CHAPTER 15: Income, Inequality, and Poverty
MULTIPLE CHOICE
1. What theory might partially explain why a person perceived as unattractive might earn less than a
person seen as attractive?
a. winner-take-all d. occupational crowding
b. compensating differential e. efficiency wage
c. samaritan’s dilemma
2. Late-night employees working in a 24-hour store often earn more than similar employees who
work the day shift. What explains this difference in pay?
a. life-cycle wage pattern d. negative compensating differential
b. human capital theory e. positive compensating differential
c. occupational crowding
3. Using a compensating differential wage theory, some individuals earn more than others because
workers
a. who earn more are more productive.
b. need to earn more to be willing to accept dangerous working conditions.
c. need to earn more to be willing to accept a safe indoor job.
d. who are more educated and better trained are able to earn more than the equilibrium wage.
e. who earn more tend to be concentrated in a single occupation.
4. What theory would justify a job advertisement that reads: “Help Wanted! Dangerous job but
excellent pay and benefits”?
a. human capital d. winner-take-all
b. life-cycle wage pattern e. efficiency wage
c. compensating differentials
5. Mitchell has a cause: He loves cats. As an economist, he could earn $100,000 as a faculty member,
but instead he decides to devote his time to the Humane Society as its chief economist. Knowing
nothing else, you would expect that he would receive
a. higher pay at the Humane Society because of the difference in skill levels.
b. lower pay at the Humane Society because of signal theory.
c. lower pay at the Humane Society because of the compensating differential theory.
d. higher pay at the Humane Society because of signal theory.
e. the same pay as either a professor or as a chief economist at the Humane Society.
6. The popular TV shows Ice Road Truckers and Ax Men portray workers engaged in dangerous jobs
such as driving big trucks over ice and cutting down big trees. You would expect that these
workers would earn a
a. low salary because of tax credits for the poor.
b. high salary because they are in desirable geographic locations.
c. high salary because they have dangerous jobs.
d. low salary because they have union jobs.
e. low salary because they have dangerous jobs.
7. As a college student, Bethany realizes that she has become an expert at playing video games. If
Bethany saw a commercial on TV seeking applications for video game testers (her dream job), she
would expect the job to pay
a. low wages because of the efficiency wage principle.
b. low wages because of occupational crowding.
c. high wages because of compensating differentials.
d. low wages because of compensating differentials.
e. high wages because of the in-kind transfers.
8. Someone might expect a job as a college professor to pay a wage lower than the wage one could
receive in the private sector because of
a. negative compensating differentials. d. the life-cycle wage pattern.
b. positive compensating differentials. e. in-kind transfers.
c. efficiency wages.
9. As the mayor of a local town, Newman has the power to repeal workplace safety laws. How would
repealing all workplace safety laws affect the wages of kindergarten teachers who work in
relatively safe jobs at the local school?
a. It would reduce teachers’ wages because of less-severe negative compensating differentials.
b. It would increase teachers’ wages because of less-severe negative compensating differentials.
c. It would reduce teachers’ wages because of more-severe negative compensating differentials.
d. It would increase teachers’ wages because of more-severe negative compensating differentials.
e. It would have little effect on teachers’ wages because of a lack of negative compensating
differentials.
10. Jasmine, a woman, is more educated and better trained than Christian, a male. Despite these
differences in education and training, Christian still earns more because he is a coal miner, whereas
Jasmine is a secretary. Which model best explains the fact that Christian earns more than Jasmine?
a. efficiency wage d. human capital
b. winner-take-all e. compensating differentials
c. income mobility
11. Tiffany is a physician in New York City, her favorite city in the world. What would be some of the
nonmonetary determinants of her wages?
a. Her wages are higher because of her education and the desirability of her location.
b. Her wages are lower because of her education and the desirability of her location.
c. Her wages are higher because of her education, but they are reduced because of the desirability
of her location.
d. Her wages are higher because of the desirability of her location, but they are slightly reduced
because of her education.
e. Her wages are lower because her employer pays her an efficiency wage.
12. Coal mining is a dangerous occupation. For such a job, the passage of workplace safety laws
would
a. at first increase but then decrease the severity of the negative compensating differential.
b. increase the severity of the negative compensating differentials.
c. decrease the severity of the negative compensating differentials.
d. at first decrease but then increase the severity of the negative compensating differentials.
e. have no effect on the compensating differentials.
