Question 1

What measure does the federal government use when setting the official poverty line in the US?

Accepted Answer

three times the cost

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

People can borrow and lend money to smooth out short term variations in income known as what kind of changes?

Accepted Answer

The answer of People can borrow and lend money to...

Question 4

Sofia won $2,600 at the blackjack tables on her birthday. Her winnings are an example of

Accepted Answer

A) permanent income. 
B) life-cycle income. 
C) transitory income. 
D) an in-kind transfer. 
A) permanent income. 
B) life-cycle income. 
C) transitory income. 
D) an in-kind transfer.

Question 5

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 6

Assume you are a critic of welfare reforms that impose a time limit on the number of years a person is eligible for welfare benefits. What is the foundation of your critique?

Accepted Answer

The critique is based on the premise tha

Question 7

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 8

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

Accepted Answer

A) Utilitarianism suggests that government policies should strive to maximize the sum of all three individuals' utility. 
B) Liberalism suggests that government policies should strive to maximize the sum of Aniyah's utility and Jordan's utility. 
C) Libertarianism suggests that government policies should strive to make Jordan better off at the cost of Aniyah and Justin. 
D) Utilitarianism suggests that the government policies should strive to make Jordan better off than Justin. 
A) Utilitarianism suggests that government policies should strive to maximize the sum of all three individuals' utility. 
B) Liberalism suggests that government policies should strive to maximize the sum of Aniyah's utility and Jordan's utility. 
C) Libertarianism suggests that government policies should strive to make Jordan better off at the cost of Aniyah and Justin. 
D) Utilitarianism suggests that the government policies should strive to make Jordan better off than Justin.

Question 9

In the United States from 1935 to 2011 the share of total income earned by the bottom fifth of income earners rose and then fell.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is not an example of in-kind transfers?

Accepted Answer

A) Food stamps 
B) Medicaid 
C) The Earned Income Tax Credit 
D) Housing vouchers 
A) Food stamps 
B) Medicaid 
C) The Earned Income Tax Credit 
D) Housing vouchers

Question 11

Which of the following is not a characteristic of the Earned Income Tax Credit (EITC)?

Accepted Answer

A) It does not discourage recipients from working. 
B) It is less distortionary than other anti-poverty programs. 
C) It helps the disabled who cannot work. 
D) It applies only to the working poor. 
A) It does not discourage recipients from working. 
B) It is less distortionary than other anti-poverty programs. 
C) It helps the disabled who cannot work. 
D) It applies only to the working poor.

Question 12

Table 20-2
Percentage of Before-Tax Income Received by Families in Hapland
​
​
 $$\begin{array} { | c | c | c | } 
\hline \text { Group } & \begin{array} { c } 
\mathbf { \text { Percentage of Family } }\
\text { Incomein } \mathbf { 2 0 2 0 }
\end{array} & \begin{array} { c } 
\text { Percentage of Family } \
\text { Incomein 1970 }
\end{array} \
\hline \text { Bottom Quintile } & 4.1 & 5.5 \
\hline \text { Second Quintile } & 6.2 & 7.2 \
\hline \text { Middle Quintile } & 12.1 & 13.6 \
\hline \text { Fourth Quintile } & 26.9 & 25.8 \
\hline \text { Top Quintile } & 50.7 & 45.9 \
\hline
\end{array}$$ ​
-Refer to Table 20-2. According to the table, from 1970 to 2020, the Hapland income distribution became

Accepted Answer

A) less equal. 
B) more equal. 
C) more equal at the lowest level of income but less equal at highest level of income. 
D) less equal at the lowest level of income but more equal at highest level of income. 
A) less equal. 
B) more equal. 
C) more equal at the lowest level of income but less equal at highest level of income. 
D) less equal at the lowest level of income but more equal at highest level of income.

