Problem 5
Determine whether each of the scenarios is possible. [LO 21.3] a. A poverty rate based on a relative measure is high, income mobility is low, and there is perfect income equality. b. A poverty rate based on an absolute measure is high, income mobility is zero, and there is perfect income equality. c. A poverty rate based on an absolute measure is high, income mobility is high, and there is high income equality. d. There is no poverty based on a relative measure, income mobility is high, and there is perfect income equality.
Problem 7
Classify the following social policies based on the approach taken to alleviating poverty: economic development, safety nets, or redistribution. \([\mathrm{LO} 21.4]\) a. The government of Zimbabwe reorganizes property rights, giving traditionally marginalized black Zimbabweans access to land owned by white Zimbabweans. b. As part of a package called the GI Bill, the United States offered to pay the college tuition of newly returned veterans of World War II. c. The government of Chile privatizes its social security system. The new system sets up private accounts that require contributions of at least 10 percent of income. This money is invested by private actors and then returned to each person at retirement.
Problem 8
Imagine a person who makes \(\$ 400\) per week working 40 hours per week for 50 weeks of the year. She is currently eligible for a welfare program, available to people with income below \(\$ 21,000\), that gives her \(\$ 800\) a year. No such program is available to people with income above \(\$ 21,000\) per year. Her boss offers her a promotion that would increase her wage by 25 cents per hour. [LO 21.4] a. What is her total income before the promotion? b. What is her total income if she accepts the promotion? c. Should she accept the promotion if she wants to have higher income?
Problem 10
Which of the following are means-tested programs? [LO 21.5] a. A local public university starts to give financial aid to individuals who score above the 98th percentile on the SAT. b. The United Kingdom decides to start giving out pension benefits based on individuals' prior amount of savings. c. A government decides to give tax credits to anyone who purchases computers made domestically. d. Canada begins to pay half of the cost of public transportation for people who do not own a car.
Problem 12
Working women in the United States earn only three-quarters of what men earn. Consider each of the following explanations for this statistic, and say whether each could be true or must not be true in order to explain this fact. [LO 21.6] a. Women choose lower-paying professions (e.g., becoming a nurse rather than a doctor). b. Women are discriminated against when being considered for promotions or raises. c. Women are more educated and have more work experience than men, on average. d. Women are discriminated against in the hiring process. e. Women benefit from affirmative action in the hiring process.
Problem 13
Are the workings of the free market likely to encourage or discourage discrimination in the following examples? [LO 21.6] a. The musical director of a symphony orchestra that records but never performs in front of an audience refuses to hire female musicians. b. In apartheid South Africa (where racial discrimination was legal and popular among white voters for many decades), a white business owner refuses to hire black candidates to work in management positions dealing with white customers. c. In a Martian culture in which blue hair is considered the most beautiful, a Martian modeling agency preferentially hires bluehaired models.
