Question 1

A typical worker's normal or average income is called

Accepted Answer

A)  the life cycle. 
B)  permanent income. 
C)  transitory income. 
D)  in-kind transfers. 
A)  the life cycle. 
B)  permanent income. 
C)  transitory income. 
D)  in-kind transfers.

Question 2

A utilitarian government must

Accepted Answer

A)  calculate the utility of each individual in society. 
B)  avoid enacting any policies that redistribute income from the rich to the poor. 
C)  balance the gains from greater equality against the losses from distorted incentives. 
D)  pursue policies that do not affect the middle class. 
A)  calculate the utility of each individual in society. 
B)  avoid enacting any policies that redistribute income from the rich to the poor. 
C)  balance the gains from greater equality against the losses from distorted incentives. 
D)  pursue policies that do not affect the middle class.

Question 3

The English philosophers Jeremy Bentham and John Stuart Mill founded the school of thought called

Accepted Answer

A)  liberalism. 
B)  libertarianism. 
C)  mobilism. 
D)  utilitarianism. 
A)  liberalism. 
B)  libertarianism. 
C)  mobilism. 
D)  utilitarianism.

Question 4

Which group (or groups)would be the most upset by wide variation in the income distribution?

Accepted Answer

A)  utilitarians 
B)  utilitarians and liberals 
C)  libertarians 
D)  liberals and libertarians 
A)  utilitarians 
B)  utilitarians and liberals 
C)  libertarians 
D)  liberals and libertarians

Question 5

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 6

Table 20-9
Poverty Thresholds in 2002, 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 20-9.What is the poverty line for a family of six with three children?

Accepted Answer

A)  $21,469 
B)  $24,797 
C)  $25,738 
D)  $28,718 
A)  $21,469 
B)  $24,797 
C)  $25,738 
D)  $28,718

Question 7

Which of the following statements is correct?

Accepted Answer

A)  The poverty line is a relative standard. 
B)  More families are pushed above the poverty line as economic growth pushes the entire income distribution upward. 
C)  Increasing income inequality reduces poverty. 
D)  Economic growth, by definition, affects all families equally. 
A)  The poverty line is a relative standard. 
B)  More families are pushed above the poverty line as economic growth pushes the entire income distribution upward. 
C)  Increasing income inequality reduces poverty. 
D)  Economic growth, by definition, affects all families equally.

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Table 20-3
The Distribution of Income in Hapland
  
-Refer to Table 20-3.If the poverty rate is 23%,where is the poverty line in Hapland?

Accepted Answer

A)  under $45,000 
B)  between $45,000 and $59,999 
C)  between $60,000 and $89,999 
D)  between $90,000 and $119,999 
A)  under $45,000 
B)  between $45,000 and $59,999 
C)  between $60,000 and $89,999 
D)  between $90,000 and $119,999

Question 10

Which of the following is not correct?

Accepted Answer

A)  A negative income tax only applies to working people, so it encourages people to get full-time work. 
B)  Supporters advocate the use of the Earned Income Tax Credit as a way to help the working poor. 
C)  A negative income tax subsidizes the incomes of poor people. 
D)  An advantage of a negative income tax is that it is not based on the number of children, so it does not provide incentives for unmarried women to have children. 
A)  A negative income tax only applies to working people, so it encourages people to get full-time work. 
B)  Supporters advocate the use of the Earned Income Tax Credit as a way to help the working poor. 
C)  A negative income tax subsidizes the incomes of poor people. 
D)  An advantage of a negative income tax is that it is not based on the number of children, so it does not provide incentives for unmarried women to have children.

Question 11

Figure 20-1
  
-Refer to Figure 20-1.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 12

The poverty rate is

Accepted Answer

A)  a measure of income inequality across families. 
B)  the percentage of the population whose family income falls below a specified level. 
C)  an absolute level of income set by the federal government for each family size. 
D)  measured by the number of in-kind transfers that a family receives. 
A)  a measure of income inequality across families. 
B)  the percentage of the population whose family income falls below a specified level. 
C)  an absolute level of income set by the federal government for each family size. 
D)  measured by the number of in-kind transfers that a family receives.

