Question 1

The U.S.income tax system is progressive.

Accepted Answer

A) True 
 B)False  True

Question 2

An employer who refuses to hire women because of the chance they may quit for childbearing purposes is engaging in statistical discrimination.

Accepted Answer

A) True 
 B)False  True

Question 3

Discrimination can come from many groups of people, including employers and fellow employees.

Accepted Answer

A) True 
 B)False  True

Question 4

A tax is more likely to promote economic equality if it is

Accepted Answer

A)  regressive. 
B)  proportional. 
C)  indirect. 
D)  progressive. 
A)  regressive. 
B)  proportional. 
C)  indirect. 
D)  progressive.

Question 5

Suppose a professor announces at the beginning of a course that he will give no failing grades because they are too damaging to self-esteem.How does such a policy affect equality and efficiency?

Accepted Answer

Equality increases, since the spread of

Question 6

In 2009 what percentage of total income in the U.S.was earned by the poorest fifth of all U.S.households?

Accepted Answer

A)  1/5 
B)  1.2% 
C)  2.0% 
D)  3.4% 
A)  1/5 
B)  1.2% 
C)  2.0% 
D)  3.4%

Question 7

Aid to families with dependent children was

Accepted Answer

A)  a close-to-perfect welfare or public assistance program. 
B)  criticized because it provided little incentive for recipients to get jobs. 
C)  contributing to efficient production of goods. 
D)  superior to a negative income tax for work incentives. 
A)  a close-to-perfect welfare or public assistance program. 
B)  criticized because it provided little incentive for recipients to get jobs. 
C)  contributing to efficient production of goods. 
D)  superior to a negative income tax for work incentives.

Question 8

Although economists generally favor a negative income tax, there is little political support for it.

Accepted Answer

A) True 
 B)False

Question 9

Economists favor a negative income tax because they believe

Accepted Answer

A)  that it will create more jobs for economists to monitor the program. 
B)  the current welfare programs have excessively high work incentives, which result in less total work. 
C)  it is more efficient than the existing welfare system because NIT provides better work incentives. 
D)  All of the above are true. 
A)  that it will create more jobs for economists to monitor the program. 
B)  the current welfare programs have excessively high work incentives, which result in less total work. 
C)  it is more efficient than the existing welfare system because NIT provides better work incentives. 
D)  All of the above are true.

Question 10

Which of the following is a source of income inequality?

Accepted Answer

A)  differences in ability 
B)  differences in work intensity 
C)  risk taking 
D)  all of the above 
A)  differences in ability 
B)  differences in work intensity 
C)  risk taking 
D)  all of the above

Question 11

Unequal incomes arise from

Accepted Answer

A)  discrimination. 
B)  luck. 
C)  different schooling. 
D)  all of the above factors. 
A)  discrimination. 
B)  luck. 
C)  different schooling. 
D)  all of the above factors.

Question 12

Susan argues that she is the victim of economic discrimination.The primary technical difficulty for an economist investigating her claim will be

Accepted Answer

A)  defining economic discrimination. 
B)  finding a worker with the same productivity as Susan for comparison purposes. 
C)  defining statistical discrimination. 
D)  measuring Susan's human capital. 
A)  defining economic discrimination. 
B)  finding a worker with the same productivity as Susan for comparison purposes. 
C)  defining statistical discrimination. 
D)  measuring Susan's human capital.

Question 13

Figure 21-1
  
-In Figure 21-1, if the existing antipoverty program were replaced by a negative income tax, most economists believe that it would result in a move like which of the following?

Accepted Answer

A)  C to F 
B)  A to B 
C)  D to E 
D)  G to D 
A)  C to F 
B)  A to B 
C)  D to E 
D)  G to D

Question 14

Suppose that a negative income tax was created that set a minimum income for a family of $5,000 per year and had a marginal tax rate of 33 percent.What is the break-even level of income? If a person earned $5,000, what would the after-tax income level be? If the earnings were $10,000, what would the after-tax income be?