13. As the mayor of a local town, Wang has the power to repeal workplace safety laws. For
construction workers building the local school, the repeal of all workplace safety laws would
a. reduce their wages because of less severe positive compensating differentials.
b. increase their wages because of less severe positive compensating differentials.
c. reduce their wages because of more severe positive compensating differentials.
d. increase their wages because of more severe positive compensating differentials.
e. result in no effect on their wages because of offsetting differentials.
14. What theory would lead someone to be suspicious of a job advertisement that reads: “Help
Wanted! Fun and exciting job with excellent pay”?
a. human capital d. compensating differentials
b. life-cycle wage pattern e. efficiency wage theory
c. winner-take-all
15. An employee gains work experience by staying in a job for a long period of time. An economist
would expect this employee’s wages to
a. increase as experience is gained.
b. decrease as experience is gained.
c. increase, but then decrease over time as experience is gained.
d. decrease, but then increase over time as experience is gained.
e. stay the same since experience would have no effect on wages.
16. What theory would suggest that learning material on your own generates the same benefits as those
achieved by formally attending classes and receiving a degree?
a. human capital d. winner-take-all
b. signal e. efficiency wage
c. compensating differentials
17. When comparing individuals’ wages, differences in their levels of education and training
a. can completely explain the existence of income inequality.
b. can completely explain why some individuals are more productive than others.
c. have no bearing on why some individuals are drawn to certain occupations.
d. can partially explain why some individuals earn higher wages than others.
e. have no bearing on income mobility.
18. Some employers are willing to provide job training for workers. However, an employer might
require the worker to pay for the training when the training is
a. specific to the employer.
b. a general skill that could be used in any job for any employer.
c. of short length.
d. extensive.
e. provided by a manager in the firm.
19. Some employers are willing to provide job training for workers. The employer might be willing to
pay for the training when
a. the training is specific to the employer.
b. the training is a general skill that could be used at any job for any employer.
c. the training is of short length.
d. the training is extensive.
e. on its completion, the student receives a degree.
20. If Alexia is more educated and better trained than Felix, economists would use the ________
model to predict that Alexia should earn the higher wage.
a. occupational crowding d. human capital
b. winner-take-all e. compensating differential
c. income mobility
21. Christine’s mother told her that she needed to go to college because it would be the only way she
could get a high-paying job. What economic theory would justify her advice?
a. efficiency wage d. human capital
b. compensating differential e. occupational crowding
c. life-cycle wage pattern
22. One frequently sees a strong relationship between median annual earnings and education level.
What theory would suggest that education provides valuable skills?
a. compensating differentials d. signal
b. income mobility e. human capital
c. life-cycle wage pattern
23. In recent decades, more women than men have received undergraduate degrees. Consequently,
women’s wages will ________ according to ________ theory.
a. decrease; compensating differential d. increase; human capital
b. increase; compensating differential e. decrease; efficiency wage
c. decrease; human capital
24. What theory suggests that learning material on your own would not generate the same benefits as
those achieved by formally attending classes and receiving a degree?
a. human capital d. winner-take-all
b. signal e. efficiency wage
c. compensating differentials
25. The cost of education at an Ivy League university is more than $50,000 per year. At a community
college, the cost of education is only a few thousand dollars per year. What economic theory could
justify enrolling in an Ivy League school?
a. compensating differentials d. signal
b. income mobility e. human capital
c. life-cycle wage pattern
26. If Hanna were the chief economics planner in Mitchell, South Dakota, a rural location that boasts
the world’s largest corn palace, what would be her biggest challenge in encouraging economic
development in terms of location?
a. If the location is deemed undesirable by employees, employers will have to pay lower wages.
b. If the location is deemed undesirable by employees, employers will have to pay higher wages.
c. If the location has a low cost of living, employers will have to pay higher wages.
d. If the location has a high cost of living, employers will have to pay lower wages.
e. Its location should have no effect on wages.
27. As an Internet retailer, Luciana needs to find a location for her headquarters. If Luciana is
primarily concerned with the cost of labor and wants to pay those she hires as little as possible,
Luciana should establish her business in a(n)
a. location with a lot of good restaurants.
b. cold location in a rural area.
c. urban location that has a lot of crime.
d. rural location that has frequent wildfires and floods.
e. urban location with a lot of earthquakes.
28. As the owner of a television studio, Kelvin is concerned about the high wages he must pay his
employees relative to wages paid by other television studio owners. A consultant has suggested
that his location is a contributing factor to these higher wages because he has built his studio in
a(n)
a. sunny location in an urban area with a lot of good restaurants.
b. rural location populated by friendly people.
c. urban location that has very little crime and good schools.
d. location that has frequent wildfires and floods.
e. urban location populated by friendly people.
