Question 1

The Gini ratio of income inequality ranges between:

Accepted Answer

A)   0 and 10,000.
B)   1 and 10.
C)  -1 and +1.
D)   0 and 1.E) A) and B)
F) B) and C)

Question 2

The equality-efficiency trade-off suggests that:

Accepted Answer

A)   welfare programs stimulate incentives to work.
B)   inefficiencies result when incentives to produce are reduced.
C)   noncash transfers are superior to cash transfers.
D)   economic growth is the best means of reducing poverty.E) B) and C)
F) All of the above

Question 3

The highest quintile of households in the income distribution:

Accepted Answer

A)   receives about 51 percent of the total income.
B)   is comprised of 10 percent of all households.
C)   is comprised of 5 percent of all households.
D)   receives about 43 percent of the total income.E) None of the above
F) B) and C)

Question 4

The top 20 percent of U.S.income earners receive nearly 80 percent of total U.S.income.

Accepted Answer

A) True 
 B)False

Question 5

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) B) and D)
F) A) and B)

Question 6

Which of the following demographic groups does not bear a disproportionate burden of poverty?

Accepted Answer

A)   Households headed by women.
B)   Persons 65 or over.
C)   Hispanics.
D)   Children under 18.E) C) and D)
F) A) and B) B

Question 7

An implication of the taste-for-discrimination model is that:

Accepted Answer

A)   discrimination can lower a firm's production costs.
B)   discrimination will move a firm along its declining average total cost curve.
C)   other things equal,nondiscriminating firms will have lower production costs than discriminating firms.
D)   other things equal,discriminating firms will have lower production costs than nondiscriminating firms.E) A) and C)
F) B) and C) C

Question 8

The entrance of large numbers of "baby boomers" into the labor force in the 1970s and 1980s:

Accepted Answer

A)   caused substantial reductions in permanent unemployment.
B)   lessened income inequality.
C)   increased income inequality.
D)   had no impact on income inequality.E) B) and D)
F) B) and C)

Question 9

Which of the following Gini ratios indicates the lowest degree of income inequality?

Accepted Answer

A)   0.71.
B)   0.55.
C)   0.31.
D)   0.45.E) B) and C)
F) None of the above

Question 10

The basic argument for income inequality is that:

Accepted Answer

A)   the very rich establish consumption patterns that are desirable for the rest of society to emulate.
B)   the rich buy luxury goods that soon become affordable to everyone else because of economies of scale.
C)   income inequality is essential to maintain incentives to produce.
D)   inequality undermines incentives and tends to reduce the size of the national income.E) A) and B)
F) A) and C)

Question 11

In 2011,the official poverty line for a household of four in the United States was:

Accepted Answer

A)   $22,891.
B)   $29,494.
C)   $11,702.
D)   $26,803.E) A) and B)
F) B) and C)

Question 12

Which is correct?

Accepted Answer

A)   Wealth is less equally distributed than income and therefore increases income inequality.
B)   Wealth is more equally distributed than income and therefore increases income inequality.
C)   Wealth is less equally distributed than income and therefore decreases income inequality.
D)   Wealth is more equally distributed than income and therefore decreases income inequality.E) A) and C)
F) A) and B)

Question 13

Which of the following employers is the most prejudiced? Employer:

Accepted Answer

A)   A,whose d is $0.
B)   B,whose d is $2.
C)   C,whose d is $4.
D)   D,whose d is $6.E) A) and B)
F) A) and C)

Question 14

Statistical discrimination refers to:

Accepted Answer

A)   the crowding of women or minorities into low-paying occupations.
B)   significant differences in average levels of earnings by gender,race,and ethnicity,after accounting for nondiscriminatory factors.
C)   making individual hiring decisions on the basis of the characteristics of the group to which a person belongs,rather than on his or her personal characteristics and productivity.
D)   the 50-percent unexplained residual in studies that try to account for wage differences by gender,race,and ethnic origin.E) All of the above
F) A) and C)

Question 15

Answer the question on the basis of the following information.Suppose the members of population A,consisting of Al,Bob,Curt,Doris,and Ellie,receive annual incomes of $5,000,$2,500,$1,250,$750,and $500,respectively. Refer to the given information.What percentage of total income is received by the lowest 60 percent of the income receivers in population A?

Accepted Answer

A)   60.
B)   50.
C)   25.
D)   20.E) A) and B)
F) C) and D) C

Question 16

Which of the following helps finance the medical expenses of individuals receiving TANF or SSI?

