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Test Canvas : TestBanks Chapter 18: The Econom ics of the Welfare State

Microeconom ics, 3e

Test Canvas: TestBanks Chapter 18: The Economics of the Welfare

State

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1. True/False: Poverty can be defined either in abso…

Question Poverty can be defined either in absolute terms or in relative terms.

2. True/False: The poverty threshold is the same reg…

Question The poverty threshold is the same regardless of the number of members in a

household.

3. True/False: People with more education have a low…

Question People with more education have a lower poverty rate.

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4. True/False: In the United States, inequality has ...

Question In the United States, inequality has increased over the past 25 years in part

because of rapid technological change.

5. True/False: Technological change in the United St...

Question Technological change in the United States over the past three decades has

increased the demand for skilled labor and decreased the demand for unskilled

labor.

6. True/False: Means-tested programs are available o...

Question Means-tested programs are available only to those with sufficiently low income. An

example of a means tested program is Temporary Assistance for Needy Families.

7. True/False: A negative income tax is a type of ta…

Question A negative income tax is a type of tax structure that taxes firms even if they have

negative income.

8. True/False: Poverty tends to be more prevalent fo...

Question Poverty tends to be more prevalent for those over the age of 65 than for those under

age 18.

9. Multiple Choice: Government payments to individuals fo...

Question Government payments to individuals for which no good or service is produced for

the government in exchange are:

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10. Multiple Choice: Which of the following transactions i...

Question Which of the following transactions is a transfer payment?

11. Multiple Choice: An example of a social insurance prog...

Question An example of a social insurance program is:

12. Multiple Choice: Which of the following is the best ex...

Question Which of the following is the best example of social insurance?

13. Multiple Choice: Children raised in poverty have a gre…

Question Children raised in poverty have a greater likelihood of living in poverty as adults than

do those raised in nonpoor families, because low income is highly correlated with

higher:

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14. Multiple Choice: Given that the definition of poverty …

Question Given that the definition of poverty has not been adjusted to reflect the long-term

rise in incomes, you would expect ________ in the percentage of the population

living below the poverty line.

15. Multiple Choice: Which of the following is not a leadi...

Question Which of the following is not a leading cause of poverty in the United States?

16. Multiple Choice: Which of the following is not a major…

Question Which of the following is not a major cause of poverty in the United States?

Points: 0

17. Multiple Choice: The percentage of the population that…

Question The percentage of the population that falls below the poverty line is called the:

18. Multiple Choice: The percentage of the U.S. population...

Question The percentage of the U.S. population living in poverty in 2009 was:

19. Multiple Choice: Which of the following is associated …

Question Which of the following is associated with poverty?

20. Multiple Choice: The poverty line is adjusted each yea...

Question The poverty line is adjusted each year to reflect:

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21. Multiple Choice: The single most important factor infl...

Question The single most important factor influencing children’s later socioeconomic

attainment is:

22. Multiple Choice: In 2009, which of the following demog...

Question In 2009, which of the following demographic groups had the highest poverty rate?

23. Multiple Choice: The poverty threshold for a household…

Question The poverty threshold for a household with one person in 2010 was:

24. Multiple Choice: America’s poverty rate is ________ th...

Question America’s poverty rate is ________ than that of most ________.

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25. Multiple Choice: During the past 25 years the degree o...

Question During the past 25 years the degree of income inequality in the United States has

been rising. Which of the following is not a possible reason for this phenomenon?

26. Multiple Choice: Economists believe that looking at th...

Question Economists believe that looking at the distribution of income by quintiles at one

point in time overstates the true inequality of income because:

27. Multiple Choice: In the United States, the mobility be…

Question In the United States, the mobility between income groups is:

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28. Multiple Choice: Studies of family income over time re…

Question Studies of family income over time reveal that:

29. Multiple Choice: There is considerable ________ among …

Question There is considerable ________ among the quintiles of the distribution of income,

with many families moving from ________ and others moving from ________

quintiles.

30. Multiple Choice: The ________ is widely used to measur…

Question The ________ is widely used to measure income inequality.

31. Multiple Choice: The ________ identifies the income at…

Question The ________ identifies the income at which half of the households in the

population earn more and half of the population earns less.

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32. Multiple Choice: If a nation’s Gini coefficient is ris…

Question If a nation’s Gini coefficient is rising over time, it is an indicator of:

33. Multiple Choice: There are six households in a rural c...

Question There are six households in a rural community. Each household earns $40,000 per

year. Suppose that a new resident builds a mansion in the community and that the

income in the new household is $4 million per year. After the new resident arrives,

the median household income has ________ and the mean household income has

________.

34. Multiple Choice: Over the past two decades, the share ...

Question Over the past two decades, the share of income going to the richest Americans

has ________ than the share going to the poorest Americans.

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35. Multiple Choice: According to the book, the data show ...

Question According to the book, the data show that in the United States in the first two

decades following World War II:

36. Multiple Choice: According to the book, the data show ...

Question According to the book, the data show that in the United States since World War II,

the distribution of income has:

37. Multiple Choice: Which of the following was not mentio…

Question Which of the following was not mentioned in the book as a possible factor in

increasing income inequality in the United States since 1968?

