Question 1

Table 20-1
The following table shows the distribution of income in Marysville.  
-Refer to Table 20-1. Fifty percent of all families have incomes below what level?

Accepted Answer

A) $30,000 
B) $60,000 
C) $90,000 
D) There is insufficient information to answer this question. 
A) $30,000 
B) $60,000 
C) $90,000 
D) There is insufficient information to answer this question.

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

Which of the following is not correct?

Accepted Answer

A) Welfare is a broad term that includes a variety of government programs designed to help poor people. 
B) Since the early 1970s, welfare benefits adjusted for inflation have increased, as has the percentage of children living with only one parent. 
C) Critics of welfare programs argue that they can create incentives for unmarried women to have children. 
D) Supporters argue that welfare doesn't cause the decline of two-parent families. 
A) Welfare is a broad term that includes a variety of government programs designed to help poor people. 
B) Since the early 1970s, welfare benefits adjusted for inflation have increased, as has the percentage of children living with only one parent. 
C) Critics of welfare programs argue that they can create incentives for unmarried women to have children. 
D) Supporters argue that welfare doesn't cause the decline of two-parent families.

Question 4

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 5

Aniella believes that the demand for unskilled labor is relatively inelastic. Carmella believes that the demand for unskilled labor is relatively elastic. Which believes that a minimum-wage law will result in significant unemployment?

Accepted Answer

The answer of Aniella believes that the demand for unskilled...

Question 6

A family's ability to buy goods and services depends largely on its

Accepted Answer

A) permanent income, which is its normal, or average, income. 
B) permanent income, which is the lowest annual income the family has received over a 10-year period. 
C) transitory income, which is the measure of income used by the government to analyze the distribution of income and the poverty rate. 
D) transitory income, which is its money income plus any in-kind transfers it receives. 
A) permanent income, which is its normal, or average, income. 
B) permanent income, which is the lowest annual income the family has received over a 10-year period. 
C) transitory income, which is the measure of income used by the government to analyze the distribution of income and the poverty rate. 
D) transitory income, which is its money income plus any in-kind transfers it receives.

Question 7

Which of the following lists correctly ranks countries from most equal to least equal distribution of income?

Accepted Answer

A) Nigeria, India, Mexico, Germany 
B) Brazil, United States, India, Japan 
C) United States, Ethiopia, Japan, South Africa 
D) Japan, India, United States, Brazil 
A) Nigeria, India, Mexico, Germany 
B) Brazil, United States, India, Japan 
C) United States, Ethiopia, Japan, South Africa 
D) Japan, India, United States, Brazil

Question 8

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 9

Critics argue that a disadvantage of minimum-wage laws is that they do not effectively target the working poor because many minimum-wage workers are the teenage children of middle-income families.

Accepted Answer

A) True 
 B)False

Question 10

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. If the distribution of income were completely equal, what percentage of income would the bottom fifth of the population earn?

Accepted Answer

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

Question 11

A goal of libertarians is to provide citizens with equal opportunities rather than to ensure equal outcomes.

Accepted Answer

A) True 
 B)False

Question 12

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 13

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.

Question 14

The goal of utilitarians is to

Accepted Answer

A) apply the logic of individual decision making to questions concerning morality and public policy. 
B) measure happiness and satisfaction. 
C) redistribute income based on the assumption of increasing marginal utility. 
D) All of the above are correct. 
A) apply the logic of individual decision making to questions concerning morality and public policy. 
B) measure happiness and satisfaction. 
C) redistribute income based on the assumption of increasing marginal utility. 
D) All of the above are correct.

Question 15

About half of black and Hispanic children in female-headed households live in poverty.

Accepted Answer

A) True 
 B)False

Question 16

The United States has greater income disparity than

Accepted Answer

A) Japan. 
B) India. 
C) South Africa. 
D) Both a and b are correct. 
A) Japan. 
B) India. 
C) South Africa. 
D) Both a and b are correct.

Question 17

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, what percentage of total income in the US did the bottom 20% of families have?

Accepted Answer

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

Question 18

Scenario 20-7
Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability:
Taxes owed = (1/6 of income) - $24,000
-Refer to Scenario 20-7. A family earning $60,000 before taxes would pay how much in taxes?

Accepted Answer

A) -$20,000 
B) -$14,000 
C) $36,000 
D) $60,000 
A) -$20,000 
B) -$14,000 
C) $36,000 
D) $60,000

Question 19

The economic life cycle describes how young people usually have higher savings rates than middle-aged people.

Accepted Answer

A) True 
 B)False

Question 20

The poverty line is adjusted each year to reflect changes in the

Accepted Answer

A) number of people currently on public assistance. 
B) level of prices. 
C) nutritional content of an "adequate" diet. 
D) size of a family. 
A) number of people currently on public assistance. 
B) level of prices. 
C) nutritional content of an "adequate" diet. 
D) size of a family.

Exam 20: Income Inequality and Poverty

Table 20-1 The following table shows the distribution of income in Marysville. -Refer to Table 20-1. Fifty percent of all families have incomes below what level?

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

Which of the following is not correct?

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?

Aniella believes that the demand for unskilled labor is relatively inelastic. Carmella believes that the demand for unskilled labor is relatively elastic. Which believes that a minimum-wage law will result in significant unemployment?

A family's ability to buy goods and services depends largely on its

Which of the following lists correctly ranks countries from most equal to least equal distribution of income?

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

Critics argue that a disadvantage of minimum-wage laws is that they do not effectively target the working poor because many minimum-wage workers are the teenage children of middle-income families.

A goal of libertarians is to provide citizens with equal opportunities rather than to ensure equal outcomes.

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?

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

The goal of utilitarians is to

About half of black and Hispanic children in female-headed households live in poverty.

The United States has greater income disparity than

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, what percentage of total income in the US did the bottom 20% of families have?

Scenario 20-7 Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability: Taxes owed = (1/6 of income) - $24,000 -Refer to Scenario 20-7. A family earning $60,000 before taxes would pay how much in taxes?

The economic life cycle describes how young people usually have higher savings rates than middle-aged people.

The poverty line is adjusted each year to reflect changes in 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

Applications: 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

Measuring a Nation S Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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