1. "From each according to his ability; to each according to what he or she produces," is an example of:
a. a democratic standard toward income distribution.
b. a Lorenz standard toward income distribution.
c. an egalitarian principle toward income distribution.
d. a productivity standard toward income distribution.
2. Which of the following is not a reason for rising health care costs?
a. An aging population.
b. Higher-quality technologies for diagnosing and treating health problems.
c. Preventive techniques that lead to a shortage of patients forcing health care providers to increase costs.
d. Third party financing of medical insurance.
3. Which of the following is not an approach to measuring poverty?
a. A measure that defines poverty in terms of income levels relative to the rest of the population.
b. The relative poverty standard that says that poverty exists as long as the distribution of incomes is unequal.
c. The absolute poverty standard, a specific unchanging real income level.
d. The marginal poverty standard that looks at the marginal increases in income.
4. Which of the following are explanations for income differences?
a. The age-earnings cycle.
b. Inheritance.
c. Discrimination.
d. Different marginal productivity between individuals.
e. All of the above.
5. How is a Lorenz curve used to represent a nation's income distribution?
a. The closer the Lorenz curve is to a straight line, the more unequal the distribution of income.
b. The closer the Lorenz curve is to a straight line, the more equal the distribution of income.
c. Te more bowed the curve, the more equal the distribution of income.
d. The more bowed the curve, the more unequal the distribution of income over one's lifetime
6. Which of the following statements about the way the government measures poverty is correct?
a. Measures include wage income but not self-employed earnings.
b. Measures are based on after-tax income.
c. Measures are based on pre-tax income and do not include transfer payments.
d. Transfer payments are not included in poverty measures but in-kind payments are included.
7. Which of the following is probably the most significant reason why people have different marginal productivities?
a. People have different rates of taxation.
b. People have different comparable worths.
c. People have different investment in human capital.
d. People have different inheritances.
8. What is the major difference between the productivity standard and the egalitarian principle?
a. The egalitarian principle bases income according to the contribution to society's total output while the productivity standard bases income on the ideal of equality for everyone.
b. The productivity standard bases income according to the contribution to society's total output while the egalitarian principle bases income on the ideal of equality for everyone.
c. The productivity standard is a measure of income while the egalitarian principle is a measure of poverty.
d. The productivity standard bases income on a person's contribution to output while the egalitarian principle bases income on marginal revenue product.
9. According to the Lorenz curve of income distribution, overall between 1929 and 2005 the U.S. distribution of income has:
a. moved slightly toward becoming more equal.
b. moved slightly toward becoming more unequal
c. moved significantly toward becoming more equal.
d. moved significantly toward becoming more unequal.
10. For the United States, the distribution of income would be more equal if:
a. income in-kind was counted as income.
b. the distribution of age was less equal.
c. before-tax income was used instead of after-tax income.
d. wealth was used instead of income.
11. Moral hazard is a problem in health care due to:
a. new technologies.
b. an aging population.
c. third-party financing.
d. demographic changes.