1.In order to increase a society's total welfare, a production process that produces a negative externality should be _____.

taxed

encouraged to produce goods in excess of the socially optimum level

encouraged to produce in excess of the private optimum level

subsidized if the good is produced for foreign markets

subsidized if the good is produced for the domestic market

2.A major social insurance program in the United States is:

Social Security.

Temporary Assistance for Needy Families.

Supplemental Security Income.

Medicaid.

food stamps.

3.he lower the unemployment rate, the higher the poverty rate.

True

False

4.Using the Lorenz curve, the degree of income inequality is measured by:

the slope of the line connecting all points for which a given percentage of families receive exactly the cumulative percentage of income.

the distance of the Lorenz curve from the line of perfect equality.

the slope of the curve.

the number of times the Lorenz curve crosses the line of perfect equality.

dividing the number of people below the poverty line by the total population.

5.The most recent data on the distribution of income in the United States indicate households in the top fifth of the income distribution earn more than ten times as much income as those in the bottom fifth.

True

False

6.As welfare rolls declined during the late 1990s and early 2000s, _____.?

?states with stringent work requirements found that their federal grants also declined

?states with stringent work requirements were rewarded with larger federal grants

?few welfare recipients were able to find jobs

?welfare spending per recipient increased significantly

?states cut back on their provision of services such as job placement and child care

7.On an average, college graduates earn significantly more income than those with less education and the disparity tends to widen into middle age.?

True

False