Exam 21: Income Inequity and Poverty

Outline the possible work disincentives created by anti-poverty programs.Is there a way to solve this problem without causing other forms of inefficiency to arise? Explain your answer.

Which of the following statements about anti-poverty programs are generally true? (i) they generate a very low marginal tax rate on income (ii) they create disincentives to work (iii) they discourage saving among recipient groups

A measure of permanent income would be similar to a person's average or 'normal' income.

Diminishing marginal utility suggests that:

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

If anti-poverty programs generate high marginal tax rates they may end up discouraging people from working.

Suppose the government proposes a negative income tax that calculates taxes owed according to the formula TAXES OWED = (1/4* INCOME) - 15 000.Suppose a family only earns $20 000.How much tax would they pay?

Brian earns more than Lynne.A benevolent legislator has proposed taxing Bill in order to supplement Lynne's income.A libertarian would view this proposal as:

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

The utilitarian case for redistributing income is based on the assumption of:

Graph 21-1 -Refer to Graph 21-1.Advocates of minimum wage legislation would suggest that an effective minimum wage would be set at a level:

In general, which of the following would libertarians conclude is more important than equality?

A person's permanent income is:

A permanent income theory suggests that a person's income is composed of predictable life cycle variation and:

The poverty rate has been rising over time.

In the parable of the leaky bucket, a fundamental problem with government redistribution programs is identified.As long as the government only has 'leaky buckets' at its disposal:

With no externalities a competitive market will tend distribute resources: (i) efficiently (ii) fairly (iii) equally

Table 21-1 Country Gattom fifth Serond fifth Middli firth Faurth fifth Top fifth Country X 3 17 18 22 40 Courtry Z 5 18 19 20 38 Given Table 21-1, which country has a more equally distributed income? Explain your answer.

Minimum-wage legislation is likely to be least effective in reducing poverty when the demand for labour is inelastic.

Income inequality is something that occurs in all countries.