Question 1

Negative income tax plans have the advantage of increasing work incentives in comparison to existing welfare programs without work incentives.

Accepted Answer

A) True 
 B)False

Question 2

Exhibit 12-8 Negative income tax for a family  
-Starting in 1964, the U.S. government has defined the poverty line as income at or below ________ the amount of money needed to buy a minimum diet for all family members.

Accepted Answer

A)  two times 
B)  three times 
C)  four times 
D)  five times 
A)  two times 
B)  three times 
C)  four times 
D)  five times

Question 3

If a country finds that its Lorenz curve is moving further away from the diagonal, this means its income is becoming more unevenly distributed over time.

Accepted Answer

A) True 
 B)False

Question 4

Negative income tax plans have the disadvantage of decreasing work incentives in comparison to existing welfare programs without work incentives.

Accepted Answer

A) True 
 B)False

Question 5

Official figures indicate that the percentage of persons below the poverty level in the U.S. is more today than it was in 1959.

Accepted Answer

A) True 
 B)False

Question 6

Exhibit 12-7 Negative income tax  
-As shown in Exhibit 12-7, a family of four with no earned income receives ____ from the government.

Accepted Answer

A)  zero payment. 
B)  the break-even income of $40,000. 
C)  a $20,000 payment. 
D)  a $20,000 tax deferment. 
A)  zero payment. 
B)  the break-even income of $40,000. 
C)  a $20,000 payment. 
D)  a $20,000 tax deferment.

Question 7

Which one of the following examples is a cash assistance program used to fight poverty in the United States?

Accepted Answer

A)  Medicaid. 
B)  SNAP (food stamps). 
C)  Home energy assistance. 
D)  Head Start. 
E)  Temporary Assistance to Needy Families (TANF). 
A)  Medicaid. 
B)  SNAP (food stamps). 
C)  Home energy assistance. 
D)  Head Start. 
E)  Temporary Assistance to Needy Families (TANF).

Question 8

Which of the following government programs provides recipients with in-kind benefits?

Accepted Answer

A)  Temporary Assistance to Needy Families (TANF). 
B)  Social Security. 
C)  The food stamp program (SNAP). 
D)  Unemployment compensation. 
A)  Temporary Assistance to Needy Families (TANF). 
B)  Social Security. 
C)  The food stamp program (SNAP). 
D)  Unemployment compensation.

Question 9

Since 1959 the fraction of persons below the poverty line has fallen.

Accepted Answer

A) True 
 B)False

Question 10

Exhibit 12-9 Negative Income Tax   ​
-As shown in Exhibit 12-9, a family of four does not pay income taxes at:

Accepted Answer

A)  an income of $25,000. 
B)  any income between zero and $20,000. 
C)  all levels of income. 
D)  any income above $20,000. 
A)  an income of $25,000. 
B)  any income between zero and $20,000. 
C)  all levels of income. 
D)  any income above $20,000.

Question 11

Exhibit 12-4 Lorenz curve  
-As shown in Exhibit 12-4, the perfect equality line is drawn between points:

Accepted Answer

A)  W and Y along the curve. 
B)  X and Z. 
C)  W and Y along the straight line. 
D)  W and X. 
A)  W and Y along the curve. 
B)  X and Z. 
C)  W and Y along the straight line. 
D)  W and X.

Question 12

Which of the following is a result of discrimination?

Accepted Answer

A)  Two groups of workers earning different wages. 
B)  Two groups of workers paid the same wage, but proportionally fewer of one group are employed. 
C)  Equal pay and equal employment opportunities for two groups of workers with different productivities. 
D)  No workers from a particular group are employed. 
A)  Two groups of workers earning different wages. 
B)  Two groups of workers paid the same wage, but proportionally fewer of one group are employed. 
C)  Equal pay and equal employment opportunities for two groups of workers with different productivities. 
D)  No workers from a particular group are employed.

Question 13

When determining whether a family's income is below the official poverty rate, non-cash benefits from the government, such as food stamps, housing and medical benefits, are also included.

Accepted Answer

A) True 
 B)False

Question 14

Exhibit 12-1 Income distribution for three countries $$\begin{array} { | l | c | c | c | } 
\hline \text { Quintile } & \text { Country I (\%) } & \text { Country II (\%) } & \text { Country III (\%) } \
\hline\text { Poorest } & 6 & 8 & 4 \
\text { Second } & 12 & 12 & 8 \
\text { Third } & 15 & 15 & 10 \
\text { Fourth } & 27 & 30 & 30 \
\text { Richest } & 40 & 35 & 48 \
\hline
\end{array}$$
-Exhibit 12-1 shows the percentage of income received by each population quintile. In Country III, we can conclude that the:

Accepted Answer

A)  majority of the people receive the majority of the income. 
B)  richest 20 percent of the population received 75 percent of the economy's income. 
C)  richest 20 percent of the population received 78 percent of the economy's income. 
D)  richest 40 percent of the population received 78 percent of the economy's income. 
E)  least-wealthy 40 percent of the population received 78 percent of the economy's income. 
A)  majority of the people receive the majority of the income. 
B)  richest 20 percent of the population received 75 percent of the economy's income. 
C)  richest 20 percent of the population received 78 percent of the economy's income. 
D)  richest 40 percent of the population received 78 percent of the economy's income. 
E)  least-wealthy 40 percent of the population received 78 percent of the economy's income.

Question 15

Which of the following might increase the supply curve of labor?

Accepted Answer

A)  Increasing licensing requirements. 
B)  Increasing discrimination against females. 
C)  Increasing discrimination against blacks. 
D)  All of the above. 
E)  None of the above. 
A)  Increasing licensing requirements. 
B)  Increasing discrimination against females. 
C)  Increasing discrimination against blacks. 
D)  All of the above. 
E)  None of the above.

Question 16

Which of the following statements is correct?

Accepted Answer

A)  About 25 percent of the U.S. population earns an income below the poverty line. 
B)  About 50 percent of blacks earn an income below the poverty line. 
C)  Since 1980 the fraction of persons below the poverty level has risen sharply. 
D)  None of these. 
A)  About 25 percent of the U.S. population earns an income below the poverty line. 
B)  About 50 percent of blacks earn an income below the poverty line. 
C)  Since 1980 the fraction of persons below the poverty level has risen sharply. 
D)  None of these.

Question 17

If 80 percent of the population receives 75 percent of the income,

Accepted Answer

A)  the richest quintile receives 20 percent of the income. 
B)  the Lorenz curve is the diagonal. 
C)  income is not perfectly evenly distributed. 
D)  the poorest quintile receives more than 20 percent of income. 
E)  people in the middle quintile have the highest incomes. 
A)  the richest quintile receives 20 percent of the income. 
B)  the Lorenz curve is the diagonal. 
C)  income is not perfectly evenly distributed. 
D)  the poorest quintile receives more than 20 percent of income. 
E)  people in the middle quintile have the highest incomes.

Question 18

One of the main tools used by economists to measure the actual distribution of income is the:

Accepted Answer

A)  Lorenz curve. 
B)  Golden Rule. 
C)  MR = MC rule. 
D)  MRP = MRC rule. 
A)  Lorenz curve. 
B)  Golden Rule. 
C)  MR = MC rule. 
D)  MRP = MRC rule.

Question 19

Exhibit 12-7 Negative income tax  
-As shown in Exhibit 12-7, a family of four pays income taxes at:

Accepted Answer

A)  an income of $5,000. 
B)  any income between zero and $40,000. 
C)  all levels of income. 
D)  any income above $40,000. 
A)  an income of $5,000. 
B)  any income between zero and $40,000. 
C)  all levels of income. 
D)  any income above $40,000.

Question 20

The Lorenz curve shows the:

Accepted Answer

A)  growth of income over time compared to potential growth of income. 
B)  relative percentage of income going to each of the resources. 
C)  demand for unskilled versus unskilled labor. 
D)  actual cumulative percentage of income received compared to a perfectly equal cumulative percentages of income. 
A)  growth of income over time compared to potential growth of income. 
B)  relative percentage of income going to each of the resources. 
C)  demand for unskilled versus unskilled labor. 
D)  actual cumulative percentage of income received compared to a perfectly equal cumulative percentages of income.

Negative income tax plans have the advantage of increasing work incentives in comparison to existing welfare programs without work incentives.

Exhibit 12-8 Negative income tax for a family -Starting in 1964, the U.S. government has defined the poverty line as income at or below ________ the amount of money needed to buy a minimum diet for all family members.

If a country finds that its Lorenz curve is moving further away from the diagonal, this means its income is becoming more unevenly distributed over time.

Negative income tax plans have the disadvantage of decreasing work incentives in comparison to existing welfare programs without work incentives.

Official figures indicate that the percentage of persons below the poverty level in the U.S. is more today than it was in 1959.

Exhibit 12-7 Negative income tax -As shown in Exhibit 12-7, a family of four with no earned income receives ____ from the government.

Which one of the following examples is a cash assistance program used to fight poverty in the United States?

Which of the following government programs provides recipients with in-kind benefits?

Since 1959 the fraction of persons below the poverty line has fallen.

Exhibit 12-9 Negative Income Tax -As shown in Exhibit 12-9, a family of four does not pay income taxes at:

Exhibit 12-4 Lorenz curve -As shown in Exhibit 12-4, the perfect equality line is drawn between points:

Which of the following is a result of discrimination?

When determining whether a family's income is below the official poverty rate, non-cash benefits from the government, such as food stamps, housing and medical benefits, are also included.

Which of the following might increase the supply curve of labor?

Which of the following statements is correct?

If 80 percent of the population receives 75 percent of the income,

One of the main tools used by economists to measure the actual distribution of income is the:

Exhibit 12-7 Negative income tax -As shown in Exhibit 12-7, a family of four pays income taxes at:

The Lorenz curve shows the:

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters

Exam 12: Income Distribution, Poverty, and Discrimination

Negative income tax plans have the advantage of increasing work incentives in comparison to existing welfare programs without work incentives.

Exhibit 12-8 Negative income tax for a family -Starting in 1964, the U.S. government has defined the poverty line as income at or below ________ the amount of money needed to buy a minimum diet for all family members.

If a country finds that its Lorenz curve is moving further away from the diagonal, this means its income is becoming more unevenly distributed over time.

Negative income tax plans have the disadvantage of decreasing work incentives in comparison to existing welfare programs without work incentives.

Official figures indicate that the percentage of persons below the poverty level in the U.S. is more today than it was in 1959.

Exhibit 12-7 Negative income tax -As shown in Exhibit 12-7, a family of four with no earned income receives ____ from the government.

Which one of the following examples is a cash assistance program used to fight poverty in the United States?

Which of the following government programs provides recipients with in-kind benefits?

Since 1959 the fraction of persons below the poverty line has fallen.

Exhibit 12-9 Negative Income Tax ​ -As shown in Exhibit 12-9, a family of four does not pay income taxes at:

Exhibit 12-4 Lorenz curve -As shown in Exhibit 12-4, the perfect equality line is drawn between points:

Which of the following is a result of discrimination?

When determining whether a family's income is below the official poverty rate, non-cash benefits from the government, such as food stamps, housing and medical benefits, are also included.

Which of the following might increase the supply curve of labor?

Which of the following statements is correct?

If 80 percent of the population receives 75 percent of the income,

One of the main tools used by economists to measure the actual distribution of income is the:

Exhibit 12-7 Negative income tax -As shown in Exhibit 12-7, a family of four pays income taxes at:

The Lorenz curve shows the:

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters

Exhibit 12-9 Negative Income Tax -As shown in Exhibit 12-9, a family of four does not pay income taxes at: