Question 1

The lack of progress in reducing the poverty rate since the early 1970s is most closely related with which of the following factors?

Accepted Answer

A) increasing income inequality 
B) a reduction in the poverty line 
C) rapid economic growth 
D) a reduction in international trade 
A) increasing income inequality 
B) a reduction in the poverty line 
C) rapid economic growth 
D) a reduction in international trade A

Question 2

Data for the United States suggests that about how many millionaires inherited their fortunes?

Accepted Answer

A) one in seven 
B) one in five 
C) one in three 
D) one in two 
A) one in seven 
B) one in five 
C) one in three 
D) one in two B

Question 3

Figure 20-4  
-Refer to Figure 20-4. The ratio of female-to-male earnings has increased steadily from about 1980 to 2008 because the earnings of men

Accepted Answer

A) increased steadily but by approximately half of the increase in the earnings of women. 
B) decreased while the earnings of women increased. 
C) stayed relatively constant while the earnings of women increased. 
D) decreased by substantially more than the decrease in the earnings of women. 
A) increased steadily but by approximately half of the increase in the earnings of women. 
B) decreased while the earnings of women increased. 
C) stayed relatively constant while the earnings of women increased. 
D) decreased by substantially more than the decrease in the earnings of women. C

Question 4

Scenario 20-2
The government is proposing switching from a progressive tax system, in which families pay 15% of the first $40,000 earned, 30% of the next $40,000 earned, and 45% of any income over $80,000 to a tax system in which every family pays 1/4 of its income regardless of how much they earn and all income redistribution is eliminated. That is, the tax revenue generated is used only for infrastructure, public administration, and national defense.
-Refer to Scenario 20-2. Which philosopher would be most in favor of the proposed change in tax policy?

Accepted Answer

A) Jeremy Bentham 
B) John Stuart Mill 
C) John Rawls 
D) Robert Nozick 
A) Jeremy Bentham 
B) John Stuart Mill 
C) John Rawls 
D) Robert Nozick

Question 5

A common criticism of welfare programs is that they

Accepted Answer

A) create self-reliant individuals. 
B) encourage strong family values. 
C) encourage illegitimate births. 
D) have increasing benefits over time, in real terms. 
A) create self-reliant individuals. 
B) encourage strong family values. 
C) encourage illegitimate births. 
D) have increasing benefits over time, in real terms.

Question 6

One existing government program that works much like a negative income tax is Medicaid.

Accepted Answer

A) True 
 B)False

Question 7

Table 20-1
The following table shows the distribution of income in Marysville.  
-Refer to Table 20-1. Fifty percent of all families have incomes below what level?

Accepted Answer

A) $30,000 
B) $60,000 
C) $90,000 
D) There is insufficient information to answer this question. 
A) $30,000 
B) $60,000 
C) $90,000 
D) There is insufficient information to answer this question.

Question 8

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, Brazil 
A) Nigeria, India, Mexico, Germany 
B) Brazil, United States, India, Japan 
C) United States, Ethiopia, Japan, South Africa 
D) Japan, India, United States, Brazil

Question 9

Scenario 20-7
Zooey is a single mother of two young children whose husband died in a tragic car accident. She earns $20,000 per year working as a cashier at a grocery store. The government uses a negative income tax system in which
Taxes owed = (1/4 of income) - $15,000.
-Refer to Scenario 20-7. One of Zooey's friends tells her she would have more money for the year if she quit her job and filed her tax return with $0 in income. Is her friend correct? Why or why not?

Accepted Answer

No, she would have $

Question 10

Scenario 20-8
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) - $14,000
​
​
-The ancient Greek philosopher, Plato, concluded that in an ideal society the income of the richest person

Accepted Answer

A) would be equal to the income of the poorest person. 
B) would be no more than four times the income of the poorest person. 
C) would be reflective of the effort put forth by that person. 
D) would be taxed at a higher rate than the income of the poorest person. 
A) would be equal to the income of the poorest person. 
B) would be no more than four times the income of the poorest person. 
C) would be reflective of the effort put forth by that person. 
D) would be taxed at a higher rate than the income of the poorest person.

Question 11

About half of black and Hispanic children in female-headed households live in poverty.

Accepted Answer

A) True 
 B)False

Question 12

Table 20-14
James, Luke, Peter, Micah, and Sarah are the only five inhabits of Marketsville. The following table shows their income.   ​
​
-Refer to Table 20-14. According to the table, what percentage of individuals in Marketsville have an income below $64,000?

Accepted Answer

A) 20 percent 
B) 40 percent 
C) 60 percent 
D) 80 percent 
A) 20 percent 
B) 40 percent 
C) 60 percent 
D) 80 percent

Question 13

Scenario 20-7
Zooey is a single mother of two young children whose husband died in a tragic car accident. She earns $20,000 per year working as a cashier at a grocery store. The government uses a negative income tax system in which
Taxes owed = (1/4 of income) - $15,000.
-Refer to Scenario 20-7. Zooey's brother Zander owes $10,000 in taxes. How much does he earn?

Accepted Answer

The answer of Scenario 20-7
Zooey is a single mother of...

Question 14

The distribution of income for Dismal is as follows:   If the poverty rate in Dismal is 50 percent, what is the poverty line in Dismal?

Accepted Answer

A) $10,000. 
B) $20,000. 
C) $30,000. 
D) $40,000. 
A) $10,000. 
B) $20,000. 
C) $30,000. 
D) $40,000.

Question 15

The federal government sets the poverty line at roughly

Accepted Answer

A) five times the cost of providing an adequate diet. 
B) four times the cost of providing an adequate diet. 
C) three times the cost of providing an adequate diet. 
D) two times the cost of providing an adequate diet. 
A) five times the cost of providing an adequate diet. 
B) four times the cost of providing an adequate diet. 
C) three times the cost of providing an adequate diet. 
D) two times the cost of providing an adequate diet.

Question 16

The distribution of income for Abbyville is as follows:   If the poverty rate in Abbyville is 12 percent, what is the poverty line in Abbyville?

Accepted Answer

A) $15,000. 
B) $20,000. 
C) $25,000. 
D) $30,000. 
A) $15,000. 
B) $20,000. 
C) $25,000. 
D) $30,000.

Question 17

Libertarians believe that

Accepted Answer

A) the government should choose just policies as evaluated by an impartial observer behind a "veil of ignorance." 
B) the government should aim to maximize the well-being of the worst-off person in society. 
C) everyone in society should have equal utility. 
D) the government should not redistribute income. 
A) the government should choose just policies as evaluated by an impartial observer behind a "veil of ignorance." 
B) the government should aim to maximize the well-being of the worst-off person in society. 
C) everyone in society should have equal utility. 
D) the government should not redistribute income.

Question 18

In 2011, what percentage of U.S. families had income levels above $115,866?

Accepted Answer

A) 10 percent 
B) 20 percent 
C) 60 percent 
D) 80 percent 
A) 10 percent 
B) 20 percent 
C) 60 percent 
D) 80 percent

Question 19

Comparing the United States household income distribution to other countries is

Accepted Answer

A) easy, because data is available for all countries in the world. 
B) easy, because some countries collect data on expenditures instead of incomes. 
C) problematic, because international agreements require countries to standardize their income accounting procedures. 
D) problematic, because countries collect data in different ways. 
A) easy, because data is available for all countries in the world. 
B) easy, because some countries collect data on expenditures instead of incomes. 
C) problematic, because international agreements require countries to standardize their income accounting procedures. 
D) problematic, because countries collect data in different ways.

Question 20

Figure 20-2  
-Refer to Figure 20-2. Which of the following is consistent with the data reported in the figure?