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

Table 20-7
Distribution of Income in Imagination
 $$\begin{array} { | l | l | l | } 
\hline \text { Number of Families } & \text { Income Range } & \text { Average Income } \
\hline 23,500 & \text { less than } \$ 18,000 & \$ 15,890 \
\hline 42,410 & \text { between } \$ 18,000 \text { and } \$ 36,000 & \$ 27,450 \
\hline 57,330 & \text { between } \$ 36,000 \text { and } \$ 54,000 & \$ 46,220 \
\hline 63,490 & \text { between } \$ 54,000 \text { and } \$ 72,000 & \$ 65,000 \
\hline 24,770 & \text { between } \$ 72,000 \text { and } \$ 90,000 & \$ 80,790 \
\hline 23,500 & \text { more than } \$ 90,000 & \$ 118,750 \
\hline
\end{array}$$
-Refer to Table 20-7. If the poverty rate in Imagination is 10%, what is the poverty line?

Accepted Answer

The answer of Table 20-7
Distribution of Income in Imagination
 \[\begin{array}...

Question 15

The invisible hand of the marketplace acts to allocate resources efficiently, but it does not necessarily ensure that resources are allocated fairly.

Accepted Answer

A) True 
 B)False

Question 16

Economists Cox and Alm compared the gap between rich and poor and found that the richest 20% was about 2 times better off than the poorest 20% when they compared what data?

Accepted Answer

consumptio

Question 17

Fewer than three percent of families are poor for eight or more years.

Accepted Answer

A) True 
 B)False

Question 18

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

Question 19

Table 20-4
​
   Source: U.S. Bureau of Census
​
​
-Refer to Table 20-4. Comparing data from 2000 and 2017, which of the following statements is correct?

Accepted Answer

A) There has been no change in overall income inequality because the share of income held by the fourth quintile is nearly identical. 
B) Overall income inequality has worsened slightly, as shown by the simultaneous increase in the share of income held by the top quintile and the decrease in the share of income held by the bottom quintile. 
C) Overall income inequality has improved because the share held by the second quintile has declined by 0.6%. 
D) Overall income inequality has improved because the share held by the bottom quintile has declined by 0.5%. 
A) There has been no change in overall income inequality because the share of income held by the fourth quintile is nearly identical. 
B) Overall income inequality has worsened slightly, as shown by the simultaneous increase in the share of income held by the top quintile and the decrease in the share of income held by the bottom quintile. 
C) Overall income inequality has improved because the share held by the second quintile has declined by 0.6%. 
D) Overall income inequality has improved because the share held by the bottom quintile has declined by 0.5%.

Question 20

According to libertarians, the government should redistribute income from rich individuals to poor individuals to achieve a more equal distribution of income.

Accepted Answer

A) True 
 B)False

Exam 20: Income Inequality and Poverty

What measure does the federal government use when setting the official poverty line in the US?

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

People can borrow and lend money to smooth out short term variations in income known as what kind of changes?

Sofia won $2,600 at the blackjack tables on her birthday. Her winnings are an example of

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

Assume you are a critic of welfare reforms that impose a time limit on the number of years a person is eligible for welfare benefits. What is the foundation of your critique?

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

In the United States from 1935 to 2011 the share of total income earned by the bottom fifth of income earners rose and then fell.

Which of the following is not an example of in-kind transfers?

Which of the following is not a characteristic of the Earned Income Tax Credit (EITC)?

Comparing the US to other countries ranked by inequality,

The invisible hand of the marketplace acts to allocate resources efficiently, but it does not necessarily ensure that resources are allocated fairly.

Economists Cox and Alm compared the gap between rich and poor and found that the richest 20% was about 2 times better off than the poorest 20% when they compared what data?

Fewer than three percent of families are poor for eight or more years.

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

Table 20-4 ​ Source: U.S. Bureau of Census ​ ​ -Refer to Table 20-4. Comparing data from 2000 and 2017, which of the following statements is correct?

According to libertarians, the government should redistribute income from rich individuals to poor individuals to achieve a more equal distribution of income.

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 Nations 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

Table 20-4 Source: U.S. Bureau of Census -Refer to Table 20-4. Comparing data from 2000 and 2017, which of the following statements is correct?