38. Multiple Choice: A factor that has been associated wit...

Question A factor that has been associated with the increase in income inequality in the

United States is:

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39. Multiple Choice: A factor that has been associated wit...

Question A factor that has been associated with the increase in income inequality in the

United States is the:

40. Multiple Choice: Among the following, which is a facto…

Question Among the following, which is a factor that has been associated with the increase

in income inequality in the United States?

41. Multiple Choice: A popular explanation for the most im…

Question A popular explanation for the most important cause of the increase in income

inequality in recent years is:

Points: 0

42. Multiple Choice: Food stamps, Medicaid, and housing su...

Question Food stamps, Medicaid, and housing subsidies are all examples of:

43. Multiple Choice: A ________ program is one for which t…

Question A ________ program is one for which the recipient qualifies on the basis of

________.

44. Multiple Choice: Which of the following programs repre…

Question Which of the following programs represents in-kind transfers?

45. Multiple Choice: Redistribution programs are means tes...

Question Redistribution programs are means tested. To qualify for such a program, a person

must demonstrate that:

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46. Multiple Choice: Which of the following American welfa...

Question Which of the following American welfare programs is an in-kind benefit that is not

means tested?

Answer Medicaid

47. Multiple Choice: When a welfare program is provided to…

Question When a welfare program is provided to those whose income falls below some

minimum, it is said to be:

48. Multiple Choice: Food stamps are an example of:

Question Food stamps are an example of:

Answer a negative income tax.

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49. Multiple Choice: Measured by the amount of money spent...

Question Measured by the amount of money spent by the U.S. government, which of the

following American welfare programs is the largest?

Answer food stamps

50. Multiple Choice: Programs designed to provide benefits...

Question Programs designed to provide benefits to people whose income falls below some

minimum are called:

nominal income programs.

51. Multiple Choice: The provision of specific goods and s…

Question The provision of specific goods and services (rather than cash) to needy people is:

Answer the income effect.

52. Multiple Choice: The largest ________ program in the U...

Question The largest ________ program in the United States is ________.

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53. Multiple Choice: The negative income tax:

Question The negative income tax:

Answer is the term used by economists to describe a badly designed tax system.

54. Multiple Choice: Compared to a generation ago, public ...

Question Compared to a generation ago, public aid programs that are likely to benefit

families have received:

Answer no funding.

55. Multiple Choice: An example of a means-tested program is:

Question An example of a means-tested program is:

Answer expenditure on national defense.

56. Multiple Choice: Critics of Temporary Assistance for N...

Points: 0

Question Critics of Temporary Assistance for Needy Families argue that it creates perverse

incentives such as:

57. Multiple Choice: Which of the following American welfa...

Question Which of the following American welfare programs is a means-tested in-kind

benefit?

58. Multiple Choice: ________ is (are) a means-tested mone...

Question ________ is (are) a means-tested monetary benefit in in a welfare program.

Answer Food stamps

59. Multiple Choice: Which of the following programs is no...

Question Which of the following programs is not an antipoverty program?

Points: 0

60. Multiple Choice: Which of the following American welfa...

Question Which of the following American welfare programs is a monetary benefit that is not

means tested?

61. Multiple Choice: The age group in the United States wi...

Question The age group in the United States with the highest poverty rate is ________ years

old.

62. Multiple Choice: In most wealthy countries excluding t...

Question In most wealthy countries excluding the United States, the government pays

_________ of all medical costs.

63. Multiple Choice: In the United States, the government ...

Question In the United States, the government pays _______ of all medical costs.

Points: 0

64. Multiple Choice: In the United States, individuals pay…

Question In the United States, individuals pay directly (out of pocket) _______ of all medical

costs.

65. Multiple Choice: Becky works for a large grocery store…

Question Becky works for a large grocery store that provides a health insurance program to

all workers. This is an example of:

66. Multiple Choice: Suppose ABC Health is a private healt...

Question Suppose ABC Health is a private health insurance company that offers a one-size-

fits–all policy to all customers. Each customer pays a premium equal to the

average consumer’s annual medical expenses. This is a system that has the

potential to fail due to the:

Points: 0

67. Multiple Choice: In 2009, health care expenditures in ...

Question In 2009, health care expenditures in the United States were approximately _______

per person.

68. Multiple Choice: In 2009, health care expenditures in ...

Question In 2009, health care expenditures in the United States accounted for _______ of

GDP.

69. Multiple Choice: Private health insurance is funded by:

Question Private health insurance is funded by:

70. Multiple Choice: When healthy people drop their health...

Question When healthy people drop their health insurance, leaving only sicker people to buy

insurance, this is called:

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71. Multiple Choice: Insurance companies attempt to minimi...

Question Insurance companies attempt to minimize adverse selection by:

72. Multiple Choice: When adverse selection occurs, health...

Question When adverse selection occurs, healthy people pay premiums that are ________

their actual health care costs.

73. Multiple Choice: An advantage of employment-based insu…

Question An advantage of employment-based insurance is that it:

Points: 0