Exam 20: Income Inequality and Poverty

Scenario 20-6 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 20-6. How much does Zooey owe or receive from the government?

In the United States approximately 80 percent of millionaires did not inherit their wealth. This illustrates the

Which of the following statements is correct?

A society consists of three individuals: Sam, Tristan, and Ulyana. In terms of income and utility, Sam is currently best-off, Tristan ranks in the middle, and Ulyana is worst-off. Which of the following statements is correct?

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. This negative income tax would guarantee what minimum level of income to every family?

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

The poverty rate for female households with no spouse present is approximately

Figure 20-3 -Refer to Figure 20-3. In 1968, the percent of children under age 18 in poverty is

Table 20-13 Distribution of Income in Imagination -Refer to Table 20-13. The Human Development Report computes a measure of inequality by dividing the income of the richest 10% of the population by the income of the poorest 10%. What is the value for this measure of inequality in Imagination?

The income distribution in the United States shows that the income share of the top fifth of all families is

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 ​ ​ -Refer to Scenario 20-8. The government does not receive any tax revenue through this negative income tax if the family with the highest income earns $56,000.

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

Binding minimum-wage laws

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 35-year-old adult and one child?

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

Susan won $2,000 at the blackjack tables on her birthday. Her winnings are an example of

Saving and borrowing is indicative of a family that

Table 20-13 Distribution of Income in Imagination -Refer to Table 20-13. If the poverty line in Imagination is $18,000, what is the poverty rate?

Anti-poverty programs

The English philosophers Jeremy Bentham and John Stuart Mill founded the school of thought called