Question 1

In statistical discrimination,

Accepted Answer

A)  the average characteristics of the group are applied to individual members.
B)  the characteristics of individual members of a group are applied to describe the group as a whole.
C)  hiring characteristics for workers are based on set government requirements
D)  workers are given preferential treatment if they help fulfill a quota for a particular type of characteristic.

Question 2

The Lorenz curve is a graph that relates income to household spending.

Accepted Answer

A) True 
 B)False

Question 3

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. What percentage of total income is received by the highest 60 percent of the income receivers in population A?

Accepted Answer

A)  87.5
B)  60
C)  25
D)  76.5

Question 4

Suppose Rita obtains 16 units of utility from the last dollar of income received by her, and Joseph obtains 12 units of utility from the last dollar of his income. Assume both Joseph and Rita have the same capacity to derive utility from income. Those who favor an equal distribution of income would

Accepted Answer

A)  advocate redistributing income from Joseph to Rita.
B)  advocate redistributing income from Rita to Joseph.
C)  be content with this distribution of income between Rita and Joseph.
D)  argue that any redistribution of income between them would increase total utility.

Question 5

If a law firm prefers to hire men over women because the firm has found men to be more productive, on average, then the firm is practicing

Accepted Answer

A)  wage discrimination.
B)  reverse discrimination.
C)  statistical discrimination.
D)  human-capital discrimination.

Question 6

Which of the following would likely reduce income inequality?

Accepted Answer

A)  a reduction in the number of high school dropouts
B)  a reduction in Social Security benefits
C)  greater inequality in the distribution of wealth
D)  more stringent requirements to obtain occupational licenses

Question 7

From the economic point of view, discrimination

Accepted Answer

A)  no longer exists in the U.S. economy.
B)  results in an actual domestic output that is below potential domestic output.
C)  provides incentives for minority groups to work harder at their jobs.
D)  results in an actual output that is no different from potential domestic output, provided resources are fully employed.

Question 8

In the United States since 1980, the poor have gotten poorer and the rich have gotten richer in both relative and absolute terms.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following terms describes a system of subsidized health insurance available to the aged?

Accepted Answer

A)  Medicare
B)  Supplemental Security Income (SSI) 
C)  Medicaid
D)  TANF

Question 10

The greater the degree of inequality in the distribution of income, the more bowed will be the Lorenz curve toward the

Accepted Answer

A)  upper left-hand corner.
B)  upper right-hand corner.
C)  lower right-hand corner.
D)  lower left-hand corner.

Question 11

Proponents of a Universal Basic Income (UBI) argue that it would

Accepted Answer

A)  reduce incentives to work.
B)  eliminate business cycles.
C)  guarantee income equality.
D)  reduce government administration costs associated with the current array of government programs.

Question 12

In the U.S., the top 20 percent of households received a little more than 50 percent of total pretax income in 2017.

Accepted Answer

A) True 
 B)False

Question 13

Discrimination creates a

Accepted Answer

A)  redistribution of a larger domestic output.
B)  larger domestic output but no redistribution.
C)  smaller domestic output but no redistribution.
D)  redistribution of a smaller domestic output.

Question 14

An examination of the quintile distribution of before-tax household income data for 1980 and 2015 given in the table suggests a trend of

Accepted Answer

A)  greater equality in the distribution of income over the period.
B)  greater inequality in the distribution of income over the period.
C)  rising income levels for the upper-income groups.
D)  falling income levels for the lower-income groups.

Question 15

Refer to the diagrams, which show identical marginal utility from income curves for Singer and Catalano. If a given income of $20,000 is initially distributed so that Singer receives $15,000 and Catalano $5,000,

Accepted Answer

A)  no judgment can be made as to the effect of a redistribution of income on total utility.
B)  this initial distribution of income is maximizing the combined total utility of the two consumers.
C)  the combined total utility of the two consumers can be increased by redistributing income from Catalano to Singer.
D)  the combined total utility of the two consumers can be increased by redistributing income from Singer to Catalano.

Question 16

Statistical discrimination is also known as occupational discrimination.

Accepted Answer

A) True 
 B)False

Question 17

Refer to the figure, which shows four different Lorenz curves (I, II, III, and IV) . Which point would indicate that the top 40 percent of households earned 60 percent of the nation's total income?

Accepted Answer

A)  a
B)  b
C)  d
D)  e

Question 18

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. What percentage of total income is received by the lowest 60 percent of the income receivers in population A?

Accepted Answer

A)  25
B)  60
C)  50
D)  20

Question 19

The crowding of women and minorities into a restricted number of occupations

Accepted Answer

A)  has no effect on the size of the domestic output or its distribution in the long run.
B)  will increase the size of the domestic output and make its distribution more equal.
C)  will decrease the size of the domestic output and make its distribution less equal.
D)  will increase the size of the domestic output but make its distribution less equal.

Question 20

Eligibility for social insurance programs is largely on the basis of need and "means tests."

Accepted Answer

A) True 
 B)False

Exam 23: Income Inequality, Poverty, and Discrimination

Statistical discrimination is also known as occupational discrimination.

Correct AnswerverifiedShow Answer

Refer to the diagrams, which show identical marginal utility from income curves for Singer and Catalano. If a given income of $20,000 is initially distributed so that Singer receives $15,000 and Catalano $5,000,

Correct AnswerverifiedShow Answer

Refer to the figure, which shows four different Lorenz curves (I, II, III, and IV) . Which point would indicate that the top 40 percent of households earned 60 percent of the nation's total income?

Correct AnswerverifiedShow Answer

The Lorenz curve is a graph that relates income to household spending.

Correct AnswerverifiedShow Answer

In statistical discrimination,

Correct AnswerverifiedShow Answer

The greater the degree of inequality in the distribution of income, the more bowed will be the Lorenz curve toward the

Correct AnswerverifiedShow Answer

In the United States since 1980, the poor have gotten poorer and the rich have gotten richer in both relative and absolute terms.

Correct AnswerverifiedShow Answer

Which of the following would likely reduce income inequality?

Correct AnswerverifiedShow Answer

Proponents of a Universal Basic Income (UBI) argue that it would

Correct AnswerverifiedShow Answer

Suppose Rita obtains 16 units of utility from the last dollar of income received by her, and Joseph obtains 12 units of utility from the last dollar of his income. Assume both Joseph and Rita have the same capacity to derive utility from income. Those who favor an equal distribution of income would

Correct AnswerverifiedShow Answer

An examination of the quintile distribution of before-tax household income data for 1980 and 2015 given in the table suggests a trend of

Correct AnswerverifiedShow Answer

The crowding of women and minorities into a restricted number of occupations

Correct AnswerverifiedShow Answer

Eligibility for social insurance programs is largely on the basis of need and "means tests."

Correct AnswerverifiedShow Answer

In the U.S., the top 20 percent of households received a little more than 50 percent of total pretax income in 2017.

Correct AnswerverifiedShow Answer

Which of the following terms describes a system of subsidized health insurance available to the aged?

Correct AnswerverifiedShow Answer

Discrimination creates a

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From the economic point of view, discrimination

Correct AnswerverifiedShow Answer

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. What percentage of total income is received by the highest 60 percent of the income receivers in population A?

Correct AnswerverifiedShow Answer

If a law firm prefers to hire men over women because the firm has found men to be more productive, on average, then the firm is practicing

Correct AnswerverifiedShow Answer

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. What percentage of total income is received by the lowest 60 percent of the income receivers in population A?

Correct AnswerverifiedShow Answer

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