Question 1

Winston Churchill once said

Accepted Answer

A) "The inherent virtue of capitalism is the unequal sharing of blessings. The inherent virtue of socialism is the equal sharing of miseries." 
B) "The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of socialism is the equal sharing of miseries." 
C) "The inherent vice of capitalism is the unequal sharing of blessings. The inherent vice of socialism is the equal sharing of miseries." 
D) "The inherent virtue of capitalism is the unequal sharing of blessings. The inherent vice of socialism is the equal sharing of miseries." 
A) "The inherent virtue of capitalism is the unequal sharing of blessings. The inherent virtue of socialism is the equal sharing of miseries." 
B) "The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of socialism is the equal sharing of miseries." 
C) "The inherent vice of capitalism is the unequal sharing of blessings. The inherent vice of socialism is the equal sharing of miseries." 
D) "The inherent virtue of capitalism is the unequal sharing of blessings. The inherent vice of socialism is the equal sharing of miseries."

Question 2

If greater equality is the benefit of government intervention into the allocation of society's resources, what is the cost?

Accepted Answer

The answer of If greater equality is the benefit of...

Question 3

Because people can borrow when they are young, the life cycle theory would suggest that one's standard of living depends on

Accepted Answer

A) lifetime income rather than annual income. 
B) aggregate income rather than annual personal income. 
C) annual extended-family income rather than annual personal income. 
D) income averaged across seasons rather than across years. 
A) lifetime income rather than annual income. 
B) aggregate income rather than annual personal income. 
C) annual extended-family income rather than annual personal income. 
D) income averaged across seasons rather than across years.

Question 4

The statement that "measures of the distribution of income are based on money income" relates to which problem in measuring inequality?

Accepted Answer

A) in-kind transfers 
B) economic life cycle 
C) transitory versus permanent income 
D) economic mobility 
A) in-kind transfers 
B) economic life cycle 
C) transitory versus permanent income 
D) economic mobility

Question 5

Which of the following is not an example of a welfare program?

Accepted Answer

A) Supplemental Security Income (SSI) 
B) Temporary Assistance for Needy Families (TANF) 
C) food stamps 
D) minimum wage laws 
A) Supplemental Security Income (SSI) 
B) Temporary Assistance for Needy Families (TANF) 
C) food stamps 
D) minimum wage laws

Question 6

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 percentage terms, how much less income did the bottom 40% of families have in 2010 than in 1980?

Accepted Answer

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

Question 7

When considering a person's standard of living, data on the income distribution and the poverty rate may provide an incomplete picture because the poor may

Accepted Answer

A) receive in-kind transfers. 
B) be lending to smooth their income over their life cycle. 
C) be saving to smooth their income due to a drop in transitory income. 
D) under-report their income. 
A) receive in-kind transfers. 
B) be lending to smooth their income over their life cycle. 
C) be saving to smooth their income due to a drop in transitory income. 
D) under-report their income.

Question 8

One way of expressing the tradeoff between income equality and efficiency is to say the more equally the pie is divided, the .

Accepted Answer

smaller th

Question 9

Which of the following pholitical philosophies would support redistribution of income that makes society fully egalitarian?

Accepted Answer

A) Liberals, because they believe in the maximin criterion. 
B) Libertarians, because they believe in evaluating the process by which economic outcomes arise. 
C) Utilitarians, because they believe in diminishing marginal utility. 
D) None of the above would support completely egalitarian redistribution of income. 
A) Liberals, because they believe in the maximin criterion. 
B) Libertarians, because they believe in evaluating the process by which economic outcomes arise. 
C) Utilitarians, because they believe in diminishing marginal utility. 
D) None of the above would support completely egalitarian redistribution of income.

Question 10

The poverty rate is a measure of the percentage of people whose incomes fall below

Accepted Answer

A) a relative level of income. 
B) an absolute level of income. 
C) the median income for a family of three. 
D) the bottom 20 percent of the income distribution. 
A) a relative level of income. 
B) an absolute level of income. 
C) the median income for a family of three. 
D) the bottom 20 percent of the income distribution.

Question 11

Which of the three political philosophies discussed in the textbook, if any, view the total income of society as a shared resource that a social planner can freely redistribute to achieve some social goal?

Accepted Answer

utilitaria

Question 12

A utilitarian government must

Accepted Answer

A) calculate the utility of each individual in society. 
B) avoid enacting any policies that redistribute income from the rich to the poor. 
C) balance the gains from greater equality against the losses from distorted incentives. 
D) pursue policies that do not affect the middle class. 
A) calculate the utility of each individual in society. 
B) avoid enacting any policies that redistribute income from the rich to the poor. 
C) balance the gains from greater equality against the losses from distorted incentives. 
D) pursue policies that do not affect the middle class.

