Question 1

Once the national health care program goes into effect,we can expect

Accepted Answer

A) total expenditures on health care will decrease. 
B) more individuals will have more incentives to make decisions that promote better health. 
C) total expenditures on health care will increase. 
D) moral hazard will decrease. 
A) total expenditures on health care will decrease. 
B) more individuals will have more incentives to make decisions that promote better health. 
C) total expenditures on health care will increase. 
D) moral hazard will decrease. C

Question 2

As a result of moral hazard,

Accepted Answer

A) both physicians and hospitals order more procedures. 
B) physicians and hospital administrators have no incentive to raise costs. 
C) patients increasingly have to worry about the expense of operations and other medical procedures. 
D) both physicians and hospitals have a financial interest in trying to keep hospital costs down. 
A) both physicians and hospitals order more procedures. 
B) physicians and hospital administrators have no incentive to raise costs. 
C) patients increasingly have to worry about the expense of operations and other medical procedures. 
D) both physicians and hospitals have a financial interest in trying to keep hospital costs down. A

Question 3

Much of a person's increased productivity can be linked to

Accepted Answer

A) on-the-job training. 
B) the prevalent marginal tax rate. 
C) the price elasticity of demand for the product. 
D) the income elasticity of demand for the product. 
A) on-the-job training. 
B) the prevalent marginal tax rate. 
C) the price elasticity of demand for the product. 
D) the income elasticity of demand for the product. A

Question 4

Some economists argue that the official poverty figures overstate poverty in this country.Why?

Accepted Answer

Official poverty figures do not include

Question 5

How does the distribution of wealth differ from the distribution of income in the United States?

Accepted Answer

As conventionally measured,the distribut

Question 6

Since 1929,the distribution of money income in the United States has

Accepted Answer

A) become slightly more unequal. 
B) not dramatically changed. 
C) become more equal. 
D) shifted toward the poorer 20 percent away from the richer 20 percent. 
A) become slightly more unequal. 
B) not dramatically changed. 
C) become more equal. 
D) shifted toward the poorer 20 percent away from the richer 20 percent.

Question 7

The purpose of the Temporary Assistance to Needy Families program is

Accepted Answer

A) to provide rebates of Social Security taxes to low-income workers. 
B) to provide cash assistance and supportive services to assist the family,helping them achieve economic self-sufficiency. 
C) to provide a minimum income for the aged,blind,and the disabled. 
D) to supplement Social Security for the elderly with medical problems. 
A) to provide rebates of Social Security taxes to low-income workers. 
B) to provide cash assistance and supportive services to assist the family,helping them achieve economic self-sufficiency. 
C) to provide a minimum income for the aged,blind,and the disabled. 
D) to supplement Social Security for the elderly with medical problems.

Question 8

All of the following are social insurance programs designed to attack poverty EXCEPT

Accepted Answer

A) Social Security. 
B) temporary assistance to needy families. 
C) food stamps. 
D) tuition assistance. 
A) Social Security. 
B) temporary assistance to needy families. 
C) food stamps. 
D) tuition assistance.

Question 9

Which of the following is NOT considered a determinant of income differences?

Accepted Answer

A) productivity 
B) age 
C) discrimination 
D) equity or fairness 
A) productivity 
B) age 
C) discrimination 
D) equity or fairness

Question 10

The Social Security system is financed by

Accepted Answer

A) a tax on individual retirement accounts. 
B) a payroll tax paid only by employers. 
C) a payroll tax paid by both employers and employees. 
D) a tax on luxury goods. 
A) a tax on individual retirement accounts. 
B) a payroll tax paid only by employers. 
C) a payroll tax paid by both employers and employees. 
D) a tax on luxury goods.

Question 11

A Lorenz curve that represents an unequal income distribution is

Accepted Answer

A) a straight line starting at the origin. 
B) a straight line starting at 100% 
C) a bowed curved. 
D) a line that has a kink in the middle of it. 
A) a straight line starting at the origin. 
B) a straight line starting at 100% 
C) a bowed curved. 
D) a line that has a kink in the middle of it.

Question 12

Compare and contrast the two normative standards to income distribution discussed in the text: The productivity standard and the egalitarian principle.

Accepted Answer

The productivity standard is also called

Question 13

Investment in human capital

Accepted Answer

A) is quite different from and has a much lower return than investment in physical capital. 
B) is just like investment in physical capital and has a return similar to that earned from other investments. 
C) is just like investment in physical capital but has a much greater return than do other investments. 
D) is not comparable to other investments in any way since human capital is embodied in the person. 
A) is quite different from and has a much lower return than investment in physical capital. 
B) is just like investment in physical capital and has a return similar to that earned from other investments. 
C) is just like investment in physical capital but has a much greater return than do other investments. 
D) is not comparable to other investments in any way since human capital is embodied in the person.

