Question 1

A Gini coefficient of zero means that

Accepted Answer

A)   the income is equally distributed.
B)   one person has all the income and everyone else has nothing.
C)   all the income is received by the top 20% of families.
D)   the income is split equally between the top 20% and the rest of the distribution.E) B) and C)
F) A) and B)

Question 2

The official poverty line in the United States was established by the government in the early 1960s.

Accepted Answer

A) True 
 B)False

Question 3

A registered nurse in Tulsa, Oklahoma makes a lower wage than an equally skilled registered nurse in San Francisco. This is an example of a compensating differential.

Accepted Answer

A) True 
 B)False

Question 4

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) A) and C)
F) A) and D)

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) All of the above
F) B) and C)

Question 6

All Pittsburgh police officers must go through the same training program, but police officers assigned to the narcotics squad earn 10% more than police officers assigned to guard the city courthouse. This 10% difference in pay is an example of a

Accepted Answer

A)   human capital differential.
B)   compensating differential.
C)   transfer payment.
D)   utility differential.E) B) and C)
F) All of the above

Question 7

Wages and salaries (including wage supplements)  accounted for ________ of personal income in the United States in 2017.

Accepted Answer

A)   37%
B)   50%
C)   63%
D)   90%E) C) and D)
F) B) and D)

Question 8

Which of the following is an example of a compensating differential?

Accepted Answer

A)   A plastic surgeon must train for five more years than an internist and on average plastic surgeons earn 40% more per year than internists.
B)   A bank hires both men and women who have just graduated from college. The women are assigned positions as bank tellers, and the men are assigned to the management training program.
C)   It takes the same amount and type of training to be either a prison guard or a parole officer. Prison guards earn about 15% more than parole officers with the same amount of experience. About 3% of prison guards, but only 1% of parole officers, are injured on the job each year.
D)   Bill was injured on the job and as a result of his injuries he can no longer work. He now qualifies for $1,000 a month in disability payments.E) B) and C)
F) All of the above

Question 9

A Gini coefficient of 0.1 represents more inequality in income distribution than a Gini coefficient of 0.9.

Accepted Answer

A) True 
 B)False

Question 10

Household income comes from three main sources: wages and salaries, property, and government.

Accepted Answer

A) True 
 B)False

Question 11

A Gini coefficient of 0.25 represents less inequality in income distribution than a Gini coefficient of 0.4.

Accepted Answer

A) True 
 B)False

Question 12

Recall the Economics in Practice on page 372: According to a study discussed in the Economics in Practice, providing data on expected earnings after training and providing biographies on women working in the coding sector ________ the number of women applicants for the coding camp in Peru.

Accepted Answer

A)   reduced
B)   did not change
C)   doubled
D)   resulted in a tenfold increase inE) C) and D)
F) None of the above

Question 13

Lydia was born with an aptitude for composing music. This aptitude is an example of

Accepted Answer

A)   a compensating differential.
B)   human capital.
C)   property.
D)   natural capital.E) All of the above
F) None of the above

Question 14

The idea that a dollar in the hand of a rich person is worth ________ a dollar in the hand of a poor person is a consequence of utilitarian justice.

Accepted Answer

A)   less than
B)   more than
C)   the same as
D)   nothing compared toE) None of the above
F) A) and D)

Question 15

The ________ is a commonly used measure of the degree of inequality in an income distribution.

Accepted Answer

A)   Herfindahl-Hirschman index
B)   Gini coefficient
C)   Lorenz curve
D)   utility possibility frontierE) B) and D)
F) All of the above

Question 16

If the marginal utility of income decreases as income increases, transferring income from the rich to the poor will

Accepted Answer

A)   increase total utility.
B)   decrease total utility.
C)   not change total utility.
D)   increase marginal utility, but not change total utility.E) A) and B)
F) A) and C)

Question 17

The argument most often used against redistribution is that a society as wealthy as the United States should not have a legal obligation to provide all its members with the basic necessities of life.

Accepted Answer

A) True 
 B)False

Question 18

In 2017 about 51% of personal income in the United States came from

Accepted Answer

A)   wages and salaries.
B)   property income.
C)   transfer payments.
D)   profits.E) All of the above
F) None of the above

Question 19

Of the following countries, which has the lowest level of income inequality?

Accepted Answer

A)   Slovenia
B)   Greece
C)   Japan
D)   MexicoE) B) and D)
F) None of the above

Question 20

According to utilitarian justice, the redistribution of income from the rich to the poor causes

Accepted Answer

A)   the rich to sacrifice a lot and the poor to gain a little.
B)   the marginal utility of both the rich and the poor to increase.
C)   the marginal utility of both the rich and the poor to decrease.
D)   an increase in total utility because of the law of decreasing marginal utility.E) C) and D)
F) B) and C)

Exam 18: Income Distribution and Poverty

A registered nurse in Tulsa, Oklahoma makes a lower wage than an equally skilled registered nurse in San Francisco. This is an example of a compensating differential.

Correct AnswerverifiedShow Answer

If the marginal utility of income decreases as income increases, transferring income from the rich to the poor will

Correct AnswerverifiedShow Answer

Household income comes from three main sources: wages and salaries, property, and government.

Correct AnswerverifiedShow Answer

The argument most often used against redistribution is that a society as wealthy as the United States should not have a legal obligation to provide all its members with the basic necessities of life.

Correct AnswerverifiedShow Answer

The idea that a dollar in the hand of a rich person is worth ________ a dollar in the hand of a poor person is a consequence of utilitarian justice.

Correct AnswerverifiedShow Answer

A Gini coefficient of zero means that

Correct AnswerverifiedShow Answer

Recall the Economics in Practice on page 372: According to a study discussed in the Economics in Practice, providing data on expected earnings after training and providing biographies on women working in the coding sector ________ the number of women applicants for the coding camp in Peru.

Correct AnswerverifiedShow Answer

Lydia was born with an aptitude for composing music. This aptitude is an example of

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

Of the following countries, which has the lowest level of income inequality?

Correct AnswerverifiedShow Answer

All Pittsburgh police officers must go through the same training program, but police officers assigned to the narcotics squad earn 10% more than police officers assigned to guard the city courthouse. This 10% difference in pay is an example of a

Correct AnswerverifiedShow Answer

The ________ is a commonly used measure of the degree of inequality in an income distribution.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

According to utilitarian justice, the redistribution of income from the rich to the poor causes

Correct AnswerverifiedShow Answer

The official poverty line in the United States was established by the government in the early 1960s.

Correct AnswerverifiedShow Answer

Wages and salaries (including wage supplements) accounted for ________ of personal income in the United States in 2017.

Correct AnswerverifiedShow Answer

A Gini coefficient of 0.1 represents more inequality in income distribution than a Gini coefficient of 0.9.

Correct AnswerverifiedShow Answer

In 2017 about 51% of personal income in the United States came from

Correct AnswerverifiedShow Answer

A Gini coefficient of 0.25 represents less inequality in income distribution than a Gini coefficient of 0.4.

Correct AnswerverifiedShow Answer

Which of the following is an example of a compensating differential?

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