Question 1

Among all countries in the world, the United States has the most income inequality.

Accepted Answer

A) True 
 B)False

Question 2

Goods and services given to the poor such as food stamps, housing vouchers, and medical services are called

Accepted Answer

The answer of Goods and services given to the poor...

Question 3

In comparison to the average poverty rate,

Accepted Answer

A) children and the elderly are more likely to be poor. 
B) children and the elderly are less likely to be poor. 
C) children are more likely to be poor, but the elderly are less likely to be poor. 
D) children are less likely to be poor, but the elderly are more likely to be poor. 
A) children and the elderly are more likely to be poor. 
B) children and the elderly are less likely to be poor. 
C) children are more likely to be poor, but the elderly are less likely to be poor. 
D) children are less likely to be poor, but the elderly are more likely to be poor.

Question 4

When we examine historical data on income inequality in the U.S., we see that the distribution of income gradually became

Accepted Answer

A) more equal between 1935 and 2011. 
B) more equal between 1935 and 1973, but that trend reversed itself between 1973 and 2011. 
C) more unequal between 1935 and 1973, but that trend reversed itself between 1973 and 2011. 
D) more unequal between 1935 and 2011. 
A) more equal between 1935 and 2011. 
B) more equal between 1935 and 1973, but that trend reversed itself between 1973 and 2011. 
C) more unequal between 1935 and 1973, but that trend reversed itself between 1973 and 2011. 
D) more unequal between 1935 and 2011.

Question 5

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

Question 6

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 7

In a typical 10-year period, about one in four families falls below the poverty line in at least one year. What percentage of families are poor for eight or more years?

Accepted Answer

The answer of In a typical 10-year period, about one...

Question 8

Assume that the government proposes a negative income tax that calculates the taxes owed as follows: Taxes Owed = (1/3   Income) - 10,000. If a family doesn't earn any income, how does the negative income tax affect it?

Accepted Answer

A) It will receive an income subsidy of $1,000. 
B) It will receive an income subsidy of $3,000. 
C) It will receive an income subsidy of $10,000. 
D) It will not be affected at all, since the negative income tax requires a family to earn income. 
A) It will receive an income subsidy of $1,000. 
B) It will receive an income subsidy of $3,000. 
C) It will receive an income subsidy of $10,000. 
D) It will not be affected at all, since the negative income tax requires a family to earn income.

Question 9

Which of the three political philosophies discussed in the textbook, if any, think the government should not take from some individuals and give to others to achieve any particular distribution of income?

Accepted Answer

The answer of Which of the three political philosophies discussed...

Question 10

Over the past 50 years, the U.S. poverty rate was at its lowest level in

Accepted Answer

A) 1973. 
B) 1980. 
C) 1990. 
D) 2008. 
A) 1973. 
B) 1980. 
C) 1990. 
D) 2008.

Question 11

The table below reflects the levels of total utility received from income for each of four members of a society.   
a.Assume that the society has the following income distribution:
Peter $3
Paul $7
Mary $5
Jane $3
Is it possible for the government to increase total aggregate utility by redistributing income among members of society? Explain your answer.
b.Assume that the government has $19 to allocate among the four members of society. (Assume that no one has any income to start with.) If the government is interested in distributing income in a way that maximizes aggregate total utility, how should it distribute the $19 of income?
c.Does the table above describe a situation characterized by diminishing marginal utility? Explain your answer.

Accepted Answer

a.No. If a dollar is taken from anyone,

Question 12

What is meant by a perfectly equal distribution of income? Use a graph to depict such a situation.

Accepted Answer

@#IMG-DLM& If income were equally distributed acro

Question 13

In 2011, the poverty rate in the United States was

Accepted Answer

A) 5.9 percent. 
B) 11.1 percent. 
C) 15.0 percent. 
D) 22.4 percent. 
A) 5.9 percent. 
B) 11.1 percent. 
C) 15.0 percent. 
D) 22.4 percent.

Question 14

Which political philosophy argues that the government should choose policies deemed just, as evaluated by an impartial observer?

Accepted Answer

The answer of Which political philosophy argues that the government...

Question 15

Diminishing marginal utility suggests that

Accepted Answer

A) more is always preferred to less. 
B) the well-being of society is maximized when the distribution of income is equal. 
C) the poor are less efficient at spending money than the rich. 
D) the poor receive more satisfaction from the last dollar spent than the rich. 
A) more is always preferred to less. 
B) the well-being of society is maximized when the distribution of income is equal. 
C) the poor are less efficient at spending money than the rich. 
D) the poor receive more satisfaction from the last dollar spent than the rich.

Question 16

Scenario 20-1
The government is proposing switching from a progressive tax system in which families pay 15% of the first $50,000 earned, 25% of the next $50,000 earned, and 35% of any income over $100,000 to a tax system in which every family pays 20% of their income less $20,000.
-Refer to Scenario 20-1. What would the libertarians think of the proposed policy change?