Question 14

The idea that the Lorenz curve should be along the 45 degree line is consistent with

Accepted Answer

A) the productivity standard. 
B) the egalitarian principle. 
C) the conservative principle. 
D) none of the above. 
A) the productivity standard. 
B) the egalitarian principle. 
C) the conservative principle. 
D) none of the above.

Question 15

All of the following are income in kind EXCEPT

Accepted Answer

A) income received from family members. 
B) services produced in the home. 
C) government provided food stamps. 
D) government provided medical aid. 
A) income received from family members. 
B) services produced in the home. 
C) government provided food stamps. 
D) government provided medical aid.

Question 16

Income in the form of goods and services is

Accepted Answer

A) known as money income. 
B) known as income in kind. 
C) not considered income by economists. 
D) not part of wealth. 
A) known as money income. 
B) known as income in kind. 
C) not considered income by economists. 
D) not part of wealth.

Question 17

A benefit of deductibles and health savings accounts is that they

Accepted Answer

A) reduce the moral hazard problem associated with third-party payers. 
B) increase the quality of health care. 
C) reduce the use of expensive techniques for hopeless cases. 
D) reduce the incomes of physicians. 
A) reduce the moral hazard problem associated with third-party payers. 
B) increase the quality of health care. 
C) reduce the use of expensive techniques for hopeless cases. 
D) reduce the incomes of physicians.

Question 18

Which of the following is NOT a correct criticism of the Lorenz curve?

Accepted Answer

A) It does not include payments in kind. 
B) It does not deal with differences in family size. 
C) It ignores the impact of age distribution on income distribution. 
D) It refers to money income after taxes. 
A) It does not include payments in kind. 
B) It does not deal with differences in family size. 
C) It ignores the impact of age distribution on income distribution. 
D) It refers to money income after taxes.

Question 19

In general,as individuals undertake additional years of schooling,

Accepted Answer

A) their stock of human capital increases. 
B) the marginal productivity of individuals as workers declines. 
C) the marginal benefit to society of the extra years of education increases. 
D) the marginal productivity of individuals as workers becomes negative. 
A) their stock of human capital increases. 
B) the marginal productivity of individuals as workers declines. 
C) the marginal benefit to society of the extra years of education increases. 
D) the marginal productivity of individuals as workers becomes negative.

Question 20

$$\begin{array} { l c } 
\text { Name(s) } & \text { Income/Person } \
\hline \text { Al, Bert } & \$ 3,000 \
\text { David, Jamal } & \$ 2,000 \
\text { Eve, Eric, Lucy, Cecil } & \$ 1,500 \
\text { Fran, George } & \$ 1,000\\hline
\end{array}$$
-Use the above table.What percentage of income is received by the poorest 60% of the population?

Accepted Answer

A) 27.78 percent 
B) 33.33 percent 
C) 44.44 percent 
D) 55.56 percent 
A) 27.78 percent 
B) 33.33 percent 
C) 44.44 percent 
D) 55.56 percent

Exam 17: Income, poverty, and Health Care

Once the national health care program goes into effect,we can expect

As a result of moral hazard,

Much of a person's increased productivity can be linked to

Some economists argue that the official poverty figures overstate poverty in this country.Why?

How does the distribution of wealth differ from the distribution of income in the United States?

Since 1929,the distribution of money income in the United States has

The purpose of the Temporary Assistance to Needy Families program is

All of the following are social insurance programs designed to attack poverty EXCEPT

Which of the following is NOT considered a determinant of income differences?

The Social Security system is financed by

A Lorenz curve that represents an unequal income distribution is

Compare and contrast the two normative standards to income distribution discussed in the text: The productivity standard and the egalitarian principle.

Investment in human capital

The idea that the Lorenz curve should be along the 45 degree line is consistent with

All of the following are income in kind EXCEPT

Income in the form of goods and services is

A benefit of deductibles and health savings accounts is that they

Which of the following is NOT a correct criticism of the Lorenz curve?

In general,as individuals undertake additional years of schooling,

Name(s) Income/Person Al, Bert \ 3,000 David, Jamal \ 2,000 Eve, Eric, Lucy, Cecil \ 1,500 Fran, George \ 1,000 -Use the above table.What percentage of income is received by the poorest 60% of the population?

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

Demand and Supply Elasticity

Consumer Choice

Rents, profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, supply and Outsourcing

Unions and Labor Market Monopoly Power

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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