Question 1

As the distribution of income becomes more equal, the Lorenz curve comes closer to the 45-degree line.

Accepted Answer

A) True 
 B)False

Question 2

________ is financed through general revenues.

Accepted Answer

A)   Medicare
B)   The SNAP program
C)   The Social Security system
D)   Unemployment compensationE) A) and B)
F) None of the above

Question 3

Any society bound by a contract calling for an income distribution that would ________ the well-being of the worst-off member of society would allow for inequality if that inequality had the effect of ________ the lot of the very poor.

Accepted Answer

A)   minimize; improving
B)   maximize; improving
C)   maximize; worsening
D)   minimize; worseningE) A) and D)
F) A) and C)

Question 4

The largest single transfer program at the federal level is unemployment insurance.

Accepted Answer

A) True 
 B)False

Question 5

Philosophical issues regarding income redistribution deal with all of the following except

Accepted Answer

A)   What is and is not possible?
B)   What is fair?
C)   What is just?
D)   What is the ideal distribution of income?E) B) and D)
F) A) and D)

Question 6

Critics of minimum wage laws argue that such laws will end up hurting people with ________ skill levels because these laws interfere with the smooth functioning of the labor market and create ________.

Accepted Answer

A)   higher; a shortage of labor
B)   higher; unemployment
C)   lower; a shortage of labor
D)   lower; unemploymentE) B) and D)
F) A) and B)

Question 7

The notion of ________ is that through income redistribution, the rich sacrifice a little and the poor gain a lot.

Accepted Answer

A)   utilitarian justice
B)   distributional justice
C)   Rawlsian justice
D)   labor valueE) None of the above
F) B) and C)

Question 8

If we consider one Gini coefficient for the entire population of the world, this coefficient has probably ________ in the last two decades.

Accepted Answer

A)   increased
B)   decreased
C)   remained unchanged
D)   fallen to zeroE) C) and D)
F) None of the above

Question 9

Refer to the information provided in Figure 18.1 below to answer the question(s)  that follow.  Figure 18.1
-Refer to Figure 18.1. The third fifth of families earned ________% of income in Outland.

Accepted Answer

A)   12
B)   23
C)   25
D)   35E) C) and D)
F) All of the above

Question 10

A proportional income tax means that those with a higher income pay

Accepted Answer

A)   a lower percentage of their income in taxes than low-income people.
B)   a higher percentage of their income in taxes than low-income people.
C)   the same percentage of their income in taxes as low-income people.
D)   all the taxes in the economy.E) C) and D)
F) A) and C)

Question 11

Property income generally takes the form of all of the following except

Accepted Answer

A)   transfer payments.
B)   interest.
C)   profits.
D)   dividends.E) None of the above
F) B) and D)

Question 12

As income becomes more equally distributed, the Lorenz curve ________ and ________.

Accepted Answer

A)   moves further down to the right; the shaded area increases
B)   moves further up to the left; the shaded area decreases
C)   moves further up to the left rising above the 45 degree line; the shaded area increases
D)   moves further down to the right; the shaded area decreasesE) All of the above
F) B) and C)

Question 13

Upon graduation, Shawntae had two job offers. The jobs were identical in every way with two exceptions. One job was located in Ft. Lauderdale, FL and offered an annual salary of $95,000. The other job was located in Tulsa, OK and offered an annual salary of $72,000. All else equal, the salary difference is due to

Accepted Answer

A)   compensating differentials.
B)   discrimination.
C)   transfer payments
D)   the firm in Florida had a lower demand for workers than the firm in Oklahoma.E) None of the above
F) A) and B)

Question 14

Unemployment benefits are

Accepted Answer

A)   paid regardless of a person's income from other sources and regardless of assets.
B)   reduced by an amount that is equal to an individual's income from other sources.
C)   not paid to individuals with assets valued over $200,000.
D)   paid to individuals the entire time they are unemployed regardless of how long they are unemployed.E) A) and D)
F) A) and C)

Question 15

The two main sources of household income are wages/salaries and property income.

Accepted Answer

A) True 
 B)False

Question 16

________ is financed through a payroll tax.

Accepted Answer

A)   The Food Stamp program
B)   The Public Housing program
C)   The Earned Income Tax Credit program
D)   The Social Security systemE) A) and B)
F) A) and C)

Question 17

The second-largest cash transfer program(s)  in the United States, smaller than only the Social Security system, is(are)  the

Accepted Answer

A)   unemployment insurance program.
B)   Temporary Assistance to Needy Families (TANF)  program.
C)   Medicare and Medicaid programs.
D)   Supplemental Nutrition Assistance (SNAP)  program.E) A) and B)
F) C) and D)

Question 18

Households acquire property through

Accepted Answer

A)   inheritance only.
B)   savings and inheritance.
C)   savings only.
D)   supplying labor in the labor market.E) B) and D)
F) B) and C)

Question 19

An example of a compensating differential is

Accepted Answer

A)   a cardiologist must train for two more years than a family practitioner and on average cardiologists earn 65% more per year than family practitioners.
B)   a police department hires both men and women who have just graduated from college. The men are assigned patrol duty, and the women are assigned desk jobs.
C)   it takes the same amount and type of training to be either a paramedic or an emergency room nurse. Paramedics earn about 25% more than emergency room nurses with the same amount of experience. About 12% of paramedics, but only 3% of emergency room nurses, are injured on the job each year.
D)   Paulie was injured on the job at a tanning salon and as a result of his injuries he can no longer work. He now qualifies for $1,600 a month in disability payments.E) B) and C)
F) A) and B)

Question 20

In the ________, the tax receipts from today's workers are used to pay benefits to retired and disabled workers and their dependents today.

