Question 1

Critics of Temporary Assistance for Needy Families argue that it creates perverse incentives such as:

Accepted Answer

A)   family breakup, since a family with both spouses present may not qualify for aid.
B)   a reward for not seeking work.
C)   the abandonment of children.
D)   family breakup, a reward for not seeking work, and the abandonment of children.E) C) and D)
F) A) and B)

Question 2

Health care in the United States is DIFFERENT FROM that of other wealthy countries in all of the following ways EXCEPT that:

Accepted Answer

A)   Americans rely more on private health insurance.
B)   Americans spend more per person on health care.
C)   the United States is the only country in which large numbers of people lack health insurance.
D)   the United States is the only country that provides government health care.E) A) and B)
F) C) and D)

Question 3

If you were to provide an economic policy without knowing your own economic status, you would be operating:

Accepted Answer

A)   under a veil of ignorance.
B)   in a way similar to how Robert Nozick believes one should operate.
C)   in a way that would not encourage economic fairness.
D)   in such a way as to increase the number of people below the poverty line.E) C) and D)
F) B) and D)

Question 4

The Gini coefficient:

Accepted Answer

A)   varies between 0 and 1.
B)   is also equal to the mean household income for a country.
C)   is the same for most industrially developed countries.
D)   is seldom used, since it does not help one understand income inequality.E) C) and D)
F) B) and C)

Question 5

In the United States and other wealthy countries, a large part of the welfare state is devoted to payments for:

Accepted Answer

A)   health care.
B)   unemployment insurance.
C)   food stamps.
D)   Temporary Aid to Needy Families.E) All of the above
F) A) and B)

Question 6

Suppose ABC Health is a private health insurance company that offers an identical 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 because of the _____ problem.

Accepted Answer

A)   adverse selection
B)   income inequality
C)   single-payer
D)   equity versus efficiencyE) A) and B)
F) A) and C)

Question 7

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 _____.

Accepted Answer

A)   increased; increased
B)   not changed; increased
C)   increased; not changed
D)   not changed; not changedE) All of the above
F) B) and C)

Question 8

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?

Accepted Answer

A)   technological progress that has increased the demand for high-skilled workers relative to the demand for low-skilled workers
B)   increased imports of labor-intensive products
C)   increased immigration
D)   higher divorce ratesE) A) and B)
F) B) and D)

Question 9

Studies of family income over time reveal that:

Accepted Answer

A)   most people in the highest quintile tend to fall to the lowest quintile during their lifetime.
B)   income mobility is rare for all quintiles of the income distribution.
C)   many people who move down the income ladder are young.
D)   many people who start out at the bottom of the income ladder when they are young move up the income ladder as they age and move down again when they retire.E) C) and D)
F) B) and D)

Question 10

Temporary Assistance for Needy Families is a means-tested program that:

Accepted Answer

A)   offers assistance to anyone who is defined as below the poverty threshold.
B)   provides limited assistance to poor households with children.
C)   is essentially an in-kind benefit.
D)   is the same thing as Medicaid.E) A) and C)
F) None of the above

Question 11

Jane works part-time and earns $11,000 per year. Because she is below the poverty line, she also receives $4,000 in various welfare benefits. Suppose she is offered a new job that would pay her $14,000 and would bring her earnings high enough so that she no longer qualified for any welfare benefits. This is what is known as a notch. Explain what is happening with Jane and how could we modify the system to eliminate the notch.

Accepted Answer

This is a notch because Jane would earn ...

Question 12

When a welfare program is provided to those whose income falls below some minimum, it is said to be:

Accepted Answer

A)   means-tested.
B)   an in-kind benefit.
C)   a monetary benefit.
D)   a negative income tax.E) C) and D)
F) B) and D)

Question 13

Which of the following is the BEST example of social insurance?

Accepted Answer

A)   liability insurance for automobiles
B)   food stamps
C)   housing subsidies
D)   Social SecurityE) B) and C)
F) C) and D)

Question 14

Payments from the government to assist individuals are called:

Accepted Answer

A)   taxes.
B)   transfers.
C)   the welfare state.
D)   SCHIP.E) B) and C)
F) C) and D)

Question 15

The poverty threshold is defined as:

Accepted Answer

A)   less than $15,000.
B)   the minimum annual income that is considered adequate to purchase the necessities of life.
C)   a static and inaccurate figure, since it does not change when prices change.
D)   $20,000 for both individuals and households.E) A) and C)
F) A) and D)

Question 16

Medicaid is funded by:

