1. Social Security & Medicare programs are sometimes known as:

a. Social extensions.

b. Entitlement programs.

c. Free money

d. Bonus programs.

e. Compensation programs.

2. A major difference between social insurance and income assistance programs is that:

a. Social insurance program are run by the states, and income assistance programs are fun by the federal government.

b. Funding for social insurance programs comes exclusively from the federal government, while income assistance programs are funded both at the state and federal levels.

c. Payments in social insurance programs are related to previous contribution to the programs, while payments in income assistance programs are not.

d. Social insurance programs are available only to households with children.

e. Income assistance programs are available only to households without children.

3. If a person’s wage decreases: (Hint: Where would you spend most of your time if unemployed?)

a. His marginal value product curve will shift to the left.

b. His marginal value product curve will shift to the right.

c. There will be a movement to the northwest along the marginal value product curve.

d. There will be more household work done or time spent at leisure

e. The slope of the marginal value product curve will increase.

4. The primary reason that poverty declined is:

a. Strong economic growth.

b. A decrease in discrimination.

c. An increase in welfare programs.

d. An increase in social insurance programs.

e. An increase in the inflation rate.

5. The wage gap between minority and non-minority workers:

a. Is zero when you control for education.

b. Is higher.

c. Has decreased only among males.

d. Has decreased somewhat when there is a growing economy and more jobs.

e. Has increased among full-time workers.

6. Which is not a group that supports the special interests of the elderly?

a. The elderly themselves

b. The relatives of the elderly

c. American Assoc of Retired Persons (AARP)

d. Doctors and nursing home operators

e. The Generation Xers’

7. If cheating can be identified easily and firms play the same game against one another repeatedly:

a. cheating is more likely to occur.

b. implicit collusion is more likely to occur.

c. firms have a stronger incentive to cheat than they would if cheating could not be identified.

d. firms have the same incentive to cheat.