Question 1

Economists study poverty and income inequality to answer which of the following questions?

Accepted Answer

A)   What are people's wages?
B)   How does labor-force experience affect wages?
C)   How much inequality is there in society?
D)   How do people adjust their behavior due to taxation?E) A) and D)
F) None of the above

Question 2

A disadvantage associated with in-kind transfers to reduce poverty is that they

Accepted Answer

A)   alter peoples' incentives, whereas a negative income tax does not alter peoples' incentives.
B)   do not allow poor families to make purchases based on their preferences.
C)   can only be distributed by the federal government.
D)   cannot restrict the group of recipients and some middle-class families may benefit from them.E) A) and D)
F) B) and C)

Question 3

Which political philosophy focuses on the process of determining the distribution of income rather than on the outcome?

Accepted Answer

A)   utilitarianism
B)   liberalism
C)   libertarianism
D)   welfarismE) A) and D)
F) B) and D)

Question 4

Pietro is 40 years old and is laid off from his job at the paper plant and borrows from his savings for 8 months until he finds a new job. Pietro's

Accepted Answer

A)   transitory income likely exceeds his permanent income for that year.
B)   borrowing is representative of a normal economic life cycle.
C)   permanent income is largely unaffected by this one time change to his income.
D)   economic mobility during this year is highly unusual, as US workers tend to stay in a particular income class.E) All of the above
F) A) and B)

Question 5

Income mobility studies suggest that poverty

Accepted Answer

A)   cannot be alleviated by privately sponsored anti-poverty programs.
B)   cannot be alleviated by government sponsored anti-poverty programs.
C)   is a long-term problem for a relatively large number of families.
D)   is not a long-term problem for most families.E) A) and D)
F) B) and C)

Question 6

The percentage of families with incomes below the poverty line

Accepted Answer

A)   is defined as the 10 percent of U.S.households with the lowest incomes.
B)   is known as the poverty rate.
C)   is known as the unemployment rate.
D)   rises as the general income level rises.E) B) and D)
F) A) and B)

Question 7

What is the term for a measure of happiness or satisfaction a person receives from his or her circumstances?

Accepted Answer

The answer of What is the term for a measure...

Question 8

U.S. income data over the last 75 years suggests that the distribution of income

Accepted Answer

A)   has gradually become more equal over the entire time period.
B)   has gradually become less equal over the entire time period.
C)   gradually became less equal until about 1970, then became more equal from 1970 to 2011.
D)   gradually became more equal until about 1970, then became less equal from 1970 to 2011.E) B) and D)
F) None of the above

Question 9

In 2011, the poverty line for a family of four in the U.S. was

Accepted Answer

A)   $60,974.
B)   $23,021.
C)   $20,988.
D)   $17,642.E) B) and C)
F) A) and D)

Question 10

A society consists of three individuals: Larry, Margaret, and Nina. In terms of income and utility, Larry is currently best-off, Margaret ranks in the middle, and Nina is worst-off. Which of the following statements is correct?

Accepted Answer

A)   Utilitarianism suggests that government policies should strive to maximize the sum of all three individuals' utility.
B)   Liberalism suggests that government policies should strive to maximize the sum of Larry's utility and Nina's utility.
C)   Libertarianism suggests that government policies should strive to make Nina better off at the cost of Larry and Margaret.
D)   Utilitarianism suggests that the government policies should strive to make Nina better off than Margaret.E) B) and C)
F) None of the above

Question 11

Scenario 20-5
Suppose the government implemented a negative income tax and used the following formula to compute a family's
tax liability:
Taxes owed = (1/4 of income)  - $10,000
-Refer to Scenario 20-5. A family earning $70,000 before taxes would have how much after-tax income?

Accepted Answer

A)   $7,500
B)   $52,500
C)   $62,500
D)   $77,500E) A) and B)
F) B) and C)

Question 12

Which of the following lists correctly ranks countries from most equal to least equal distribution of income?

Accepted Answer

A)   Nigeria, India, Mexico, Germany
B)   Brazil, United States, India, Japan
C)   United States, Ethiopia, Japan, South Africa
D)   Japan, India, United States, BrazilE) None of the above
F) B) and C)

Question 13

Figure 20-3 
-Refer to Figure 20-3. In 2011, the percent of adults between ages 18 and 64 in poverty is

Accepted Answer

A)   higher than both the percentage of children under age 18 and the percentage of elderly aged 65 and over in poverty.
B)   higher than the percentage of children under age 18 but is lower than the percentage of elderly aged 65 and over in poverty.
C)   is lower than the percentage of children under age 18 but is higher than the percentage of elderly aged 65 and over in poverty.
D)   is lower than the percentage of children under age 18 and is equal to the percentage of elderly aged 65 and over in poverty.E) A) and C)
F) All of the above

Question 14

Who said "The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of socialism is the equal sharing of miseries"?

Accepted Answer

The answer of Who said "The inherent vice of capitalism...

Question 15

In-kind transfers

Accepted Answer

A)   are cash payments given to the poor from the government.
B)   are available to citizens of all income levels, but usually only sought by the poor.
C)   are non-monetary items given to the poor.
D)   include food stamps, but not housing vouchers or medical services.E) B) and C)
F) A) and B)

Question 16

Suppose the government used the following formula to compute a family's tax liability: Taxes owed = 28% of income - $8,000. How much would a family that earned $20,000 owe?