Accepted Answer

A) The female poverty rate is higher for all age groups than the male poverty rate. 
B) The disparity between male and female poverty increases with age. 
C) Neither a nor b are correct. 
D) Both a and b are correct. 
A) The female poverty rate is higher for all age groups than the male poverty rate. 
B) The disparity between male and female poverty increases with age. 
C) Neither a nor b are correct. 
D) Both a and b are correct.

The lack of progress in reducing the poverty rate since the early 1970s is most closely related with which of the following factors?

Data for the United States suggests that about how many millionaires inherited their fortunes?

Figure 20-4 -Refer to Figure 20-4. The ratio of female-to-male earnings has increased steadily from about 1980 to 2008 because the earnings of men

A common criticism of welfare programs is that they

One existing government program that works much like a negative income tax is Medicaid.

Table 20-1 The following table shows the distribution of income in Marysville. -Refer to Table 20-1. Fifty percent of all families have incomes below what level?

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

Scenario 20-8 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) - $14,000 -The ancient Greek philosopher, Plato, concluded that in an ideal society the income of the richest person

About half of black and Hispanic children in female-headed households live in poverty.

Table 20-14 James, Luke, Peter, Micah, and Sarah are the only five inhabits of Marketsville. The following table shows their income. -Refer to Table 20-14. According to the table, what percentage of individuals in Marketsville have an income below $64,000?

The distribution of income for Dismal is as follows: If the poverty rate in Dismal is 50 percent, what is the poverty line in Dismal?

The federal government sets the poverty line at roughly

The distribution of income for Abbyville is as follows: If the poverty rate in Abbyville is 12 percent, what is the poverty line in Abbyville?

Libertarians believe that

In 2011, what percentage of U.S. families had income levels above $115,866?

Comparing the United States household income distribution to other countries is

Figure 20-2 -Refer to Figure 20-2. Which of the following is consistent with the data reported in the figure?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

The Theory of Consumer Choice

Frontiers in Microeconomics

Filters

Exam 20: Income Inequality and Poverty

The lack of progress in reducing the poverty rate since the early 1970s is most closely related with which of the following factors?

Data for the United States suggests that about how many millionaires inherited their fortunes?

Figure 20-4 -Refer to Figure 20-4. The ratio of female-to-male earnings has increased steadily from about 1980 to 2008 because the earnings of men

A common criticism of welfare programs is that they

One existing government program that works much like a negative income tax is Medicaid.

Table 20-1 The following table shows the distribution of income in Marysville. -Refer to Table 20-1. Fifty percent of all families have incomes below what level?

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

Scenario 20-8 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) - $14,000 ​ ​ -The ancient Greek philosopher, Plato, concluded that in an ideal society the income of the richest person

About half of black and Hispanic children in female-headed households live in poverty.

Table 20-14 James, Luke, Peter, Micah, and Sarah are the only five inhabits of Marketsville. The following table shows their income. ​ ​ -Refer to Table 20-14. According to the table, what percentage of individuals in Marketsville have an income below $64,000?

The distribution of income for Dismal is as follows: If the poverty rate in Dismal is 50 percent, what is the poverty line in Dismal?

The federal government sets the poverty line at roughly

The distribution of income for Abbyville is as follows: If the poverty rate in Abbyville is 12 percent, what is the poverty line in Abbyville?

Libertarians believe that

In 2011, what percentage of U.S. families had income levels above $115,866?

Comparing the United States household income distribution to other countries is

Figure 20-2 -Refer to Figure 20-2. Which of the following is consistent with the data reported in the figure?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

The Theory of Consumer Choice

Frontiers in Microeconomics

Filters

Scenario 20-8 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) - $14,000 -The ancient Greek philosopher, Plato, concluded that in an ideal society the income of the richest person

Table 20-14 James, Luke, Peter, Micah, and Sarah are the only five inhabits of Marketsville. The following table shows their income. -Refer to Table 20-14. According to the table, what percentage of individuals in Marketsville have an income below $64,000?