Question 1

Who said "The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of socialism is the equal sharing of miseries"?

Accepted Answer

The answer of Who said "The inherent vice of capitalism...

Question 2

When the government taxes income as part of a redistribution program,

Accepted Answer

A) the poor pay higher taxes. 
B) the rich always benefit more than the poor. 
C) the poor are encouraged to work. 
D) incentives to earn income are diminished. 
A) the poor pay higher taxes. 
B) the rich always benefit more than the poor. 
C) the poor are encouraged to work. 
D) incentives to earn income are diminished.

Question 3

The poverty line in the country of Dismal is $20,000. The distribution of income for Dismal is as follows:   The poverty rate in Dismal is

Accepted Answer

A) 16.7 percent. 
B) 33.3 percent. 
C) 50 percent. 
D) 83.3 percent. 
A) 16.7 percent. 
B) 33.3 percent. 
C) 50 percent. 
D) 83.3 percent.

Question 4

The poverty line is

Accepted Answer

A) established by the federal government. 
B) approximately equivalent to three times the cost of providing an adequate diet. 
C) an absolute level of income below which a family is deemed to be in poverty. 
D) All of the above are correct. 
A) established by the federal government. 
B) approximately equivalent to three times the cost of providing an adequate diet. 
C) an absolute level of income below which a family is deemed to be in poverty. 
D) All of the above are correct.

Question 5

Economists Cox and Alm compared the gap between rich and poor and found that the richest 20% was about 15 times better off than the poorest 20% when they compared what data?

Accepted Answer

The answer of Economists Cox and Alm compared the gap...

Question 6

Which group would be the least upset by wide variation in the income distribution?

Accepted Answer

A) utilitarians 
B) liberals 
C) libertarians 
D) Each group would be equally upset. 
A) utilitarians 
B) liberals 
C) libertarians 
D) Each group would be equally upset.

Question 7

The goal of liberalism is to

Accepted Answer

A) redistribute income based on the assumption of diminishing marginal utility. 
B) redistribute income in order to improve the well-being of the worst-off person in society. 
C) punish crimes and enforce voluntary agreements but not to redistribute income. 
D) measure happiness and satisfaction. 
A) redistribute income based on the assumption of diminishing marginal utility. 
B) redistribute income in order to improve the well-being of the worst-off person in society. 
C) punish crimes and enforce voluntary agreements but not to redistribute income. 
D) measure happiness and satisfaction.

Question 8

The elderly represent the largest demographic group in poverty.

Accepted Answer

A) True 
 B)False

Question 9

Since 1959 when the official data on the poverty rate began, the poverty rate was at its highest in

Accepted Answer

A) 1959. 
B) 1968. 
C) 1977. 
D) 1986. 
A) 1959. 
B) 1968. 
C) 1977. 
D) 1986.

Question 10

The United States has more income inequality than Brazil and South Africa.

Accepted Answer

A) True 
 B)False

Question 11

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 $50,000 before taxes would have how much after-tax income?

Accepted Answer

A) -$5,000 
B) $40,000 
C) $45,000 
D) $55,000 
A) -$5,000 
B) $40,000 
C) $45,000 
D) $55,000

Question 12

The distribution of income for Danville is as follows:   If the poverty rate in Danville is 33.3 percent, what is the poverty line in Danville?

Accepted Answer

A) $15,000. 
B) $20,000. 
C) $25,000. 
D) $30,000. 
A) $15,000. 
B) $20,000. 
C) $25,000. 
D) $30,000.

Question 13

Figure 20-5  
-Refer to Figure 20-5. If the government imposes a minimum wage above Wo, it is likely to

Accepted Answer

A) increase employment to a level above Qo. 
B) reduce employment to a level below Qo. 
C) provide more income to the working poor than they collectively received before the minimum wage was set. 
D) have no effect on employment. 
A) increase employment to a level above Qo. 
B) reduce employment to a level below Qo. 
C) provide more income to the working poor than they collectively received before the minimum wage was set. 
D) have no effect on employment.

Question 14

When designing public policies, which income group would philosopher John Rawls argue needs the most attention?

