Question 1

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 2

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

Accepted Answer

A)  collective consensus. 
B)  a notion of fairness engendered by equality. 
C)  diminishing marginal utility. 
D)  rising marginal utility. 
A)  collective consensus. 
B)  a notion of fairness engendered by equality. 
C)  diminishing marginal utility. 
D)  rising marginal utility.

Question 3

Poor families are eligible for financial assistance,without having to demonstrate any additional "need,"

Accepted Answer

A)  under the current welfare system and under a negative income tax. 
B)  under the current welfare system but not under a negative income tax. 
C)  under a negative income tax but not under the current welfare system. 
D)  under neither the current welfare system nor under a negative income tax. 
A)  under the current welfare system and under a negative income tax. 
B)  under the current welfare system but not under a negative income tax. 
C)  under a negative income tax but not under the current welfare system. 
D)  under neither the current welfare system nor under a negative income tax.

Question 4

What is meant by a perfectly equal distribution of income? Use a graph to depict such a situation.

Accepted Answer

@#IMG-DLM& If income were equally distributed acro

Question 5

Which political philosophy focuses on the process of determining the distribution of income rather than on the outcome?

Accepted Answer

A)  utilitarianism 
B)  liberalism 
C)  libertarianism 
D)  welfarism 
A)  utilitarianism 
B)  liberalism 
C)  libertarianism 
D)  welfarism

Question 6

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

Accepted Answer

A)  pre-school children. 
B)  to be enrolled in job training. 
C)  a working head-of-household. 
D)  a low income. 
A)  pre-school children. 
B)  to be enrolled in job training. 
C)  a working head-of-household. 
D)  a low income.

Question 7

If the U.S.government determines that the cost of feeding an urban family of four is $5,200 per year,then the official poverty line for a family of that type is

Accepted Answer

A)  $10,400. 
B)  $15,600. 
C)  $20,800. 
D)  $26,000. 
A)  $10,400. 
B)  $15,600. 
C)  $20,800. 
D)  $26,000.

Question 8

A common criticism of welfare programs is that they

Accepted Answer

A)  create self-reliant individuals. 
B)  encourage strong family values. 
C)  encourage illegitimate births. 
D)  have increasing benefits over time, in real terms. 
A)  create self-reliant individuals. 
B)  encourage strong family values. 
C)  encourage illegitimate births. 
D)  have increasing benefits over time, in real terms.

Question 9

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.

Question 10

Table 20-1
The following table shows the distribution of income in Thomasville.
  
-Refer to Table 20-1.Seventy-five percent of all families have incomes above what level?

Accepted Answer

A)  $28,000 
B)  $50,000 
C)  $85,000 
D)  There is insufficient information to answer this question. 
A)  $28,000 
B)  $50,000 
C)  $85,000 
D)  There is insufficient information to answer this question.

Question 11

Libertarianism identifies a redistribution of income role for government when

Accepted Answer

A)  individual incomes vary widely. 
B)  the income distribution is altered by illegal means (e.g. theft). 
C)  a social planner is needed to smooth out the transitory income stream. 
D)  workers lose their jobs as a result of structural changes in the economy. 
A)  individual incomes vary widely. 
B)  the income distribution is altered by illegal means (e.g. theft). 
C)  a social planner is needed to smooth out the transitory income stream. 
D)  workers lose their jobs as a result of structural changes in the economy.

Question 12

The poverty rate for female households with no spouse present is approximately

Accepted Answer

A)  10 percent. 
B)  20 percent. 
C)  30 percent. 
D)  40 percent. 
A)  10 percent. 
B)  20 percent. 
C)  30 percent. 
D)  40 percent.

Question 13

Explain the concept of diminishing marginal utility,and describe the role that it plays in the utilitarian argument for the redistribution of income.

Accepted Answer

Diminishing marginal utility refers to t

Question 14

The maximin criterion for government policies is associated with

Accepted Answer

A)  the school of thought called utilitarianism. 
B)  the school of thought called liberalism. 
C)  the school of thought called libertarianism. 
D)  the school of thought called stoicism. 
A)  the school of thought called utilitarianism. 
B)  the school of thought called liberalism. 
C)  the school of thought called libertarianism. 
D)  the school of thought called stoicism.

Question 15

Economic mobility in the United States is

Accepted Answer

A)  uncommon. Over 50 percent of poor families remain poor for 8 or more years. 
B)  uncommon. Over 75 percent of poor families remain poor for 8 or more years. 
C)  common. Fewer than 3 percent of poor families remain poor for 8 or more years. 
D)  common. Fewer than 1 percent of poor families remain poor for 8 or more years. 
A)  uncommon. Over 50 percent of poor families remain poor for 8 or more years. 
B)  uncommon. Over 75 percent of poor families remain poor for 8 or more years. 
C)  common. Fewer than 3 percent of poor families remain poor for 8 or more years. 
D)  common. Fewer than 1 percent of poor families remain poor for 8 or more years.

Question 16

Would the maximin criterion achieve perfect income equality?

Accepted Answer

A)  Yes. There would be no way to reallocate resources to raise the utility of the poor. 
B)  Yes. The maximin criterion would eliminate poverty. 
C)  No. It is impossible for complete equality to benefit the worst-off people in society. 
D)  No. Complete equality would reduce incentives to work, which would reduce total income, which would reduce the incomes of the worst-off people in society. 
A)  Yes. There would be no way to reallocate resources to raise the utility of the poor. 
B)  Yes. The maximin criterion would eliminate poverty. 
C)  No. It is impossible for complete equality to benefit the worst-off people in society. 
D)  No. Complete equality would reduce incentives to work, which would reduce total income, which would reduce the incomes of the worst-off people in society.

Question 17

The elderly represent the largest demographic group in poverty.

Accepted Answer

A) True 
 B)False

Question 18

The concept of diminishing marginal utility is embedded in the utilitarian rationale for

Accepted Answer

A)  trickle-down effects. 
B)  enhancing market efficiency. 
C)  redistributing income. 
D)  maintaining the status quo income distribution. 
A)  trickle-down effects. 
B)  enhancing market efficiency. 
C)  redistributing income. 
D)  maintaining the status quo income distribution.

Question 19

The maximin criterion is the idea that the government should aim to maximize the well-being of the worst-off person in society.

Accepted Answer

A) True 
 B)False

Question 20

The United States has more income inequality than Japan,Germany,and Canada.

Accepted Answer

A) True 
 B)False

Exam 20: Income Inequality and Poverty.

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

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

Poor families are eligible for financial assistance,without having to demonstrate any additional "need,"

What is meant by a perfectly equal distribution of income? Use a graph to depict such a situation.

Which political philosophy focuses on the process of determining the distribution of income rather than on the outcome?

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

If the U.S.government determines that the cost of feeding an urban family of four is $5,200 per year,then the official poverty line for a family of that type is

A common criticism of welfare programs is that they

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

Table 20-1 The following table shows the distribution of income in Thomasville. -Refer to Table 20-1.Seventy-five percent of all families have incomes above what level?

Libertarianism identifies a redistribution of income role for government when

The poverty rate for female households with no spouse present is approximately

Explain the concept of diminishing marginal utility,and describe the role that it plays in the utilitarian argument for the redistribution of income.

The maximin criterion for government policies is associated with

Economic mobility in the United States is

Would the maximin criterion achieve perfect income equality?

The elderly represent the largest demographic group in poverty.

The concept of diminishing marginal utility is embedded in the utilitarian rationale for

The maximin criterion is the idea that the government should aim to maximize the well-being of the worst-off person in society.

The United States has more income inequality than Japan,Germany,and Canada.

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.

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