29. When comparing a union job to a nonunion job, we would expect to see
a. higher wages being paid to the employee holding a nonunion job.
b. lower wages being paid to the employee holding a union job.
c. better pay and benefits being received by the employee holding a nonunion job.
d. no difference in the pay and benefits received by the employees in the union and nonunion
jobs.
e. higher wages being paid for the employee holding a union job.
30. What is a significant difference between a union job and a nonunion job in terms of pay?
a. Union jobs pay less than nonunion jobs because of efficiency wage theory.
b. Nonunion jobs pay more than union jobs because of the winner-take-all theory.
c. Union jobs pay more than nonunion jobs because of occupational crowding.
d. Union jobs pay more than nonunion jobs because of the threat of a strike.
e. Nonunion jobs pay more than union jobs because of binding arbitration.
31. Between two unionized firms, one would expect workers to receive higher wages in a firm
a. where the threat of a strike is low.
b. where the threat of a strike is high.
c. that can substitute labor with capital easily.
d. that can relocate the production process easily.
e. that has workers with low education levels.
32. What theory would suggest that an employee should receive a wage higher than the equilibrium
wage rate?
a. efficiency wage d. samaritan’s dilemma
b. in-kind transfers e. binding arbitration
c. occupational crowding
33. As an employer, Giselle wants productive employees who will stay with the firm for an extended
period of time, so she should pay
a. less because human capital theory suggests better-paid employees work harder and stay longer.
b. less because of the existence of compensating differentials.
c. more because human capital theory suggests better-paid employees work harder and stay
longer.
d. more because of the existence of compensating differentials.
e. more because efficiency wage theory suggests that the employer will be able to secure more
productive employees.
34. Using an efficiency wage theory, why do some individuals earn more than the market equilibrium
wage?
a. Workers who earn more are those who are more productive.
b. Workers need to earn more to be willing to accept dangerous working conditions.
c. Workers need to earn more to be willing to accept a safe indoor job.
d. Workers who are more educated and better trained are able to earn more than the equilibrium
wage.
e. Workers who earn more tend to be concentrated in a single occupation.
35. What theory would justify a job advertisement that reads: “Help Wanted! Looking for a person
willing to stay with the firm for a long time. Excellent pay”?
a. human capital d. winner-take-all
b. life-cycle wage pattern e. efficiency wage
c. compensating differentials
36. As an employee at a convenience store, Jorge is content to stay with his employer because his
wage is 50 percent higher than the market rate. What economic theory could justify his employer’s
willingness to pay above the market rate?
a. samaritan’s dilemma d. compensating differential
b. winner-take-all e. efficiency wage
c. human capital
37. Someone might expect a fast-food job to pay a wage higher than the minimum wage because it
a. is boring and an efficiency wage is offered to reduce turnover.
b. is safe.
c. doesn’t require a lot of education.
d. is not unionized.
e. is exciting and fast-paced.
38. When workers of the same ability are not paid the same amount because of a group characteristic
such as ethnic origin or age, we call this
a. efficiency wage theory. d. winner-take-all theory.
b. wage discrimination. e. occupational crowding.
c. compensating differential theory.
39. A white male from the Midwest earns $50,000 a year and a white female earns $40,000 a year.
What can we conclude about this situation?
a. There is no discrimination present.
b. The white female is being discriminated against by $10,000.
c. The white female is being discriminated against, but the amount is less than $10,000.
d. The white female is being discriminated against, but the dollar amount is unclear.
e. There is not enough information to know whether discrimination exists.
40. Besides sex discrimination, women might earn less than men in the workplace because women
a. have more human capital.
b. have fewer years of work experience.
c. have more years of work experience.
d. work more hours per year.
e. more frequently belong to a union.
41. The wages of those near retirement decrease slightly because these workers are
a. gaining additional skills.
b. becoming more productive.
c. becoming more efficient.
d. being discriminated against.
e. gaining additional experience but are not keeping up with new technologies.
42. Belinda expects that her wages will increase over time. What theory justifies this expectation?
a. compensating differential d. occupational crowding
b. life-cycle wage pattern e. samaritan’s dilemma
c. efficiency wage
43. Besides overt sex discrimination, women also might earn less than men in the workplace because
women
a. have more human capital.
b. tend to congregate in a narrow range of jobs that pay very little.
c. have more years of work experience.
d. work more hours per year.
e. tend to receive an efficiency wage.