Accepted Answer

A)   -$8,000
B)   -$2,400
C)   $0
D)   $2,400E) A) and C)
F) B) and C)

Question 17

Table 20-10
  *A Gini coefficient is a commonly used measure of income inequality, with values between 0 and 1 (0 corresponds to perfect equality whereby everyone has exactly the same income, and 1 corresponds to perfect inequality where one person has all the income, while everyone else has zero income) .
Source: The World Bank
-Refer to Table 20-10. Which country has the most unequal income distribution?

Accepted Answer

A)   Latvia
B)   Italy
C)   France
D)   SwedenE) None of the above
F) B) and C)

Question 18

Which philosopher claimed that the government should aim to maximize the well-being of the worst-off person in society?

Accepted Answer

The answer of Which philosopher claimed that the government should...

Question 19

Anti-poverty programs

Accepted Answer

A)   encourage saving among recipient groups.
B)   impose a very low marginal tax rate on income.
C)   are only made available to those with no other source of income.
D)   may discourage the poor from escaping poverty on their own.E) A) and D)
F) B) and C)

Question 20

If the value of in-kind transfers are taken into account, the number of families living in poverty in the United States would

Accepted Answer

A)   increase by about 1 percent.
B)   decrease by about 1 percent.
C)   decrease by about 5 percent.
D)   decrease by about 10 percent.E) None of the above
F) C) and D)

Exam 20: Income Inequality and Poverty

Scenario 20-5 Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability: Taxes owed = (1/4 of income) - $10,000 -Refer to Scenario 20-5. A family earning $70,000 before taxes would have how much after-tax income?

Correct Answer
verified

Who said "The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of socialism is the equal sharing of miseries"?

Correct Answer
verified

What is the term for a measure of happiness or satisfaction a person receives from his or her circumstances?

Correct Answer
verified

A society consists of three individuals: Larry, Margaret, and Nina. In terms of income and utility, Larry is currently best-off, Margaret ranks in the middle, and Nina is worst-off. Which of the following statements is correct?

Correct Answer
verified

Which political philosophy focuses on the process of determining the distribution of income rather than on the outcome?

Correct Answer
verified

Economists study poverty and income inequality to answer which of the following questions?

Correct Answer
verified

A disadvantage associated with in-kind transfers to reduce poverty is that they

Correct Answer
verified

Correct Answer
verified

In-kind transfers

Correct Answer
verified

Which philosopher claimed that the government should aim to maximize the well-being of the worst-off person in society?

Correct Answer
verified

In 2011, the poverty line for a family of four in the U.S. was

Correct Answer
verified

Anti-poverty programs

Correct Answer
verified

Which of the following lists correctly ranks countries from most equal to least equal distribution of income?

Correct Answer
verified

The percentage of families with incomes below the poverty line

Correct Answer
verified

U.S. income data over the last 75 years suggests that the distribution of income

Correct Answer
verified

Suppose the government used the following formula to compute a family's tax liability: Taxes owed = 28% of income - $8,000. How much would a family that earned $20,000 owe?

Correct Answer
verified

Pietro is 40 years old and is laid off from his job at the paper plant and borrows from his savings for 8 months until he finds a new job. Pietro's

Correct Answer
verified

If the value of in-kind transfers are taken into account, the number of families living in poverty in the United States would

Correct Answer
verified

Figure 20-3 -Refer to Figure 20-3. In 2011, the percent of adults between ages 18 and 64 in poverty is

Correct Answer
verified

Income mobility studies suggest that poverty

Correct Answer
verified

Exam 20: Income Inequality and Poverty

Scenario 20-5 Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability: Taxes owed = (1/4 of income) - $10,000 -Refer to Scenario 20-5. A family earning $70,000 before taxes would have how much after-tax income?

Correct AnswerverifiedShow Answer

Who said "The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of socialism is the equal sharing of miseries"?

Correct AnswerverifiedShow Answer

What is the term for a measure of happiness or satisfaction a person receives from his or her circumstances?

Correct AnswerverifiedShow Answer

A society consists of three individuals: Larry, Margaret, and Nina. In terms of income and utility, Larry is currently best-off, Margaret ranks in the middle, and Nina is worst-off. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Which political philosophy focuses on the process of determining the distribution of income rather than on the outcome?

Correct AnswerverifiedShow Answer

Economists study poverty and income inequality to answer which of the following questions?

Correct AnswerverifiedShow Answer

A disadvantage associated with in-kind transfers to reduce poverty is that they

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In-kind transfers

Correct AnswerverifiedShow Answer

Which philosopher claimed that the government should aim to maximize the well-being of the worst-off person in society?

Correct AnswerverifiedShow Answer

In 2011, the poverty line for a family of four in the U.S. was

Correct AnswerverifiedShow Answer

Anti-poverty programs

Correct AnswerverifiedShow Answer

Which of the following lists correctly ranks countries from most equal to least equal distribution of income?

Correct AnswerverifiedShow Answer

The percentage of families with incomes below the poverty line

Correct AnswerverifiedShow Answer

U.S. income data over the last 75 years suggests that the distribution of income

Correct AnswerverifiedShow Answer

Suppose the government used the following formula to compute a family's tax liability: Taxes owed = 28% of income - $8,000. How much would a family that earned $20,000 owe?

Correct AnswerverifiedShow Answer

Pietro is 40 years old and is laid off from his job at the paper plant and borrows from his savings for 8 months until he finds a new job. Pietro's

Correct AnswerverifiedShow Answer

If the value of in-kind transfers are taken into account, the number of families living in poverty in the United States would

Correct AnswerverifiedShow Answer

Figure 20-3 -Refer to Figure 20-3. In 2011, the percent of adults between ages 18 and 64 in poverty is

Correct AnswerverifiedShow Answer

Income mobility studies suggest that poverty

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified