Question 1

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.

Accepted Answer

Means-tested programs are specifically designed to provide assistance only to those who meet specific income requirements or demonstrate that they otherwise lack the financial means to support themselves or their families. Temporary Assistance for Needy Families is an example of such a program.

Question 2

Poverty tends to be more prevalent for those over age 65 than for those under age 18.

Accepted Answer

Poverty rates are generally higher for children under age 18 than for those over age 65, largely due to social security and other retirement benefits that help reduce poverty rates among the elderly.

Question 3

In the United States, inequality has increased over the past 25 years, in part because of rapid technological change.

Accepted Answer

According to research from the Pew Research Center and other sources, income and wealth inequality in the United States has increased over the past several decades, with factors such as globalization and technological change contributing to this trend.

Question 4

Since about 1950, the share of income going to the richest 10% of Americans has steadily increased. What explains this trend?

Accepted Answer

The answer of Since about 1950, the share of income...

Question 5

Why do economists generally regard median income as a better measure of a typical American's well-being than mean income?

Accepted Answer

The answer of Why do economists generally regard median income...

Question 6

The individual mandate is the requirement that:

Accepted Answer

The individual mandate requires each individual to purchase health insurance or face a penalty. This was part of the Affordable Care Act (ACA), or Obamacare, in an effort to increase the number of people with health insurance coverage. The other options, A, B, and D, are not related to the individual mandate.

Question 7

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

Accepted Answer

The poverty threshold varies depending on the size and composition of a household. For example, the threshold for a family of four is different than the threshold for an individual.

Question 8

What are the fundamental differences between the Medicare and Medicaid programs?

Accepted Answer

The answer of What are the fundamental differences between the...

Question 9

What are some of the causes of poverty in the United States?

Accepted Answer

The answer of What are some of the causes of...

Question 10

How do poverty programs differ from social insurance programs?

Accepted Answer

The answer of How do poverty programs differ from social...

Question 11

People with more education have a lower poverty rate.

Accepted Answer

Studies have consistently shown that those with higher levels of education have a lower risk of poverty than those with less education. Higher education leads to greater employment opportunities, higher salaries, and more job security, all of which help to reduce poverty.

Question 12

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.

Accepted Answer

Technological advancements have led to the automation of many low-skilled jobs, thus reducing the demand for unskilled labor. At the same time, the increasing use of technology in industries such as healthcare, finance, and engineering has created a greater demand for skilled workers who can effectively operate and maintain these technologies.

Question 13

Explain what is meant by the adverse selection problem, which has the potential to doom a private health insurance company to failure.

Accepted Answer

The answer of Explain what is meant by the adverse...

Question 14

To ensure that low and middle income families have health insurance, the Affordable Care Act of 2010 _____ low- and middle-income families _____.

Accepted Answer

The Affordable Care Act provides government subsidies to low- and middle-income families to make insurance more affordable, rather than requiring them to be covered by Medicare or Medicaid or forcing them to find employers that provide insurance.

Question 15

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

Accepted Answer

Poverty can be measured in absolute terms, such as the lack of access to basic necessities like food, shelter, and healthcare, and in relative terms, such as having a lower income or standard of living compared to the rest of society.

Question 16

The problem with community rating is that it:

Accepted Answer

Community rating may cause adverse selection, as individuals who are sicker may be more likely to purchase insurance, leading to higher overall costs for the insurance pool. This can lead to insurers either raising premiums, reducing benefits, or withdrawing from the market altogether.

Question 17

Critics of traditional welfare programs often cite a disincentive to work as a flaw in the policy. Why would these critics be in favor of the Earned Income Tax Credit (EITC)? And why is the EITC described as a negative income tax?

Accepted Answer

The answer of Critics of traditional welfare programs often cite...

Question 18

A negative income tax is levied on firms even if they have negative income.

Accepted Answer

A negative income tax is a form of social welfare system where people receive money from the government if their income falls below a certain level. It is not levied on firms, but instead is a transfer of funds from the government to individuals.

Question 19

How have advancements in medicine contributed to the soaring cost of health care in the United States? Isn't medical progress a good thing?

Accepted Answer

The answer of How have advancements in medicine contributed to...

Question 20

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

The answer of Jane works part-time and earns $11,000 per...

Quiz 18: The Economics of the Welfare