Accepted Answer

A) Individuals located in the bottom fifth of the income distribution. 
B) Individuals located at the average income level. 
C) Individuals located in the top fifth of the income distribution. 
D) Individuals located in the top five percent of the income distribution. 
A) Individuals located in the bottom fifth of the income distribution. 
B) Individuals located at the average income level. 
C) Individuals located in the top fifth of the income distribution. 
D) Individuals located in the top five percent of the income distribution.

Question 15

When the government enacts policies to make the distribution of income more equitable, it distorts incentives, alters behavior, and makes the allocation of resources less efficient.

Accepted Answer

A) True 
 B)False

Question 16

Table 20-13
The following table shows the distribution of income in Widgetapolis.   ​
-Refer to Table 20-13. If the poverty line were $45,141, 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 17

Figure 20-4  
-Refer to Figure 20-4. The ratio of female-to-male earnings has increased steadily from about 1980 to 2008 because the earnings of men

Accepted Answer

A) increased steadily but by approximately half of the increase in the earnings of women. 
B) decreased while the earnings of women increased. 
C) stayed relatively constant while the earnings of women increased. 
D) decreased by substantially more than the decrease in the earnings of women. 
A) increased steadily but by approximately half of the increase in the earnings of women. 
B) decreased while the earnings of women increased. 
C) stayed relatively constant while the earnings of women increased. 
D) decreased by substantially more than the decrease in the earnings of women.

Question 18

If a government could successfully achieve the maximin criterion, each member of society would have an equal income.

Accepted Answer

A) True 
 B)False

Question 19

If a father earns 20% above his generation's average income, his son will most likely earn what percent above his generation's average income? What does this statistic indicate?

Accepted Answer

8% Persistence of economic suc

Question 20

A utilitarian government has to balance the gains from greater income equality against the losses from distorted work incentives. To maximize total utility, therefore, the government

Accepted Answer

A) would never tax labor income. 
B) must always achieve a fully egalitarian society. 
C) enacts policies that only benefit the middle class. 
D) stops short of a fully egalitarian society. 
A) would never tax labor income. 
B) must always achieve a fully egalitarian society. 
C) enacts policies that only benefit the middle class. 
D) stops short of a fully egalitarian society.

Exam 20: Income Inequality and Poverty

Who said "The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of socialism is the equal sharing of miseries"?

When the government taxes income as part of a redistribution program,

The poverty line in the country of Dismal is $20,000. The distribution of income for Dismal is as follows: The poverty rate in Dismal is

The poverty line is

Economists Cox and Alm compared the gap between rich and poor and found that the richest 20% was about 15 times better off than the poorest 20% when they compared what data?

Which group would be the least upset by wide variation in the income distribution?

The goal of liberalism is to

The elderly represent the largest demographic group in poverty.

Since 1959 when the official data on the poverty rate began, the poverty rate was at its highest in

The United States has more income inequality than Brazil and South Africa.

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 $50,000 before taxes would have how much after-tax income?

The distribution of income for Danville is as follows: If the poverty rate in Danville is 33.3 percent, what is the poverty line in Danville?

Figure 20-5 -Refer to Figure 20-5. If the government imposes a minimum wage above Wo, it is likely to

When designing public policies, which income group would philosopher John Rawls argue needs the most attention?

When the government enacts policies to make the distribution of income more equitable, it distorts incentives, alters behavior, and makes the allocation of resources less efficient.

Table 20-13 The following table shows the distribution of income in Widgetapolis. ​ -Refer to Table 20-13. If the poverty line were $45,141, what would be the poverty rate?

Figure 20-4 -Refer to Figure 20-4. The ratio of female-to-male earnings has increased steadily from about 1980 to 2008 because the earnings of men

If a government could successfully achieve the maximin criterion, each member of society would have an equal income.

If a father earns 20% above his generation's average income, his son will most likely earn what percent above his generation's average income? What does this statistic indicate?

A utilitarian government has to balance the gains from greater income equality against the losses from distorted work incentives. To maximize total utility, therefore, the government

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

Filters

Figure 20-5 -Refer to Figure 20-5. If the government imposes a minimum wage above W_o, it is likely to

Table 20-13 The following table shows the distribution of income in Widgetapolis. -Refer to Table 20-13. If the poverty line were $45,141, what would be the poverty rate?