Question 1

Given the table shown, which country has a more equal income distribution? Explain your answer.

Accepted Answer

Country A has a more equal income distri

Question 2

Scenario 20-4
Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability:
Taxes owed = (1/5 of income) - $15,000
-Refer to Scenario 20-4. A family earning $100,000 before taxes would have how much after-tax income?

Accepted Answer

A) $50,000 
B) $65,000 
C) $80,000 
D) $95,000 
A) $50,000 
B) $65,000 
C) $80,000 
D) $95,000

Question 3

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. 
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.

Question 4

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 have to earn to owe $0 in taxes?

Accepted Answer

A) $8,000 
B) $16,283 
C) $28,571 
D) $30,694 
A) $8,000 
B) $16,283 
C) $28,571 
D) $30,694

Question 5

The rule for redistribution proposed by John Rawls in his book A Theory of Justice is called the

Accepted Answer

A) "optimal ignorance" rule. 
B) libertarian justice rule. 
C) maximin criterion. 
D) egalitarian criterion. 
A) "optimal ignorance" rule. 
B) libertarian justice rule. 
C) maximin criterion. 
D) egalitarian criterion.

Question 6

Table 20-11
Poverty Thresholds in 2011, by Size of Family and Number of Related Children Under 18 Years
[Dollars]   Source: U. S. Bureau of the Census, Current Population Survey.
-Refer to Table 20-11. What is the poverty line for a 75-year-old individual?

Accepted Answer

A) $10,788 
B) $11,702 
C) $13,596 
D) $15,446 
A) $10,788 
B) $11,702 
C) $13,596 
D) $15,446

Question 7

Utilitarians believe that the proper goal of the government is to maximize the sum of the utilities of everyone in society.

Accepted Answer

A) True 
 B)False

Question 8

Economic mobility in the United States is

Accepted Answer

A) great, so many of those below the poverty line are there only temporarily. 
B) rare, so most of those below the poverty line are there for decades. 
C) rare, yet many of those below the poverty line are there only temporarily. 
D) unrelated to poverty. 
A) great, so many of those below the poverty line are there only temporarily. 
B) rare, so most of those below the poverty line are there for decades. 
C) rare, yet many of those below the poverty line are there only temporarily. 
D) unrelated to poverty.

Question 9

Table 20-11
Poverty Thresholds in 2011, by Size of Family and Number of Related Children Under 18 Years
[Dollars]   Source: U. S. Bureau of the Census, Current Population Survey.
-Refer to Table 20-11. What is the poverty line for a family with one 68-year-old adult and one child?

Accepted Answer

A) $10,788 
B) $15,446 
C) $15,504 
D) $18,106 
A) $10,788 
B) $15,446 
C) $15,504 
D) $18,106

Question 10

Since 1970, has the distribution of income in the US become more equal, less equal, or remained unchanged?

Accepted Answer

The answer of Since 1970, has the distribution of income...

Question 11

Which political philosophy argues that the government should choose policies to maximize the total utility of everyone in society?

Accepted Answer

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

Question 12

Figure 20-3  
-Refer to Figure 20-3. In 2011, the percent of children under age 18 in poverty is

Accepted Answer

A) higher than both the percentage of adults aged 18 to 64 and the percentage of elderly aged 65 years and over in poverty. 
B) higher than the percentage of adults aged 18 to 64 but is lower than the percentage of elderly aged 65 years and over in poverty. 
C) lower than both the percentage of adults aged 18 to 64 and the percentage of elderly aged 65 years and over in poverty. 
D) lower than the percentage of adults aged 18 to 64 but is higher than the percentage of elderly aged 65 years and over in poverty. 
A) higher than both the percentage of adults aged 18 to 64 and the percentage of elderly aged 65 years and over in poverty. 
B) higher than the percentage of adults aged 18 to 64 but is lower than the percentage of elderly aged 65 years and over in poverty. 
C) lower than both the percentage of adults aged 18 to 64 and the percentage of elderly aged 65 years and over in poverty. 
D) lower than the percentage of adults aged 18 to 64 but is higher than the percentage of elderly aged 65 years and over in poverty.

Question 13

The 2011 U.S. distribution of income shows that the top 20 percent of all families have

Accepted Answer

A) more than twelve times the income of the bottom 20 percent. 
B) more than six times the income of the bottom 20 percent. 
C) more than 100 percent more income than the bottom 20 percent. 
D) the same share of income as the bottom 20 percent. 
A) more than twelve times the income of the bottom 20 percent. 
B) more than six times the income of the bottom 20 percent. 
C) more than 100 percent more income than the bottom 20 percent. 
D) the same share of income as the bottom 20 percent.