Accepted Answer

A)   Medicare and Medicaid programs
B)   public assistance (welfare)  program
C)   Social Security system
D)   unemployment insurance programE) A) and B)
F) A) and C)

Exam 18: Income Distribution and Poverty

________ is financed through a payroll tax.

Correct Answer
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Unemployment benefits are

Correct Answer
verified

Correct Answer
verified

Refer to the information provided in Figure 18.1 below to answer the question(s) that follow. Figure 18.1 -Refer to Figure 18.1. The third fifth of families earned ________% of income in Outland.

Correct Answer
verified

Any society bound by a contract calling for an income distribution that would the well-being of the worst-off member of society would allow for inequality if that inequality had the effect of the lot of the very poor.

Correct Answer
verified

A proportional income tax means that those with a higher income pay

Correct Answer
verified

As the distribution of income becomes more equal, the Lorenz curve comes closer to the 45-degree line.

Correct Answer
verified

Critics of minimum wage laws argue that such laws will end up hurting people with skill levels because these laws interfere with the smooth functioning of the labor market and create .

Correct Answer
verified

If we consider one Gini coefficient for the entire population of the world, this coefficient has probably ________ in the last two decades.

Correct Answer
verified

Property income generally takes the form of all of the following except

Correct Answer
verified

In the ________, the tax receipts from today's workers are used to pay benefits to retired and disabled workers and their dependents today.

Correct Answer
verified

The second-largest cash transfer program(s) in the United States, smaller than only the Social Security system, is(are) the

Correct Answer
verified

The two main sources of household income are wages/salaries and property income.

Correct Answer
verified

An example of a compensating differential is

Correct Answer
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The notion of ________ is that through income redistribution, the rich sacrifice a little and the poor gain a lot.

Correct Answer
verified

As income becomes more equally distributed, the Lorenz curve and .

Correct Answer
verified

Philosophical issues regarding income redistribution deal with all of the following except

Correct Answer
verified

________ is financed through general revenues.

Correct Answer
verified

Households acquire property through

Correct Answer
verified

The largest single transfer program at the federal level is unemployment insurance.

Correct Answer
verified

Exam 18: Income Distribution and Poverty

________ is financed through a payroll tax.

Correct AnswerverifiedShow Answer

Unemployment benefits are

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Refer to the information provided in Figure 18.1 below to answer the question(s) that follow. Figure 18.1 -Refer to Figure 18.1. The third fifth of families earned ________% of income in Outland.

Correct AnswerverifiedShow Answer

Any society bound by a contract calling for an income distribution that would ________ the well-being of the worst-off member of society would allow for inequality if that inequality had the effect of ________ the lot of the very poor.

Correct AnswerverifiedShow Answer

A proportional income tax means that those with a higher income pay

Correct AnswerverifiedShow Answer

As the distribution of income becomes more equal, the Lorenz curve comes closer to the 45-degree line.

Correct AnswerverifiedShow Answer

Critics of minimum wage laws argue that such laws will end up hurting people with ________ skill levels because these laws interfere with the smooth functioning of the labor market and create ________.

Correct AnswerverifiedShow Answer

If we consider one Gini coefficient for the entire population of the world, this coefficient has probably ________ in the last two decades.

Correct AnswerverifiedShow Answer

Property income generally takes the form of all of the following except

Correct AnswerverifiedShow Answer

In the ________, the tax receipts from today's workers are used to pay benefits to retired and disabled workers and their dependents today.

Correct AnswerverifiedShow Answer

The second-largest cash transfer program(s) in the United States, smaller than only the Social Security system, is(are) the

Correct AnswerverifiedShow Answer

The two main sources of household income are wages/salaries and property income.

Correct AnswerverifiedShow Answer

An example of a compensating differential is

Correct AnswerverifiedShow Answer

The notion of ________ is that through income redistribution, the rich sacrifice a little and the poor gain a lot.

Correct AnswerverifiedShow Answer

As income becomes more equally distributed, the Lorenz curve ________ and ________.

Correct AnswerverifiedShow Answer

Philosophical issues regarding income redistribution deal with all of the following except

Correct AnswerverifiedShow Answer

________ is financed through general revenues.

Correct AnswerverifiedShow Answer

Households acquire property through

Correct AnswerverifiedShow Answer

The largest single transfer program at the federal level is unemployment insurance.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Any society bound by a contract calling for an income distribution that would the well-being of the worst-off member of society would allow for inequality if that inequality had the effect of the lot of the very poor.

Correct Answer
verified

Correct Answer
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Correct Answer
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Critics of minimum wage laws argue that such laws will end up hurting people with skill levels because these laws interfere with the smooth functioning of the labor market and create .

Correct Answer
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Correct Answer
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Correct Answer
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As income becomes more equally distributed, the Lorenz curve and .

Correct Answer
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Correct Answer
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