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23-101
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Test Bank: II
Topic:
Income Inequality over Time
217.
The so-called 90-10 ratio (the hourly wage at the 90th percentile compared to that at the
10th percentile) was roughly how much in 2007?
218.
Distribution of Income in the United States
Percentage of Households
1970
2008
Lowest 20%
4.1
3.4
Second 20%
10.8
8.6
Third 20%
17.4
14.7
Fourth 20%
24.5
23.3
Highest 20%
43.3
50.0
Refer to the income distribution data in the table. Which of the following statements is correct?
23-102
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Test Bank: II
Topic:
Income Inequality over Time
219.
Distribution of Income in the United States
Percentage of Households
1970
2008
Lowest 20%
4.1
3.4
Second 20%
10.8
8.6
Third 20%
17.4
14.7
Fourth 20%
24.5
23.3
Highest 20%
43.3
50.0
Which statement best describes the data in the table?
220.
Distribution of Income in the United States
Percentage of Households
1970
2008
Lowest 20%
4.1
3.4
Second 20%
10.8
8.6
Third 20%
17.4
14.7
Fourth 20%
24.5
23.3
Highest 20%
43.3
50.0
An examination of the quintile distribution of before-tax household income data for 1970 and
2008 given in the table suggests a trend of
221.
Which of the following would be evidence of an increase in income inequality over time in
the United States?
222.
Some economists prefer to look at the distribution of consumption rather than that of income.
A Review of Economic Studies article in 2006 reported that
consumption inequality in the U.S.
is
23-104
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Accessibility: Keyboard Navigation
Blooms: Understand
Diffi culty:
02 Medium
Learning Objective: 23-03 Demonstrate how income inequality has changed since 1975.
Test Bank: II
Topic:
Income Inequality over Time
223.
"Redistributing income in order to have a more equal distribution in the United States would
result in a higher level of total consumer satisfaction." This statement is
based on the concept
that
224.
Suppose Rita obtains 10 units of utility from the last dollar of income received by her, and
Joseph obtains 6 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
225.
The necessity to maintain incentives to work and incentives to produce output would be a
point made by an individual making the case for
226.
The equality-efficiency trade-off would be most closely associated with which one of the
following statements?
227.
The debate over income distribution focuses on the trade-off between
23-106
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
A c c es s ib i li t y: Keyboard Navigation
Blooms: Analyze
Di f f ic ul t y:
03 Hard
Learning Objective: 23-04 Debate the economic arguments for and against income
inequality.
Test Bank: II
Topic: Equality versus Efficiency
228.
Greater income equality that is achieved through the redistribution of income is thought to
229.
A reduction in the redistribution of income
230.
The pizza analogy of income distribution would be most closely associated with which one
of the following questions?
23-107
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
this?
B. If cutting a pizza in more equal slices shrinks the pizza, how much shrinkage will society
tolerate?
C.
If pizza workers were paid more money, would they become more productive workers for
society?
D.
If pizza sales increase, would pizza companies redistribute the profits to their employees?
231.
In the pizza analogy for income distribution, the pizza would shrink because
232.
Poverty is a condition where a person or family does not have the means to
23-108
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
gender, ethnicity, and other characteristics.
Test Bank: II
Topic:
The Economics of Poverty
233.
In 2014, an unattached individual would be defined as living in poverty if his or her income
was less than
234.
In 2014, the poverty line for a family of four was about
235.
The following groups in the U.S. all had higher-than-the-national-average poverty rates in
2014, except
23-109
236.
In 2014, the percentage of the total U.S. population that lived in poverty was approximately
237.
Of the following groups, which had the highest incidence of poverty in 2014?
238.
The percentage of the U.S. population living in poverty during the 2000 to 2014 period
23-110
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
A. decreased slightly.
B. increased.
C.
remained relatively constant.
D.
decreased sharply.
239.
In the U.S., the percentage of total population living in poverty fell significantly during
which of the following periods?
240.
One main complaint about the official income thresholds used in defining poverty is that
they
23-111
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
gender, ethnicity, and other characteristics.
Test Bank: II
Topic:
The Economics of Poverty
241.
Which of the following is not a major complaint about the official income data used in
measuring poverty?
242.
Entitlement programs include
243.
Social insurance programs partially replace income that has been lost due to the following,
except
23-112
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
D. resignation from a job.
244.
Which of the following statements applies to the Social Security program?
245.
Government programs that pay benefits to those who are unable to earn income because of
permanent disabilities or to those who have very low incomes and
dependent children are called
246.
Government programs, such as Social Security, food stamps, AFDC, SSI, Medicare, and
Medicaid, that guarantee particular levels of transfer payments to all who
fit the programs'
criteria are called
247.
Social Security payments are primarily made to assist
248.
The eligibility basis for the Supplemental Nutrition Assistance Program (or SNAP, formerly
called the food-stamp program) is
23-114
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Accessibility: Keyboard Navigation
Blooms: Remember
Di ff ic u lty : 01 Easy
Learning Objective: 23-06 Identify the major components of the income-maintenance
program in the United States.
Test Bank: II
Topic:
The U.S. Income-Maintenance System
249.
The former food-stamp program is now the Supplemental Nutrition Assistance Program
(SNAP) and eligible households now receive
250.
The unemployment compensation social insurance program is a
251.
Which of the following is not a basic difference between Medicare and Medicaid?
23-115
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written consent of McGraw-Hill Education.
B. Medicare is a federal program, while Medicaid is a state-government program.
C.
Medicare is mostly based on age, while Medicaid is mostly based on income.
D.
Medicare is a social insurance program, while Medicaid is a public assistance program.
252.
Social insurance is distinguished from public assistance, or welfare, by the fact that
253.
Which of the following statements is correct?
23-116
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Blooms: Remember
Di ff ic u lty : 01 Easy
Learning Objective: 23-06 Identify the major components of the income-maintenance
program in the United States.
Test Bank: II
Topic: The U.S. Income-Maintenance System
254.
The earned-income tax credit (EITC) is, in essence,
255.
Which is a payment or wage subsidy made by the Federal government to offset Social
Security taxes for low-income workers?
256.
A major criticism of the welfare system that led to reforms in the mid-1990s is that welfare
payments
23-117
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written consent of McGraw-Hill Education.
B. create dependency on government programs.
C.
give strong incentives for people to change jobs.
D.
fail to provide a minimum income for young children.
257.
Which of the following statements about the Temporary Assistance for Needy Families
(TANF) program is not true?
258.
The Temporary Assistance for Needy Families (TANF) program
23-118
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Blooms: Remember
Di ff ic u lty : 01 Easy
Learning Objective: 23-06 Identify the major components of the income-maintenance
program in the United States.
Test Bank: II
Topic:
The U.S. Income-Maintenance System
259.
One of the provisions of the Temporary Assistance for Needy Families (TANF) program
was to
260.
A so-called welfare cliff occurs when
261.
The effect of the so-called welfare cliff is that it discourages welfare recipients from doing
the following, except
262.
The taste-for-discrimination model examines an employer's prejudice and discrimination in
hiring by using tools of
263.
Suppose that a prejudiced white employer is willing to hire white workers at a rate of
$16/hour, and this employer has a discrimination coefficient of $4. This
implies that the
employer would