44. What theory can partially explain why pink-collar jobs, such as nurse and dental hygienist, earn so
little despite the important services they provide?
a. winner-take-all d. occupational crowding
b. compensating differential e. efficiency wage theory
c. samaritan’s dilemma
45. The occupational crowding model of discrimination predicts
a. why men, in some cases, earn less than women.
b. that firms will compete with one another for the best employee and that discrimination will be
eliminated.
c. that, unless the government gets involved, discrimination will become more severe.
d. that men’s wages will fall and women’s wages will rise when certain jobs are no longer
dominated by men.
e. the financial advantages for women crowding into a single occupation.
46. Which statement best represents the phenomenon of occupational crowding?
a. Women tend to be overrepresented in certain jobs.
b. Women and men are equally represented in all occupations.
c. A woman might earn less than a man because she has less education.
d. Women find themselves earning more than equally capable men.
e. Women have their work career interrupted during their childbearing years.
47. If Ty’s daughter were to inform him that she wanted to be a bank teller and he were concerned
about her ability to pay her bills, what economic theory could Ty use to convince his daughter to
become an engineer instead?
a. compensating differential d. occupational crowding
b. life-cycle wage pattern e. efficiency wage
c. winner-take-all
48. As a male nurse, Gregory often complains about the low pay he receives despite the fact that he
has a significant amount of education. What economic theory explains his suppressed wage?
a. compensating differential d. occupational crowding
b. human capital e. efficiency wage
c. winner-take-all
49. What theory would suggest that a Nobel Prize–winning economist should earn significantly more
than other economists?
a. samaritan’s dilemma d. compensating differential
b. life-cycle wage pattern e. winner-take-all
c. efficiency wage
50. What is the name of the model that best explains why an actor in a nationally broadcast television
program earns so much more than an actor who is equally talented and productive but who
performs in a local play?
a. occupational crowding d. human capital
b. winner-take-all e. life-cycle wage pattern
c. income mobility
51. What theory can explain why a CEO might earn so much more than other managers with similar
experience and education at the same company?
a. efficiency wage d. samaritan’s dilemma
b. winner-take-all e. binding arbitration
c. human capital
52. The pay for journalists is quite varied. A top-tier journalist often receives a steady flow of
assignments, such as two weekly columns, and so earns generous pay. A lower-tier journalist,
however, often experiences sporadic work assignments with little to no pay. What economic theory
explains this situation?
a. winner-take-all d. occupational crowding
b. in-kind transfers e. compensating differentials
c. efficiency wage
53. Why is it unlikely that income inequality could ever be eliminated?
a. Workers will always have the same skills, abilities, and productivities.
b. All jobs are roughly equal in their attractiveness to workers.
c. All workers are perfectly mobile.
d. Workers will always have different skills, abilities, and productivities.
e. Workers all share the goal of earning as much income as possible.
54. How can a stronger legal system reduce income inequality?
a. It encourages investment by removing corruption.
b. It encourages the payment of efficiency wages.
c. It encourages occupational crowding.
d. It encourages winner-take-all situations.
e. It discourages investments in human capital.
55. What role does corruption play in creating income inequality?
a. It discourages mobility.
b. It encourages human capital investments.
c. It discourages winner-take-all situations.
d. It discourages business investment.
e. It discourages discrimination.
56. Felicia has an idea to provide a grocery home-delivery service in the developing country of
Mongolia. What role would corruption play in the success of her business?
a. It would make the market more competitive.
b. It would encourage her to work harder.
c. It would encourage her to invest in her business.
d. It would discourage her about investing in her business.
e. It would have no effect on the success of her business.
57. What differentiates the U.S. income inequality ratio from that found in less-developed countries?
a. It is higher than in less-developed countries due to the large number of poor people.
b. In less-developed countries, the inequality ratio is lower than in the United States due to the
large number of rich people.
c. In the United States, it is lower than that found in less-developed countries because the poor in
the United States earn more than the poor in less-developed countries.
d. There is no significant difference between the inequality ratios in the United States and in
less-developed countries.
e. In the United States, it is lower than in less-developed countries due to corruption.