Question 13

Comparing the US to other countries ranked by inequality,

Accepted Answer

A) the US has a less equal distribution of income than some countries, but a more equal distribution of income than others. 
B) the US has one of the most equal distributions of income. 
C) the US has one of the least equal distributions of income. 
D) the US has a more equal distribution of income than other economically advanced countries such as Japan, Germany, and France. 
A) the US has a less equal distribution of income than some countries, but a more equal distribution of income than others. 
B) the US has one of the most equal distributions of income. 
C) the US has one of the least equal distributions of income. 
D) the US has a more equal distribution of income than other economically advanced countries such as Japan, Germany, and France.

Question 14

Miguel is a 20 year old college student who works part-time and earns an annual income of $12,000. To smooth out his life cycle changes in income, Miguel can

Accepted Answer

A) save his earnings to use when he is middle-aged. 
B) lend money to a friend to purchase a new car. 
C) borrow money to pay for college, which he will later repay when his income rises. 
D) attempt to pay for college from his current earnings. 
A) save his earnings to use when he is middle-aged. 
B) lend money to a friend to purchase a new car. 
C) borrow money to pay for college, which he will later repay when his income rises. 
D) attempt to pay for college from his current earnings.

Question 15

Which of the following is not correct?

Accepted Answer

A) Many measures of inequality are based on income, which may not reflect a person's standard of living. 
B) Because many of the poorest families receive in-kind transfers, more families have lower standards of living when compared to poverty rates based on income. 
C) Because people can borrow and save to smooth out life cycle changes in income, equality measures based only on income may not reflect a person's standard of living. 
D) A person's standard of living depends more on her permanent income than her transitory income, so inequality measures based on current income may be misleading. 
A) Many measures of inequality are based on income, which may not reflect a person's standard of living. 
B) Because many of the poorest families receive in-kind transfers, more families have lower standards of living when compared to poverty rates based on income. 
C) Because people can borrow and save to smooth out life cycle changes in income, equality measures based only on income may not reflect a person's standard of living. 
D) A person's standard of living depends more on her permanent income than her transitory income, so inequality measures based on current income may be misleading.

Question 16

Libertarians believe that the government should enforce individual rights to ensure that all people have the same opportunities to use their talents to achieve success.

Accepted Answer

A) True 
 B)False

Question 17

The regular pattern of income variation over a person's life is called the .

Accepted Answer

The answer of The regular pattern of income variation over...

Question 18

Table 20-1
The following table shows the distribution of income in Marysville.  
-Refer to Table 20-1. If the poverty line was $31,852, what would be the poverty rate?

Accepted Answer

A) less than 25% 
B) between 25% and 50% 
C) between 50% and 75% 
D) There is insufficient information to answer this question. 
A) less than 25% 
B) between 25% and 50% 
C) between 50% and 75% 
D) There is insufficient information to answer this question.

Question 19

The measured poverty rate may not reflect the true extent of economic deprivation because it does not include some forms of government assistance.

Accepted Answer

A) True 
 B)False

Question 20

The poverty rate is the percentage of the population that have a family income level below the

Accepted Answer

A) income maintenance threshold. 
B) poverty line. 
C) bottom quintile of the income distribution. 
D) minimum wage. 
A) income maintenance threshold. 
B) poverty line. 
C) bottom quintile of the income distribution. 
D) minimum wage.

Exam 20: Income Inequality and Poverty

Winston Churchill once said

If greater equality is the benefit of government intervention into the allocation of society's resources, what is the cost?

Because people can borrow when they are young, the life cycle theory would suggest that one's standard of living depends on

The statement that "measures of the distribution of income are based on money income" relates to which problem in measuring inequality?

Which of the following is not an example of a welfare program?

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 percentage terms, how much less income did the bottom 40% of families have in 2010 than in 1980?

When considering a person's standard of living, data on the income distribution and the poverty rate may provide an incomplete picture because the poor may

One way of expressing the tradeoff between income equality and efficiency is to say the more equally the pie is divided, the .

Which of the following pholitical philosophies would support redistribution of income that makes society fully egalitarian?

The poverty rate is a measure of the percentage of people whose incomes fall below

Which of the three political philosophies discussed in the textbook, if any, view the total income of society as a shared resource that a social planner can freely redistribute to achieve some social goal?

A utilitarian government must

Comparing the US to other countries ranked by inequality,

Miguel is a 20 year old college student who works part-time and earns an annual income of $12,000. To smooth out his life cycle changes in income, Miguel can

Which of the following is not correct?

Libertarians believe that the government should enforce individual rights to ensure that all people have the same opportunities to use their talents to achieve success.

The regular pattern of income variation over a person's life is called the .

Table 20-1 The following table shows the distribution of income in Marysville. -Refer to Table 20-1. If the poverty line was $31,852, what would be the poverty rate?

The measured poverty rate may not reflect the true extent of economic deprivation because it does not include some forms of government assistance.

The poverty rate is the percentage of the population that have a family income level below 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

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