Question_Doc13_15Dec_5th

1)The productivity standard for the distribution of income can be thought of as A) rewarding people according to their ability to produce useful goods.

B) benefiting only the least productive worker. C) proving that egalitarians are correct.

D) rewarding only the wealthy.

2)One productivity standard for income distribution stated in the text is

A)income distribution should be based on contribution to society's total output.

B)tax payments are higher for higher income people.

C)poor people pay too much in taxes.

D)the poor should contribute more to society.

3)The contributive standard (merit standard) for distributing income implies that A) income should be distributed equally.

B) income should be distributed according to need.

C) income should be distributed according to the marginal productivity of workers.

D) a transfer should be contributed to an individual above his or her contribution to net output.

4)The contributive standard of income distribution is met by

A)setting wages according to marginal productivity.

B)having a highly progressive income tax.

C)having the government determine all wages.

D)using local committees to determine the needs of families in the area.

5)The egalitarian principle of income refers to A) each person being paid differently.

B) each person receiving the same income. C) each person receiving tax breaks.

D) each person working the same number of hours.

6)"To each exactly the same" refers to

A)the productivity standard.

B)the free market doctrine.

C)the egalitarian principle.

D)the Lorenz curve.

7)A major problem with using the egalitarian principle to distribute income is that A) it would eliminate the incentives that rewards provide in an economic system. B) it is difficult to know when an equal distribution of income has been achieved. C) it would not be fair to the wealthy.

D) there exist no mechanisms to carry out such a scheme.

8)If income were distributed according to the egalitarian principle of "to each exactly the same," then one problem would be that

A) there would be little or no incentive for individuals to take risky, hazardous, or unpleasant jobs.

B) individuals would have an excess desire to invest in their own human capital. C) too many individuals would want to take risky jobs.

D) productivity levels would probably become too high.

9)The productivity standard says

A)that everyone should have exactly the same income.

B)that the age-earnings cycle should determine income.

C)that people should be compensated on the basis of what they produce.

D)that people should be compensated on the basis of their need.

10) The egalitarian principle refers to:

A)"To each according to her need."

B)"To each exactly the same."

C)"To each according to her productivity."

D)"To each according to his ability."

11)The merit standard refers to: A) "To each according to her need." B) "To each exactly the same."

C) "To each according to her productivity." D) "To each according to his ability."

12)The egalitarian principle says

A)that everyone should have exactly the same income.

B)that the age-earnings cycle should determine income.

C)that people should be compensated on the basis of what they produce.

D)that people should be compensated on the basis of their need.

13)The belief that everyone should have exactly the same amount of income is A) merit standard.

B) comparable-worth doctrine. C) egalitarian principle.

D) Lorenz principle.

14)If we were to pay everyone exactly the same income

A)there would be a large amount of economic growth.

B)there would be no incentive to invest in human capital.

C)more people would seek an education.

D)productivity would increase.

15)Which of the following is considered a contributive standard for the distribution of income? A) rewarding workers according to their productivity

B) rewarding workers according to their needs

C) rewarding workers according to the number of their dependents D) all of the above

16)If an employer pays employees according to the volume of business revenue they individually generate, then the employer is applying the

A) productivity standard. B) merit standard.

C) contributive standard. D) all of the above

17)Merit is judged by one's ability to produce

A)what is considered useful by society.

B)what is considered valuable by society.

C)what is considered beneficial to society.

D)all of the above

18) We measure a person's productive contribution in a market system by

A)the marginal factor cost theory of the firm.

B)the profit maximization theory of the firm.

C)the marginal revenue product theory of wage determination.

D)the egalitarian theory of wage determination.

19)Which of the distributive standards does NOT involve a value judgment? A) Productivity standard

B) Egalitarian standard C) Merit standard

D) All of the standards involve value judgments.

20)Which of the following is NOT a normative standard for income distribution? A) the productivity standard

B) the egalitarian principle

C) rewarding people according to merit

D) All of the above are normative standards.

21)If you believe that a worker should be paid on the basis of what he or she produced, you believe in

A) the egalitarian principle. B) the productivity standard. C) the benefits standard.

D) the comparative worth principle.

22)If you believe that all workers should be paid the same, you believe in the

A)egalitarian principle.

B)productivity standard.

C)benefits standard.

D)comparative worth principle.

23)The idea that the Lorenz curve should be along the 45 degree line is consistent with A) the productivity standard.

B) the egalitarian principle. C) the conservative principle. D) none of the above.

24)Which of the following is NOT correct regarding the theories of income distribution? A) Dealing with how income ought to be distributed is a normative issue.

B) The productivity standard for the distribution of income is stated "to each according to what they produce."

C) The egalitarian principle of income distribution is "to each exactly the same." D) Dealing with how income should be distributed is a positive economic issue.

25)"To each according to what he or she produces" describes the ________ theory of income determination.

A) productivity B) egalitarian C) equity

D) needs

26)A person's productive contribution in a capitalist society is measured by determining the A) market value of the individual's output.

B) comparable output of other workers in similar jobs. C) total number of goods produced by the individual. D) index of occupational values.

27)Explain the two theories of desired income distribution: the egalitarian principle and the productivity standard.

28)Compare and contrast the two normative standards to income distribution discussed in the text: The productivity standard and the egalitarian principle.

30.4 Poverty and Attempts to Eliminate It

1)The lowest percentage of the U.S. population in poverty is found when using which measurement of household resources?

A) Private income only

B) Private income plus cash benefits

C) Private income with cash and in-kind benefits

D) Private income with Social Security payments subtracted

2)The Social Security system is financed by

A)a tax on individual retirement accounts.

B)a payroll tax paid only by employers.

C)a payroll tax paid by both employers and employees.

D)a tax on luxury goods.

3)The Social Security system is a(n) A) ad valorem system.

B) ability to pay system. C) progressive tax system. D)pay-as-you-go system.

4)The government finances Social Security through A) excise taxes.

B) payroll taxes.

C) the sale of goods and services. D) state taxes.

5)Which of the following statements is correct?

A)The Social Security program funnels transfers from retired individuals to the youngest children of low-income families.

B)Social Security is an entitlement which is available to everyone, including those who have not contributed to the fund during their active work years.

C)Social Security benefits are received by people who had contributed to the fund during their active work years.

D)As a public transfer payment, Social Security benefit is available only to the poor.

6) The Social Security Fund is designed as

A)a pay-as-you-go system.

B)an investment portfolio that individual contributors can make periodic payments into.

C)an account that allows periodic withdrawals by contributors.

D)an individual account with a federal reserve bank.

7)Social Security is a pure transfer program because A) it transfers funds from current workers to the poor.

B) the government transfers funds from middle-income workers to welfare recipients. C) current payroll taxes are used to pay the eligible retirees.

D) the government subsidizes the medical bill of the poor.

8)Since Social Security is a pay-as-you-go program, the funds for the people retiring today A) come from those of us working today and in the future.

B) come from the Federal Reserve. C) come from import taxes.

D) come from foreign sales of gold.

9)The original impetus for Social Security was

A)to provide retirement fund for all persons.

B)to prevent future depressions.

C)the result of social engineering by politicians.

D)a proper response to the stock market crash of 1929.

10) The official poverty level is based on

A)total net worth.

B)pretax income, and includes cash subsidies but does not include in-kind subsidies such as food stamps.

C)after-tax income, and includes both cash and in-kind government subsidies.

D)wages and salaries, plus any unreported amounts of income from the underground economy.