

The difference between household assets and liabilities is referred to as

Accepted Answer

A)  debt.
B)  income.
C)  net worth.
D)  expenditures.E) C) and D)
F) A) and B)

Question 17

In the taste for discrimination model, the perceived cost for a prejudiced white employer for hiring an African-American worker is

Accepted Answer

A)  the ratio of the wages of African-American workers to white workers.
B)  the ratio of the wages of white workers to African-American workers.
C)  the wages of African-American workers plus the monetary value of the disutility from hiring an African-American worker.
D)  the wages of a white worker plus the monetary value of the disutility from hiring an African-American worker.E) B) and D)
F) None of the above

Question 18

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) None of the above
F) All of the above

Question 19

The equality-efficiency trade-off would be most closely associated with which one of the following statements?

Accepted Answer

A)  The rich get richer and the poor get poorer.
B)  The only way to create income equality is to take from the rich and give to the poor.
C)  If cutting the income pie in more equal slices tends to shrink the pie, what amount of shrinkage will society tolerate?
D)  People are less concerned with the larger question of income distribution than they are with the more specific issue of income inadequacy.E) C) and D)
F) None of the above

Question 20

Statistical discrimination is also known as occupational discrimination.

Accepted Answer

A) True 
 B)False

Exam 23: Income Inequality, Poverty, and Discrimination

Suppose Copernicus Corporation hires Damon Danielson rather than Elmer Ellison, simply because Damon is a graduate of an Ivy League school, while Elmer is a graduate of a small public university.Elmer is actually more qualified than Damon.This is an example of

Correct AnswerverifiedShow Answer

For an employer biased against African Americans, the discrimination coefficient d

Correct AnswerverifiedShow Answer

An employer is prejudiced, prefers to hire white rather than Hispanic workers, and is willing to pay higher wages to obtain white workers.This illustrates

Correct AnswerverifiedShow Answer

The crowding of certain ethnic or racial groups into specific occupations results in

Correct AnswerverifiedShow Answer

The difference between household assets and liabilities is referred to as

Correct AnswerverifiedShow Answer

In the U.S., the percentage of total population living in poverty fell significantly during which of the following periods?

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The poverty rate for African Americans is

Correct AnswerverifiedShow Answer

By December 2009, the recession that began in December 2007

Correct AnswerverifiedShow Answer

A curve showing the quintile distribution of a nation's income is called the Gini curve.

Correct AnswerverifiedShow Answer

A progressive income tax would cause the after-tax Lorenz curve, compared with the before-tax Lorenz curve, to be

Correct AnswerverifiedShow Answer

(Consider This) Sandy currently earns wages of $20,000 per year.In her state, that qualifies her for $5,000 worth of housing credits, but those credits are withdrawn for anyone earning $22,000 per year or more.If Sandy were to find a part-time job that earned her $3,000 per year,

Correct AnswerverifiedShow Answer

The equality-efficiency trade-off would be most closely associated with which one of the following statements?

Correct AnswerverifiedShow Answer

Statistical discrimination is also known as occupational discrimination.

Correct AnswerverifiedShow Answer

U.S.income statistics indicate that more than one-eighth of the nation lived in poverty in 2014.

Correct AnswerverifiedShow Answer

For which of the following income-maintenance programs is aggregate spending the greatest?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In the taste for discrimination model, the perceived cost for a prejudiced white employer for hiring an African-American worker is

Correct AnswerverifiedShow Answer

The degree of inequality in the distribution of income in an economy is depicted in a(n)

Correct AnswerverifiedShow Answer

The difference between income and wealth is that income

Correct AnswerverifiedShow Answer

An example of a social insurance program is , whereas an example of a public assistance program is .

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