Question 1

Which of the following groups has the lowest poverty rate?

Accepted Answer

A) blacks 
B) Asians 
C) children (under age 18) 
D) female households, no spouse present 
A) blacks 
B) Asians 
C) children (under age 18) 
D) female households, no spouse present

Question 2

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. 
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.

Question 3

When we compare the income distribution of the United States to those of other countries, we find that the U.S. has

Accepted Answer

A) an income distribution similar to Japan's. 
B) an income distribution similar to South Africa's. 
C) one of the most unequal income distributions. 
D) a bit more inequality than the typical country. 
A) an income distribution similar to Japan's. 
B) an income distribution similar to South Africa's. 
C) one of the most unequal income distributions. 
D) a bit more inequality than the typical country.

Question 4

Standard measurements of the degree of income inequality take both money income and in-kind transfers into account.

Accepted Answer

A) True 
 B)False

Question 5

Critics of the minimum wage argue that

Accepted Answer

A) labor demand is inelastic so firms can adjust production. 
B) too many older employees benefit at the expense of teenage workers. 
C) many minimum-wage earners are teenagers from middle-class families. 
D) All of the above are correct. 
A) labor demand is inelastic so firms can adjust production. 
B) too many older employees benefit at the expense of teenage workers. 
C) many minimum-wage earners are teenagers from middle-class families. 
D) All of the above are correct.

Question 6

John Rawls, who developed the way of thinking called liberalism, argued that government policies should be aimed at maximizing the sum of utility of everyone in society.

Accepted Answer

A) True 
 B)False

Question 7

People can borrow and lend money to smooth out short term variations in income known as what kind of changes?

Accepted Answer

The answer of People can borrow and lend money to...

Question 8

In the U.S. economy, labor earnings make up about

Accepted Answer

A) one-half of total income. 
B) two-thirds of total income. 
C) three-fourths of total income. 
D) nine-tenths of total income. 
A) one-half of total income. 
B) two-thirds of total income. 
C) three-fourths of total income. 
D) nine-tenths of total income.

Question 9

A common criticism of government programs that are designed to assist the poor is that

Accepted Answer

A) those who receive assistance rarely meet the criterion for eligibility. 
B) the majority of those below the poverty line refuse to accept government assistance. 
C) they create incentives for people to become "needy." 
D) they typically account for a majority of annual government expenditures. 
A) those who receive assistance rarely meet the criterion for eligibility. 
B) the majority of those below the poverty line refuse to accept government assistance. 
C) they create incentives for people to become "needy." 
D) they typically account for a majority of annual government expenditures.

Question 10

The distribution of income for Inequalia is as follows:   If the poverty rate in Inequalia is 25 percent, what is the poverty line in Inequalia?

Accepted Answer

A) $5,000 
B) $10,000 
C) $15,000 
D) $20,000 
A) $5,000 
B) $10,000 
C) $15,000 
D) $20,000

Question 11

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) Sweden 
A) Latvia 
B) Italy 
C) France 
D) Sweden

Question 12

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. Below what level of income would families start to receive a subsidy from this negative income tax?

Accepted Answer

A) $10,000 
B) $25,000 
C) $40,000 
D) $50,000 
A) $10,000 
B) $25,000 
C) $40,000 
D) $50,000

Question 13

The invisible hand of the marketplace acts to allocate resources

Accepted Answer

A) efficiently but does not necessarily ensure that resources are allocated fairly. 
B) both fairly and efficiently. 
C) fairly but does not necessarily ensure that resources are allocated efficiently. 
D) neither fairly nor efficiently. 
A) efficiently but does not necessarily ensure that resources are allocated fairly. 
B) both fairly and efficiently. 
C) fairly but does not necessarily ensure that resources are allocated efficiently. 
D) neither fairly nor efficiently.

Question 14

Table 20-3
The Distribution of Income in Edgerton  
-Refer to Table 20-3. According to the table, what percent of families in Edgerton have income levels below $76,000?

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 15

Which of the following statements is correct?

Accepted Answer

A) Less than three percent of families are categorized as poor for eight years or more. 
B) In the United States, the grandson of a millionaire is much more likely to be rich than the grandson of an average-income person. 
C) The majority of millionaires in the United States inherited their wealth. 
D) Most workers have about the same income (adjusted for inflation) when they are young as when they are middle-aged. 
A) Less than three percent of families are categorized as poor for eight years or more. 
B) In the United States, the grandson of a millionaire is much more likely to be rich than the grandson of an average-income person. 
C) The majority of millionaires in the United States inherited their wealth. 
D) Most workers have about the same income (adjusted for inflation) when they are young as when they are middle-aged.