Question 13

The poverty line in the country of Inequalia is $10,000.The distribution of income for Inequalia is as follows:  
The poverty rate in Inequalia is

Accepted Answer

A)  11.1 percent. 
B)  16.7 percent. 
C)  27.8 percent. 
D)  55.5 percent. 
A)  11.1 percent. 
B)  16.7 percent. 
C)  27.8 percent. 
D)  55.5 percent.

Question 14

Critics of the minimum wage argue that

Accepted Answer

A)  labor demand is inelastic so firms can adjust production. 
B)  too many older employees benefit at the expense of teenage workers. 
C)  many minimum-wage earners are teenagers from middle-class families. 
D)  All of the above are correct. 
A)  labor demand is inelastic so firms can adjust production. 
B)  too many older employees benefit at the expense of teenage workers. 
C)  many minimum-wage earners are teenagers from middle-class families. 
D)  All of the above are correct.

Question 15

Figure 20-2
Number of Poor
  
-Refer to Figure 20-2.Between 1965 and 2001,during recessions (the shaded bars)the number of individuals in poverty has

Accepted Answer

A)  increased. 
B)  decreased. 
C)  not changed. 
D)  decreased and then increased. 
A)  increased. 
B)  decreased. 
C)  not changed. 
D)  decreased and then increased.

Question 16

A binding minimum wage

Accepted Answer

A)  affects employees but not employers. 
B)  lowers the productivity of workers. 
C)  raises the cost of labor to firms. 
D)  All of the above are correct. 
A)  affects employees but not employers. 
B)  lowers the productivity of workers. 
C)  raises the cost of labor to firms. 
D)  All of the above are correct.

Question 17

Medicaid and food stamps are

Accepted Answer

A)  available only to the elderly. 
B)  forms of in-kind assistance. 
C)  forms of cash assistance. 
D)  transfer payments. 
A)  available only to the elderly. 
B)  forms of in-kind assistance. 
C)  forms of cash assistance. 
D)  transfer payments.

Question 18

In 2008,the poverty line for a family of four in the U.S.was

Accepted Answer

A)  $56,194. 
B)  $22,025. 
C)  $19,971. 
D)  $12,603. 
A)  $56,194. 
B)  $22,025. 
C)  $19,971. 
D)  $12,603.

Question 19

Governments enact policies to

Accepted Answer

A)  make the distribution of income more efficient. 
B)  make the distribution of income more equal. 
C)  maximize the use of the welfare system. 
D)  minimize the use of in-kind transfers. 
A)  make the distribution of income more efficient. 
B)  make the distribution of income more equal. 
C)  maximize the use of the welfare system. 
D)  minimize the use of in-kind transfers.

Question 20

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

Accepted Answer

A)  a relative level of income. 
B)  an absolute level of income. 
C)  the median income for a family of three. 
D)  the bottom 20 percent of the income distribution. 
A)  a relative level of income. 
B)  an absolute level of income. 
C)  the median income for a family of three. 
D)  the bottom 20 percent of the income distribution.

Exam 20: Income Inequality and Poverty.

A typical worker's normal or average income is called

A utilitarian government must

The English philosophers Jeremy Bentham and John Stuart Mill founded the school of thought called

Which group (or groups)would be the most upset by wide variation in the income distribution?

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 20-9 Poverty Thresholds in 2002, 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 20-9.What is the poverty line for a family of six with three children?

Which of the following statements is correct?

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

Table 20-3 The Distribution of Income in Hapland -Refer to Table 20-3.If the poverty rate is 23%,where is the poverty line in Hapland?

Which of the following is not correct?

Figure 20-1 -Refer to Figure 20-1.The ratio of female-to-male earnings has increased steadily from about 1980 to 2008 because the earnings of men

The poverty rate is

The poverty line in the country of Inequalia is $10,000.The distribution of income for Inequalia is as follows: The poverty rate in Inequalia is

Critics of the minimum wage argue that

Figure 20-2 Number of Poor -Refer to Figure 20-2.Between 1965 and 2001,during recessions (the shaded bars)the number of individuals in poverty has

A binding minimum wage

Medicaid and food stamps are

In 2008,the poverty line for a family of four in the U.S.was

Governments enact policies to

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

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.

Application: 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 Market For the Factors of Production.

Earnings and Discrimination.

The Theory of Consumer Choice.

Frontiers in Microeconomics.

Filters