58. What is the approximate inequality ratio (richest 20 percent ÷ poorest 20 percent) in the United
States?
a. 4.1 d. 75.1
b. 15.5 e. 98.2
c. 24.3
59. Approximately ________ percent of the total national income is owned by the poorest 40 percent
(bottom two quintiles) of households in the United States.
a. 3 d. 20
b. 7 e. 40
c. 12
60. If households in the lowest income-earning bracket are doing relatively well compared to those in
the highest income-earning bracket, the inequality ratio will
a. fall. d. initially fall, but then grow.
b. initially grow, but then fall. e. be unaffected.
c. grow.
61. What is the degree of income inequality in Traubia?
a. 0.1 d. 100
b. 1 e. 1,000
c. 10
62. What is the degree of income inequality in Ginsland?
a. 0.3 d. 300
b. 3 e. 25,000
c. 30
63. What is the degree of income inequality in Mircalla?
a. .05 d. 50
b. 0.5 e. 500
c. 5
64. What is the degree of income inequality in Baldovinia?
a. .0075 d. 750
b. 0.75 e. 7,500
c. 7.5
65. Given the following information, what is the inequality ratio?
Level of Mean Income
Bottom quintile $500
Second quintile $1,500
Middle quintile $2,000
Fourth quintile $20,000
Top quintile $40,000
a. 3 d. 80
b. 8 e. 8,000
c. 10
66. Given the following information, what is the inequality ratio?
Level of Mean Income
Bottom quintile $2,000
Second quintile $10,000
Middle quintile $18,000
Fourth quintile $60,000
Top quintile $86,000
a. 5 d. 21
b. 86 e. 43
c. 9
67. The poverty rate is calculated as the percentage of the population
a. who are not working.
b. who are unable to pay their food and housing expenses.
c. who are not earning sufficient income from labor.
d. whose incomes are above a poverty threshold.
e. whose incomes are below a poverty threshold.
68. How does the level of income inequality in the United States compare to that in other countries?
a. There is less income inequality in the United States when compared to other, more developed
countries, and less in the United States when compared to less developed countries.
b. There is greater income inequality in the United States when compared to other developed
countries, and less in the United States when compared to less developed countries.
c. There is less income inequality in the United States when compared to other, more developed
countries, and greater income inequality in the United States when compared to less developed
countries.
d. There is greater income inequality in the United States when compared to other, more
developed countries, and greater income inequality in the United States when compared to less
developed countries.
e. There are no differences in income inequality between the United States and most other
countries in the world.
69. Approximately ________ percent of income is earned by the richest 20 percent of households in
the United States?
a. 90 d. 80
b. 10 e. 20
c. 50
70. Approximately ________ percent of income is earned by the poorest 20 percent of households in
the United States?
a. 3.2 d. 25.3
b. 15.6 e. 10.4
c. 20.1
71. In a discussion with Tyrice’s mother, who is an economist, Tyrice says, “I am living in poverty, I
cannot be expected to buy you a birthday gift.” She replies that technically Tyrice is not living in
poverty because his income is above the
a. poverty rate. d. inequality ratio.
b. poverty threshold. e. in-kind transfer rate.
c. negative income tax rate.
72. Economists believe the level of inequality in less developed countries is overstated because it
doesn’t take ________ into account.
a. corruption
b. income from low-paying jobs
c. investments in human capital
d. goods and services produced within the home
e. discrimination
73. Which of the following represents an in-kind transfer?
a. a scholarship
b. an income tax refund
c. a Social Security check
d. an unemployment insurance check
e. food supplements received through the Subsidized Nutrition Assistance Program
74. The movement of individuals and households from one income range to another is called
a. income mobility. d. the samaritan’s dilemma.
b. wealth mobility. e. a compensating differential.
c. in-kind transfers.
75. Income mobility represents the ________ of a worker to ________.
a. inability; move to a job.
b. inability; be trained and earn less.
c. inability; be trained and earn more.
d. ability; move to a job where he or she can earn the most.
e. ability; move up or down the economic ladder.
76. In the United States, there is a strong belief that anyone willing to work hard is able to become
rich. This belief reflects which of the following theories?
a. efficiency wage d. compensating differential
b. income mobility e. occupational crowding
c. samaritan’s dilemma
77. As a recent college graduate, Dora has a temporary inability to pay her rent and is forced to move
back to her old bedroom in her parent’s house. Dora’s parents, having taken an economics class
decades ago, may be unconcerned with her current low-income situation because they think she
a. lacks income mobility.
b. is among the long-term poor.
c. is among the marginal poor.
d. is a victim of the samaritan’s dilemma.
e. is a victim of corruption.