Accepted Answer

A) They would favor the current progressive policy over the proposed policy because it accounts for diminishing marginal utility. 
B) They would favor the proposed tax policy over the current progressive policy because it would result in a negative tax for the poorest families. 
C) They would favor the current progressive tax policy over the proposed policy because it rewards those who work the hardest. 
D) They would oppose both tax policies because both redistribute income. 
A) They would favor the current progressive policy over the proposed policy because it accounts for diminishing marginal utility. 
B) They would favor the proposed tax policy over the current progressive policy because it would result in a negative tax for the poorest families. 
C) They would favor the current progressive tax policy over the proposed policy because it rewards those who work the hardest. 
D) They would oppose both tax policies because both redistribute income.

Question 17

The poverty rate is an absolute level of income set by the federal government for each family size. A family with income below this rate is deemed to be in poverty.

Accepted Answer

A) True 
 B)False

Question 18

If the government decided that each family needs a minimum income of $25,000 and promised to make up the difference between whatever a family earned and $25,000, which of the following is correct?

Accepted Answer

A) The government is effectively taxing every dollar earned up to $25,000 at a rate of 100%. 
B) This program would reduce the incentive to work to earn any wage up to $25,000. 
C) If workers are discouraged from working due to this program, they will miss any on-the-job training that would have otherwise occurred, limiting their ability to improve their skills. 
D) All of the above are correct. 
A) The government is effectively taxing every dollar earned up to $25,000 at a rate of 100%. 
B) This program would reduce the incentive to work to earn any wage up to $25,000. 
C) If workers are discouraged from working due to this program, they will miss any on-the-job training that would have otherwise occurred, limiting their ability to improve their skills. 
D) All of the above are correct.

Question 19

Based on U.S. data for 2011, the poverty rate is the highest for which group of people?

Accepted Answer

A) children 
B) married couples 
C) female-headed households, no spouse present 
D) the elderly 
A) children 
B) married couples 
C) female-headed households, no spouse present 
D) the elderly

Question 20

Liberalism aims to raise the welfare of the worst-off person in society. This rule is called the

Accepted Answer

A) minimax regret criterion. 
B) conservative approach. 
C) Nozick criterion. 
D) maximin criterion. 
A) minimax regret criterion. 
B) conservative approach. 
C) Nozick criterion. 
D) maximin criterion.

Among all countries in the world, the United States has the most income inequality.

Goods and services given to the poor such as food stamps, housing vouchers, and medical services are called

In comparison to the average poverty rate,

When we examine historical data on income inequality in the U.S., we see that the distribution of income gradually became

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

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

In a typical 10-year period, about one in four families falls below the poverty line in at least one year. What percentage of families are poor for eight or more years?

Assume that the government proposes a negative income tax that calculates the taxes owed as follows: Taxes Owed = (1/3 Income) - 10,000. If a family doesn't earn any income, how does the negative income tax affect it?

Which of the three political philosophies discussed in the textbook, if any, think the government should not take from some individuals and give to others to achieve any particular distribution of income?

Over the past 50 years, the U.S. poverty rate was at its lowest level in

What is meant by a perfectly equal distribution of income? Use a graph to depict such a situation.

In 2011, the poverty rate in the United States was

Which political philosophy argues that the government should choose policies deemed just, as evaluated by an impartial observer?

Diminishing marginal utility suggests that

The poverty rate is an absolute level of income set by the federal government for each family size. A family with income below this rate is deemed to be in poverty.

If the government decided that each family needs a minimum income of $25,000 and promised to make up the difference between whatever a family earned and $25,000, which of the following is correct?

Based on U.S. data for 2011, the poverty rate is the highest for which group of people?

Liberalism aims to raise the welfare of the worst-off person in society. This rule is called the

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

Among all countries in the world, the United States has the most income inequality.

Goods and services given to the poor such as food stamps, housing vouchers, and medical services are called

In comparison to the average poverty rate,

When we examine historical data on income inequality in the U.S., we see that the distribution of income gradually became

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

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

In a typical 10-year period, about one in four families falls below the poverty line in at least one year. What percentage of families are poor for eight or more years?

Assume that the government proposes a negative income tax that calculates the taxes owed as follows: Taxes Owed = (1/3 Income) - 10,000. If a family doesn't earn any income, how does the negative income tax affect it?

Which of the three political philosophies discussed in the textbook, if any, think the government should not take from some individuals and give to others to achieve any particular distribution of income?

Over the past 50 years, the U.S. poverty rate was at its lowest level in

What is meant by a perfectly equal distribution of income? Use a graph to depict such a situation.

In 2011, the poverty rate in the United States was

Which political philosophy argues that the government should choose policies deemed just, as evaluated by an impartial observer?

Diminishing marginal utility suggests that

The poverty rate is an absolute level of income set by the federal government for each family size. A family with income below this rate is deemed to be in poverty.

If the government decided that each family needs a minimum income of $25,000 and promised to make up the difference between whatever a family earned and $25,000, which of the following is correct?

Based on U.S. data for 2011, the poverty rate is the highest for which group of people?

Liberalism aims to raise the welfare of the worst-off person in society. This rule is called the

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