Question 14

When incentives to earn income are distorted by income redistribution programs,

Accepted Answer

A) losses can exceed potential gains from greater equality of income. 
B) total income in an economy can fall. 
C) total utility in society can fall. 
D) All of the above are correct. 
A) losses can exceed potential gains from greater equality of income. 
B) total income in an economy can fall. 
C) total utility in society can fall. 
D) All of the above are correct.

Question 15

Table 20-14
Income Inequality in the United States
The values in the table reflect the percentages of pre-tax-and transfer income.   Source: US Census Bureau
-Refer to Table 20-14. In 2010, how many more percentage points of total income did the top fifth of the population earn compared to if the income distribution were completely equal?

Accepted Answer

The answer of Table 20-14
Income Inequality in the United States
The...

Question 16

Table 20-13
The following table shows the distribution of income in Widgetapolis.   ​
-Refer to Table 20-13. Sixty percent of all families have incomes below what level?

Accepted Answer

A) $39,000 
B) $60,000 
C) $82,000 
D) $110,000 
A) $39,000 
B) $60,000 
C) $82,000 
D) $110,000

Question 17

Economists who study economic mobility have found that the income of a grandfather and his grandson's income are

Accepted Answer

A) not closely related. 
B) negatively related. 
C) directly related. 
D) equal. 
A) not closely related. 
B) negatively related. 
C) directly related. 
D) equal.

Question 18

Table 20-13
The following table shows the distribution of income in Widgetapolis.   ​
-Refer to Table 20-13. If the poverty line were $19,915, what would be the poverty rate?

Accepted Answer

A) less than 20% 
B) between 20% and 40% 
C) between 40% and 60% 
D) between 60% and 80% 
A) less than 20% 
B) between 20% and 40% 
C) between 40% and 60% 
D) between 60% and 80%

Question 19

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 at or above $76,000?

Accepted Answer

A) 80 percent 
B) 60 percent 
C) 50 percent 
D) 40 percent 
A) 80 percent 
B) 60 percent 
C) 50 percent 
D) 40 percent

Question 20

A utilitarian government will pursue policies that redistribute income from the rich to the poor. One problem with these policies is that

Accepted Answer

A) everyone has less incentive to work hard. 
B) the rich will work harder while the poor will not. 
C) the poor will work harder while the rich will not. 
D) everyone in the middle class ends up worse off. 
A) everyone has less incentive to work hard. 
B) the rich will work harder while the poor will not. 
C) the poor will work harder while the rich will not. 
D) everyone in the middle class ends up worse off.

Exam 20: Income Inequality and Poverty

Given the table shown, which country has a more equal income distribution? Explain your answer.

Scenario 20-4 Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability: Taxes owed = (1/5 of income) - $15,000 -Refer to Scenario 20-4. A family earning $100,000 before taxes would have how much after-tax income?

The percentage of families with incomes below the poverty line

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 have to earn to owe $0 in taxes?

The rule for redistribution proposed by John Rawls in his book A Theory of Justice is called the

Table 20-11 Poverty Thresholds in 2011, by Size of Family and Number of Related Children Under 18 Years [Dollars] Source: U. S. Bureau of the Census, Current Population Survey. -Refer to Table 20-11. What is the poverty line for a 75-year-old individual?

Utilitarians believe that the proper goal of the government is to maximize the sum of the utilities of everyone in society.

Economic mobility in the United States is

Table 20-11 Poverty Thresholds in 2011, by Size of Family and Number of Related Children Under 18 Years [Dollars] Source: U. S. Bureau of the Census, Current Population Survey. -Refer to Table 20-11. What is the poverty line for a family with one 68-year-old adult and one child?

Since 1970, has the distribution of income in the US become more equal, less equal, or remained unchanged?

Which political philosophy argues that the government should choose policies to maximize the total utility of everyone in society?

Figure 20-3 -Refer to Figure 20-3. In 2011, the percent of children under age 18 in poverty is

The 2011 U.S. distribution of income shows that the top 20 percent of all families have

When incentives to earn income are distorted by income redistribution programs,

Table 20-13 The following table shows the distribution of income in Widgetapolis. ​ -Refer to Table 20-13. Sixty percent of all families have incomes below what level?

Economists who study economic mobility have found that the income of a grandfather and his grandson's income are

Table 20-13 The following table shows the distribution of income in Widgetapolis. ​ -Refer to Table 20-13. If the poverty line were $19,915, what would be the poverty rate?

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 at or above $76,000?

A utilitarian government will pursue policies that redistribute income from the rich to the poor. One problem with these policies is that

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Table 20-13 The following table shows the distribution of income in Widgetapolis. -Refer to Table 20-13. Sixty percent of all families have incomes below what level?

Table 20-13 The following table shows the distribution of income in Widgetapolis. -Refer to Table 20-13. If the poverty line were $19,915, what would be the poverty rate?