Accepted Answer

A)   private charities.
B)   the federal government only.
C)   state governments only.
D)   federal and state governments.E) C) and D)
F) A) and D)

Question 17

John Rawls believed that:

Accepted Answer

A)   government has a small role in achieving an economically fair society.
B)   we should do unto others as we would like them to do unto us if we were in the same place.
C)   Robert Nozick's views of economic fairness are similar to his own view.
D)   government has no right to force people with high incomes to support others with lower incomes.E) B) and D)
F) None of the above

Question 18

In the United States, income inequality fell:

Accepted Answer

A)   during the 1930s and 1940s.
B)   after 1980.
C)   during the years following World War II.
D)   after 1917 and has remained consistent since then.E) A) and D)
F) B) and C)

Question 19

Which of the following U.S. welfare programs is an in-kind benefit that is NOT means-tested?

Accepted Answer

A)   Medicaid
B)   Medicare
C)   food stamps
D)   Social Security incomeE) A) and D)
F) A) and C)

Question 20

In 2012, which of the following demographic groups had the HIGHEST poverty rate?

Accepted Answer

A)   African-Americans
B)   Hispanics
C)   Whites
D)   female-headed families with no husband presentE) B) and C)
F) None of the above

Exam 18: The Economics of the Welfare

Medicaid is funded by:

Correct Answer
verified

In the United States, income inequality fell:

Correct Answer
verified

Correct Answer
verified

John Rawls believed that:

Correct Answer
verified

Which of the following is the BEST example of social insurance?

Correct Answer
verified

Payments from the government to assist individuals are called:

Correct Answer
verified

Studies of family income over time reveal that:

Correct Answer
verified

When a welfare program is provided to those whose income falls below some minimum, it is said to be:

Correct Answer
verified

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?

Correct Answer
verified

Critics of Temporary Assistance for Needy Families argue that it creates perverse incentives such as:

Correct Answer
verified

Suppose ABC Health is a private health insurance company that offers an identical 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 because of the _____ problem.

Correct Answer
verified

Which of the following U.S. welfare programs is an in-kind benefit that is NOT means-tested?

Correct Answer
verified

In the United States and other wealthy countries, a large part of the welfare state is devoted to payments for:

Correct Answer
verified

The Gini coefficient:

Correct Answer
verified

Temporary Assistance for Needy Families is a means-tested program that:

Correct Answer
verified

Health care in the United States is DIFFERENT FROM that of other wealthy countries in all of the following ways EXCEPT that:

Correct Answer
verified

The poverty threshold is defined as:

Correct Answer
verified

If you were to provide an economic policy without knowing your own economic status, you would be operating:

Correct Answer
verified

Correct Answer
verified
This is a notch because Jane would earn ...
View Answer

In 2012, which of the following demographic groups had the HIGHEST poverty rate?

Correct Answer
verified

Exam 18: The Economics of the Welfare

Medicaid is funded by:

Correct AnswerverifiedShow Answer

In the United States, income inequality fell:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

John Rawls believed that:

Correct AnswerverifiedShow Answer

Which of the following is the BEST example of social insurance?

Correct AnswerverifiedShow Answer

Payments from the government to assist individuals are called:

Correct AnswerverifiedShow Answer

Studies of family income over time reveal that:

Correct AnswerverifiedShow Answer

When a welfare program is provided to those whose income falls below some minimum, it is said to be:

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Critics of Temporary Assistance for Needy Families argue that it creates perverse incentives such as:

Correct AnswerverifiedShow Answer

Suppose ABC Health is a private health insurance company that offers an identical 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 because of the _____ problem.

Correct AnswerverifiedShow Answer

Which of the following U.S. welfare programs is an in-kind benefit that is NOT means-tested?

Correct AnswerverifiedShow Answer

In the United States and other wealthy countries, a large part of the welfare state is devoted to payments for:

Correct AnswerverifiedShow Answer

The Gini coefficient:

Correct AnswerverifiedShow Answer

Temporary Assistance for Needy Families is a means-tested program that:

Correct AnswerverifiedShow Answer

Health care in the United States is DIFFERENT FROM that of other wealthy countries in all of the following ways EXCEPT that:

Correct AnswerverifiedShow Answer

The poverty threshold is defined as:

Correct AnswerverifiedShow Answer

If you were to provide an economic policy without knowing your own economic status, you would be operating:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThis is a notch because Jane would earn ...View AnswerShow Answer

In 2012, which of the following demographic groups had the HIGHEST poverty rate?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
This is a notch because Jane would earn ...
View Answer

Correct Answer
verified