Accepted Answer

A)   Medicare.
B)   Supplemental Security Income (SSI) .
C)   Medicaid.
D)   Social Security.E) B) and C)
F) All of the above

Question 17

An employer (biased against African Americans)whose discrimination coefficient is $5 will hire only whites if the actual African-American-white wage gap is $7.

Accepted Answer

A) True 
 B)False

Question 18

The crowding model is primarily concerned with explaining:

Accepted Answer

A)   occupational discrimination.
B)   human-capital discrimination.
C)   the size of the discrimination coefficient.
D)   why affirmative action is reverse discrimination.E) A) and C)
F) A) and D)

Question 19

Suppose Gigantic Health Cooperative doesn't hire Mandy Morrison solely because she is a graduate of a particular foreign medical school,which is not known for the high quality of its graduates.Yet,Mandy is actually more qualified than the average graduate of American medical schools.This is an example of:

Accepted Answer

A)   monopsony exploitation.
B)   human-capital discrimination.
C)   statistical discrimination.
D)   irrational behavior.E) A) and D)
F) B) and C)

Question 20

In the taste-for-discrimination model:

Accepted Answer

A)   a decline in discrimination will reduce the actual African-American-white wage ratio.
B)   an increase in collective discrimination coefficients of employers will reduce the demand for African-American workers,decrease the African-American wage,and increase African-American employment.
C)   firms that discriminate will have lower costs than firms that do not discriminate.
D)   competitive forces will tend to reduce discrimination in the very long run.E) A) and B)
F) A) and D)

Exam 22: Income Inequality Poverty and Discrimination

The Gini ratio of income inequality ranges between:

Correct Answer
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The equality-efficiency trade-off suggests that:

Correct Answer
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The highest quintile of households in the income distribution:

Correct Answer
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The top 20 percent of U.S.income earners receive nearly 80 percent of total U.S.income.

Correct Answer
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The poverty rate for African Americans is:

Correct Answer
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Which of the following demographic groups does not bear a disproportionate burden of poverty?

Correct Answer
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B

An implication of the taste-for-discrimination model is that:

Correct Answer
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C

The entrance of large numbers of "baby boomers" into the labor force in the 1970s and 1980s:

Correct Answer
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Which of the following Gini ratios indicates the lowest degree of income inequality?

Correct Answer
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The basic argument for income inequality is that:

Correct Answer
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In 2011,the official poverty line for a household of four in the United States was:

Correct Answer
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Which is correct?

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Which of the following employers is the most prejudiced? Employer:

Correct Answer
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Statistical discrimination refers to:

Correct Answer
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C

Which of the following helps finance the medical expenses of individuals receiving TANF or SSI?

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An employer (biased against African Americans)whose discrimination coefficient is $5 will hire only whites if the actual African-American-white wage gap is $7.

Correct Answer
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The crowding model is primarily concerned with explaining:

Correct Answer
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In the taste-for-discrimination model:

Correct Answer
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Exam 22: Income Inequality Poverty and Discrimination

The Gini ratio of income inequality ranges between:

Correct AnswerverifiedShow Answer

The equality-efficiency trade-off suggests that:

Correct AnswerverifiedShow Answer

The highest quintile of households in the income distribution:

Correct AnswerverifiedShow Answer

The top 20 percent of U.S.income earners receive nearly 80 percent of total U.S.income.

Correct AnswerverifiedShow Answer

The poverty rate for African Americans is:

Correct AnswerverifiedShow Answer

Which of the following demographic groups does not bear a disproportionate burden of poverty?

Correct AnswerverifiedB

An implication of the taste-for-discrimination model is that:

Correct AnswerverifiedC

The entrance of large numbers of "baby boomers" into the labor force in the 1970s and 1980s:

Correct AnswerverifiedShow Answer

Which of the following Gini ratios indicates the lowest degree of income inequality?

Correct AnswerverifiedShow Answer

The basic argument for income inequality is that:

Correct AnswerverifiedShow Answer

In 2011,the official poverty line for a household of four in the United States was:

Correct AnswerverifiedShow Answer

Which is correct?

Correct AnswerverifiedShow Answer

Which of the following employers is the most prejudiced? Employer:

Correct AnswerverifiedShow Answer

Statistical discrimination refers to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedC

Which of the following helps finance the medical expenses of individuals receiving TANF or SSI?

Correct AnswerverifiedShow Answer

An employer (biased against African Americans)whose discrimination coefficient is $5 will hire only whites if the actual African-American-white wage gap is $7.

Correct AnswerverifiedShow Answer

The crowding model is primarily concerned with explaining:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In the taste-for-discrimination model:

Correct AnswerverifiedShow Answer

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B

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C

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C

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