Exam 20: Income Inequality and Poverty

Table 20-10 *A Gini coefficient is a commonly used measure of income inequality, with values between 0 and 1 (0 corresponds to perfect equality whereby everyone has exactly the same income, and 1 corresponds to perfect inequality where one person has all the income, while everyone else has zero income). Source: The World Bank -Refer to Table 20-10. Which of the following statements is correct?

The ancient Greek philosopher, Plato, concluded that in an ideal society the income of the richest person

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?

When we examine historical data on income inequality in the U.S., we see that the distribution of income gradually became

Explain how a "leaky bucket" can be used to illustrate the utilitarian argument that governments should not attempt to completely equalize individual incomes.

Whether or not policymakers should try to make our society more egalitarian is largely a matter of

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%. If the value for this measure of inequality in the US is 15.9 and the value for India is 8.6, how does Imagination compare to these two nations?

Of the following groups, which group is least likely to live in poverty - whites, blacks, Hispanics, Asians?

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

According to a study by Michael Cox and Richard Alm, consumption per person in the richest 20% of households was only 2.1 times consumption per person in the poorest 20% of households.

People have their highest saving rates when they are

Which of the following statements is not correct?

For which of the following programs can a person qualify solely by having a low income?

Scenario 20-7 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 20-7. Does Zooey owe or receive money from the government? How much?

The distribution of income for Inequalia is as follows: If the poverty rate in Inequalia is 25 percent, what is the poverty line in Inequalia?

The distribution of income for Dismal is as follows: If the poverty rate in Dismal is 50 percent, what is the poverty line in Dismal?

Assume that the government proposes a negative income tax that calculates the taxes owed as follows: Taxes Owed = (1/3 Income) - 10,000. If a family doesn't earn any income, how does the negative income tax affect it?

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?

What is one argument made by proponents of in-kind transfers over cash payments to the needy?

The only qualification to receive government assistance under a negative income tax is