23-120
Diffic ulty: 02 Medium
264.
Suppose that a prejudiced African-American employer has a discrimination coefficient of
$5/hour. Suppose also that the market wage rate is $20/hour for African–
American workers,
and $18/hour for Hispanic workers. In this case, the employer will
265.
Suppose that white workers are getting paid $21/hour, while similarly productive African-
American workers are getting paid $18/hour. A prejudiced white
employer with a
discrimination coefficient of $24/hour will
266.
Assume that there is a supply and demand market for nonpreferred workers. If prejudice
against these workers among employers increases, then there will be a(n)
267.
Assume that there is a supply and demand market for nonpreferred workers. If prejudice
against these workers among employers decreases, then there will be a(n)
268.
In the taste for discrimination model, the perceived cost for a prejudiced white employer for
hiring an African-American worker is
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written consent of McGraw-Hill Education.
B.
the ratio of the wages of white workers to African-American workers.
C. the wages of African-American workers plus the monetary value of the disutility from hiring
an African-American worker.
D. the wages of a white worker plus the monetary value of the disutility from hiring an African-
American worker.
269.
If a prejudiced white employer behaves as if there is a disutility from hiring an African–
American worker, then this disutility is measured by the
270.
In a supply and demand model of the labor market for nonpreferred workers, a reduction in
employer prejudice against nonpreferred workers will
23-123
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written consent of McGraw-Hill Education.
Learning Objective: 23–07 Discuss labor market discrimination and how it might affect
hiring decisions and wages.
Test Bank: II
Topic:
Economic Analysis of Discrimination
271.
Suppose the market wage rate for whites is $18 an hour and the monetary value a prejudiced
employer attaches to the disutility of hiring African Americans is $3.
This employer will be
indifferent between hiring African Americans and whites only when the African-American wage
rate is
272.
When the occupational choices of women or minorities are restricted, this results in
273.
Ending discrimination against minority groups in educational processes and in employment
situations would cause total domestic output to
23-124
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written consent of McGraw-Hill Education.
B.
rise because spending on consumer goods and services would decrease.
C. rise because of an increase in the productivity of the labor force.
D. fall, since trained minority workers would force some present workers out of their jobs.
274.
From the economic point of view, discrimination
275.
The judging of an individual on the basis of the average characteristics of the group to which
the individual belongs rather than the individual’s characteristics is
23-125
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written consent of McGraw-Hill Education.
Test Bank: II
Topic:
Economic Analysis of Discrimination
276.
In statistical discrimination,
277.
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
278.
The crowding model of occupational discrimination suggests that occupational segregation
results in
23-126
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written consent of McGraw-Hill Education.
D.
a higher rate of inflation than would otherwise be the case.
279.
The crowding of women, African Americans, and certain ethnic groups into less-desirable,
lower-paying occupations is
280.
The crowding of certain ethnic or racial groups into specific occupations results in
281.
The difference between household assets and liabilities is referred to as
282.
Another term often used to refer to family wealth is
283.
From 1995 to 2007 in the U.S., the median and average family wealth adjusted for inflation
both
23-128
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written consent of McGraw-Hill Education.
Topic:
Income Inequality over Time
284.
The Great Recession of 2007–2009 caused U.S. family wealth to shrink, mostly due to the
sharp decline in
285.
Being “underwater” in one’s home mortgage means that the market value of one’s house has
fallen below
286.
In 2010, the top 1 percent of households in the U.S. owned about what percentage of total
wealth in the nation?
23-129
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written consent of McGraw-Hill Education.
Blooms: Understand
Diffic ul ty: 02 Medium
Learning Objective: 23–03 Demonstrate how income inequality has changed since 1975.
Test Bank: II
Topic: Income Inequality over Time
True / False Questions
287.
About a quarter of all U.S. households had personal incomes of $100,000 or more in 2014.
288.
In the U.S., the top 20 percent of households received a little more than 50 percent of total
pretax income in 2014.
289.
The Lorenz curve is a graph that relates income to household spending.
23-130
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written consent of McGraw-Hill Education.
measured and described.
Test Bank: II
Topic: Facts about Income Inequality
290.
The Gini coefficient or ratio is a summary measure of income inequality derived from the
Lorenz curve.
291.
The distribution of household income in the United States becomes more unequal after taxes
and transfer payments are taken into account.
292.
In the U.S. in 2010, the top 1 percent of households held 35 percent of total wealth, leaving
65 percent of wealth to the remaining 99 percent of households.
23-131
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written consent of McGraw-Hill Education.
Topic:
Facts about Income Inequality
293.
Differences in skills or ability are one major reason for income differences in the United
States.
294.
The unequal distribution of wealth among households in the United States is one of the
causes of income inequality.
295.
During the past 35 years or so, the degree of income inequality in the United States has
decreased considerably.
296.
If income inequality is increasing, it means that the income levels of the poor are falling
while the income levels of the rich are rising.
23-132
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written consent of McGraw-Hill Education.
FALSE
297.
One basic argument for redistributing income to achieve more equality rests on the idea of
maximizing the society‘s total utility when there is diminishing marginal
utility from income.
298.
The basic reason why the debate between income equality versus inequality is ongoing is
because there is a trade-off between income equality and economic
efficiency.
299.
U.S. income statistics indicate that more than one-eighth of the nation lived in poverty in
2014.
23-133
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written consent of McGraw-Hill Education.
Ac ce ss ib il it y: Keyboard Navigation
Blooms: Understand
Diffi cult y:
02 Medium
Learning Objective: 23–05 Relate how poverty is measured and its incidence by age,
gender, ethnicity, and other characteristics.
Test Bank: II
Topic:
The Economics of Poverty
300.
The poverty rate in the U.S. increased significantly in the period 2006–2014.
301.
The incidence of poverty is very high among the elderly (65 years or older).
302.
All social insurance programs are welfare or public charity programs.
23-134
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written consent of McGraw-Hill Education.
Test Bank: II
Topic: The U.S. Income-Maintenance System
303.
The Social Security program is financed with funds from general tax revenues of the federal
government.
304.
Eligibility for social insurance programs is largely on the basis of need and “means tests.”
305.
The Supplemental Nutrition Assistance Program (formerly the food-stamp program) mostly
pays out cash-vouchers to eligible households.
306.
The Temporary Assistance for Needy Families (TANF) program that replaced the old Aid
for Families with Dependent Children welfare program succeeded in
reducing the number of
welfare recipients and increasing the employment rate among single mothers.
307.
The Temporary Assistance for Needy Families (TANF) program expanded welfare benefits
and has no limit on the number of years for receiving welfare benefits.
308.
When welfare payments like housing credits are completely cut off when the recipient’s
income goes above a certain threshold, then this could discourage the
recipient from finding
more work or a better-paying job.
309.
Labor market discrimination occurs when equivalent labor resources are paid or treated
differently even though their productive contributions are equal.
310.
In the taste-for-discrimination model, a prejudiced employer who prefers white workers and
who has a discrimination coefficient of $3/hour would still hire
African-Americans if the market
wage rate were $22/hour for white workers and $20/hour for African Americans.
311.
In the taste-for-discrimination model, an increase in the prejudice of employers will
decrease the demand for African-American workers, lower the African-
American wage rate,
and lower the ratio of African-American to white wages.
312.
Statistical discrimination occurs when employers base hiring decisions on individual
workers’ previous employment records and statistics.
313.
The crowding model of occupational segregation shows how white males earn higher
incomes at the expense of women and minorities who are restricted to a
limited number of
occupations.