78. One of the causes of poverty in the United States is
a. high worker productivity.
b. low levels of education.
c. antidiscrimination laws.
d. government involvement in the marketplace.
e. the existence of economic prosperity in the macroeconomy.
79. The approximate poverty rate for children in the United States is ________ percent.
a. 0.5 d. 20
b. 6 e. 31
c. 10
80. The approximate poverty rate for minority women who are heads of household in the United States
is ________ percent.
a. 10 d. 50
b. 20 e. 75
c. 38
81. It is important to adjust the poverty threshold every year because of
a. changes in the minimum wage.
b. changes in the level of in-kind transfers.
c. changes in taxes.
d. changing prices.
e. changes in family size.
82. An individual family’s poverty threshold includes
a. the income of tenants living in the household.
b. cost-of-living adjustments.
c. in-kind transfers.
d. the income of relatives living outside the house who could contribute in the case of need.
e. the income of the head of household.
83. Government job initiatives have been generally unsuccessful at reducing the poverty rate because
they
a. discourage the formation of unions.
b. discourage in-kind transfers.
c. discourage efficiency wages from being paid.
d. do little to provide education and retraining.
e. discourage winner-take-all situations.
84. Economists say that official poverty statistics do not accurately measure the true rate of poverty
because the data fails to include
a. income earned from investments. d. in-kind transfers.
b. income earned by the elderly. e. single-parent households.
c. income earned by teenagers.
85. Which of the following is an example of an in-kind transfer?
a. a Social Security check
b. cash intended for the purchase of food
c. Medicaid
d. cash intended for the purchase of housing
e. the earned income tax credit
86. In the United States, households that have very little income are provided funds that can be used
only for the purchase of food (more popularly known as food stamps). What do food stamps
represent?
a. a cash transfer d. in-kind transfer
b. a winner-take-all situation e. a compensating differential
c. income mobility
87. Erin has a theory that the largest cause of poverty is poor budgeting and financial planning. Her
suggestion to provide budgeting and planning advice to the poor is similar to the reasoning behind
a. the winner-take-all theory. d. occupational crowding.
b. in-kind transfers. e. compensating differentials.
c. efficiency wage theory.
88. The antipoverty program in the United States that helps the greatest number of households is the
a. college grants program. d. earned income tax credit.
b. child-care assistance program. e. housing assistance program.
c. food-stamp program.
89. The earned income tax credit (EITC) represents
a. a subsidy credit. d. an in-kind transfer.
b. a negative income tax. e. income mobility.
c. a government voucher.
90. An example of a negative income tax is
a. the minimum wage. d. food stamps.
b. the income tax system. e. housing assistance.
c. the earned income tax credit.
91. The country of Econoville has created a negative income tax for its residents. Tax liability in the
country is determined by the following equation:
Taxes owed = (20% of income) − $7,500
If Youssef’s income is $10,000, what is his total tax owed (a positive number) or tax credit (a
negative number)?
a. −$5,500 d. $2,000
b. −$2,000 e. $5,000
c. $0
92. The country of Econoville has created a negative income tax for its residents. Tax liability in the
country is determined by the following equation:
Taxes owed = (20% of income) − $7,500
If Olivia’s income is $60,000, what is her total tax owed (a positive number) or tax credit (a
negative number)?
a. −$16,500 d. $12,000
b. −$12,000 e. $16,500
c. $4,500
93. ________ occurs when those who collect welfare benefits are then discouraged from working.
a. Income mobility d. An in-kind transfer
b. Poverty threshold e. Winner-take-all
c. A samaritan’s dilemma
94. What two factors have to be balanced when developing poverty policies?
a. a desire to help the poor and a need for the poor to eventually become self-sufficient
b. the desire to give as much as possible and a preference to have certain people do certain jobs
c. the desire to give as much as possible and a desire not to be involved in how the poor spend
what they are given
d. the desire to give as much as possible and a desire to control education levels
e. the desire to give as much as possible and a desire to control family size
95. Earnings gaps can be explained by all of the follow factors, EXCEPT
a. life-cycle wage pattern. d. location and lifestyle.
b. wage discrimination. e. human capital.
c. personal savings.
96. ________ wages are higher than equilibrium wages, offered to increase worker productivity.
a. Compensatory d. Production
b. Supraequilibrium e. Altruistic
c. Efficiency
97. A ________ is a work stoppage designed to aid a union’s bargaining position.
a. layoff d. strike