Question 16

If the U.S. government determines that the cost of feeding an urban family of four is $5,200 per year, then the official poverty line for a family of that type is

Accepted Answer

A) $10,400. 
B) $15,600. 
C) $20,800. 
D) $26,000. 
A) $10,400. 
B) $15,600. 
C) $20,800. 
D) $26,000.

Question 17

The 2011 U.S. distribution of income shows that the top 5 percent of families have approximately what share of income?

Accepted Answer

A) 4 percent 
B) 9 percent 
C) 21 percent 
D) 49 percent 
A) 4 percent 
B) 9 percent 
C) 21 percent 
D) 49 percent

Question 18

Economic mobility refers to the

Accepted Answer

A) government's attempt to distribute monetary assistance to areas most in need. 
B) ability of families to freely relocate to find good jobs. 
C) movement of people among income classes. 
D) movement of resources from one country to another. 
A) government's attempt to distribute monetary assistance to areas most in need. 
B) ability of families to freely relocate to find good jobs. 
C) movement of people among income classes. 
D) movement of resources from one country to another.

Question 19

Which of the following is an example of a welfare program?

Accepted Answer

A) Temporary Assistance for Needy Families (TANF). 
B) Capital Gains Tax (CGT). 
C) Life Cycle Transfers (LCT). 
D) North American Free Trade Agreement (NAFT
A) . 
A) Temporary Assistance for Needy Families (TANF). 
B) Capital Gains Tax (CGT). 
C) Life Cycle Transfers (LCT). 
D) North American Free Trade Agreement (NAFT
A) .

Question 20

Since 1959 when the official data on the poverty rate began, the poverty rate was at its highest in

Accepted Answer

A) 1959. 
B) 1968. 
C) 1977. 
D) 1986. 
A) 1959. 
B) 1968. 
C) 1977. 
D) 1986.

Which of the following groups has the lowest poverty rate?

Anti-poverty programs

When we compare the income distribution of the United States to those of other countries, we find that the U.S. has

Standard measurements of the degree of income inequality take both money income and in-kind transfers into account.

Critics of the minimum wage argue that

John Rawls, who developed the way of thinking called liberalism, argued that government policies should be aimed at maximizing the sum of utility of everyone in society.

People can borrow and lend money to smooth out short term variations in income known as what kind of changes?

In the U.S. economy, labor earnings make up about

A common criticism of government programs that are designed to assist the poor is that

The distribution of income for Inequalia is as follows: If the poverty rate in Inequalia is 25 percent, what is the poverty line in Inequalia?

The invisible hand of the marketplace acts to allocate resources

Table 20-3 The Distribution of Income in Edgerton -Refer to Table 20-3. According to the table, what percent of families in Edgerton have income levels below $76,000?

Which of the following statements is correct?

If the U.S. government determines that the cost of feeding an urban family of four is $5,200 per year, then the official poverty line for a family of that type is

The 2011 U.S. distribution of income shows that the top 5 percent of families have approximately what share of income?

Economic mobility refers to the

Which of the following is an example of a welfare program?

Since 1959 when the official data on the poverty rate began, the poverty rate was at its highest in

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

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Exam 20: Income Inequality and Poverty

Which of the following groups has the lowest poverty rate?

Anti-poverty programs

When we compare the income distribution of the United States to those of other countries, we find that the U.S. has

Standard measurements of the degree of income inequality take both money income and in-kind transfers into account.

Critics of the minimum wage argue that

John Rawls, who developed the way of thinking called liberalism, argued that government policies should be aimed at maximizing the sum of utility of everyone in society.

People can borrow and lend money to smooth out short term variations in income known as what kind of changes?

In the U.S. economy, labor earnings make up about

A common criticism of government programs that are designed to assist the poor is that

The distribution of income for Inequalia is as follows: If the poverty rate in Inequalia is 25 percent, what is the poverty line in Inequalia?

The invisible hand of the marketplace acts to allocate resources

Table 20-3 The Distribution of Income in Edgerton -Refer to Table 20-3. According to the table, what percent of families in Edgerton have income levels below $76,000?

Which of the following statements is correct?

If the U.S. government determines that the cost of feeding an urban family of four is $5,200 per year, then the official poverty line for a family of that type is

The 2011 U.S. distribution of income shows that the top 5 percent of families have approximately what share of income?

Economic mobility refers to the

Which of the following is an example of a welfare program?

Since 1959 when the official data on the poverty rate began, the poverty rate was at its highest in

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