Accepted Answer

The break-even level of income is $15,00

Question 15

Economists might be willing to accept a policy that adversely affected distribution of income if it

Accepted Answer

A)  lessened income disparities. 
B)  diminished labor productivity by a large amount. 
C)  increased productivity by a large amount. 
D)  were favorable to the rich. 
A)  lessened income disparities. 
B)  diminished labor productivity by a large amount. 
C)  increased productivity by a large amount. 
D)  were favorable to the rich.

Question 16

By law, employers in the United States may not ask prospective female employees whether they plan to have babies.The existence of this law seems most likely to

Accepted Answer

A)  increase the probability that firms will practice economic discrimination against women. 
B)  decrease the probability that firms will practice economic discrimination against women. 
C)  increase the probability that firms will practice statistical discrimination against women. 
D)  decrease the probability that firms will practice statistical discrimination against women. 
A)  increase the probability that firms will practice economic discrimination against women. 
B)  decrease the probability that firms will practice economic discrimination against women. 
C)  increase the probability that firms will practice statistical discrimination against women. 
D)  decrease the probability that firms will practice statistical discrimination against women.

Question 17

In the Santa Rita silver mines in Arizona in 1870, Mexican miners received about $12 per month while "American" miners received $70.Although the wages of both groups tended to rise over time, the gap persisted until at least 1910.Mexican and American miners did the same work and were equally productive.Economists call this pay differential

Accepted Answer

A)  prejudicial differentials. 
B)  compensating differentials. 
C)  economic discrimination. 
D)  Lorenz discrimination. 
A)  prejudicial differentials. 
B)  compensating differentials. 
C)  economic discrimination. 
D)  Lorenz discrimination.

Question 18

In 1962, Michael Harrington argued in The Other America that there was chronic, severe poverty in America.

Accepted Answer

A) True 
 B)False

Question 19

In 2009, approximately what income level was the cut-off point for defining a family as "rich"?

Accepted Answer

A)  $72,000 
B)  $100,000 
C)  $143,000 
D)  $195,000 
A)  $72,000 
B)  $100,000 
C)  $143,000 
D)  $195,000

Question 20

Affirmative action laws require employers to search for qualified minority applicants, but not to necessarily give them jobs.

Accepted Answer

A) True 
 B)False

Exam 21: Poverty, Inequality, and Discrimination

The U.S.income tax system is progressive.

An employer who refuses to hire women because of the chance they may quit for childbearing purposes is engaging in statistical discrimination.

Discrimination can come from many groups of people, including employers and fellow employees.

A tax is more likely to promote economic equality if it is

Suppose a professor announces at the beginning of a course that he will give no failing grades because they are too damaging to self-esteem.How does such a policy affect equality and efficiency?

In 2009 what percentage of total income in the U.S.was earned by the poorest fifth of all U.S.households?

Aid to families with dependent children was

Although economists generally favor a negative income tax, there is little political support for it.

Economists favor a negative income tax because they believe

Which of the following is a source of income inequality?

Unequal incomes arise from

Susan argues that she is the victim of economic discrimination.The primary technical difficulty for an economist investigating her claim will be

Figure 21-1 -In Figure 21-1, if the existing antipoverty program were replaced by a negative income tax, most economists believe that it would result in a move like which of the following?

Economists might be willing to accept a policy that adversely affected distribution of income if it

By law, employers in the United States may not ask prospective female employees whether they plan to have babies.The existence of this law seems most likely to

In 1962, Michael Harrington argued in The Other America that there was chronic, severe poverty in America.

In 2009, approximately what income level was the cut-off point for defining a family as "rich"?

Affirmative action laws require employers to search for qualified minority applicants, but not to necessarily give them jobs.

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: The Importance of Marginal Analysis

Securities: Business Finance, and the Economy: The Tail that Wags the Dog?

The Firm and the Industry under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets I: The Price System

The Shortcomings of Free Markets

The Market's Prime Achievement: Innovation and Growth

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: The Human Inputs

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

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