Question 1

Explain what information is contained in the poverty rate statistic.Are there problems in using an absolute scale to measure poverty? If so,explain them.

Accepted Answer

The poverty rate is the percentage of th

Question 2

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 3

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

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements is correct?

Accepted Answer

A)  Followers of the liberalism political philosophy believe that society should maximize the total of individual utilities. 
B)  The poverty line is adjusted for regional differences in the costs of raising children. 
C)  One advantage to the Earned Income Tax Credit (EIT
C)  is that it benefits the working poor. 
D)  Libertarians pursue policies to redistribute income from the rich to the poor. 
A)  Followers of the liberalism political philosophy believe that society should maximize the total of individual utilities. 
B)  The poverty line is adjusted for regional differences in the costs of raising children. 
C)  One advantage to the Earned Income Tax Credit (EIT
C)  is that it benefits the working poor. 
D)  Libertarians pursue policies to redistribute income from the rich to the poor.

Question 5

Table 20-4
   
Source: U.S. Bureau of Census
-Refer to Table 20-4.Comparing data from 2000 and 2007,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 fifth is identical. 
B)  Overall income inequality has worsened slightly, as shown by the simultaneous increase in the share of income held by the top fifth and the decrease in the share of income held by the bottom fifth. 
C)  Overall income inequality has improved because the share held by the middle fifth has declined by almost 1%. 
D)  None of the above is correct. 
A)  There has been no change in overall income inequality because the share of income held by the fourth fifth is identical. 
B)  Overall income inequality has worsened slightly, as shown by the simultaneous increase in the share of income held by the top fifth and the decrease in the share of income held by the bottom fifth. 
C)  Overall income inequality has improved because the share held by the middle fifth has declined by almost 1%. 
D)  None of the above is correct.

Question 6

The 2008 U.S.distribution of income shows that the top 5 percent of families have approximately what share of income?

Accepted Answer

A)  1 percent 
B)  5 percent 
C)  10 percent 
D)  20 percent 
A)  1 percent 
B)  5 percent 
C)  10 percent 
D)  20 percent

Question 7

Table 20-8
   
Source: U.S. Bureau of Census
-Refer to Table 20-8.In 2008,the bottom 60% of families has

Accepted Answer

A)  about 14% of total income in the U.S. 
B)  about 29% of total income in the U.S. 
C)  about 50% of total income in the U.S. 
D)  about 73% of total income in the U.S. 
A)  about 14% of total income in the U.S. 
B)  about 29% of total income in the U.S. 
C)  about 50% of total income in the U.S. 
D)  about 73% of total income in the U.S.

Question 8

What percent of families are poor for eight or more years?

Accepted Answer

A)  more than 20 percent 
B)  between 15 and 20 prcent 
C)  approximately 10 percent 
D)  less than 3 percent 
A)  more than 20 percent 
B)  between 15 and 20 prcent 
C)  approximately 10 percent 
D)  less than 3 percent

Question 9

The income level below which families are said to be poor is known as the

Accepted Answer

A)  income maintenance threshold. 
B)  poverty line. 
C)  bottom quintile of the income distribution. 
D)  minimum wage. 
A)  income maintenance threshold. 
B)  poverty line. 
C)  bottom quintile of the income distribution. 
D)  minimum wage.

Question 10

In the United States,labor earnings are what percent of total income?

Accepted Answer

A)  75 percent 
B)  70 percent 
C)  65 percent 
D)  50 percent 
A)  75 percent 
B)  70 percent 
C)  65 percent 
D)  50 percent

Question 11

People have their highest saving rates when they are

Accepted Answer

A)  retired. 
B)  middle-aged. 
C)  married with young children. 
D)  young and single. 
A)  retired. 
B)  middle-aged. 
C)  married with young children. 
D)  young and single.

Question 12

Which of the following statements illustrates diminishing marginal utility?

Accepted Answer

A)  An extra dollar of income to a poor person provides that person with more additional utility than does an extra dollar to a rich person. 
B)  An extra dollar of income to a poor person provides that person with less additional utility than does an extra dollar to a rich person. 
C)  An extra dollar of income to a poor person provides that person with the same additional utility as does an extra dollar to a rich person. 
D)  An extra dollar of income to a poor person provides that person with the same total utility as does an extra dollar to a rich person. 
A)  An extra dollar of income to a poor person provides that person with more additional utility than does an extra dollar to a rich person. 
B)  An extra dollar of income to a poor person provides that person with less additional utility than does an extra dollar to a rich person. 
C)  An extra dollar of income to a poor person provides that person with the same additional utility as does an extra dollar to a rich person. 
D)  An extra dollar of income to a poor person provides that person with the same total utility as does an extra dollar to a rich person.

Question 13

The rule for redistribution proposed by John Rawls in his book A Theory of Justice is called the

Accepted Answer

A)  "optimal ignorance" rule. 
B)  libertarian justice rule. 
C)  maximin criterion. 
D)  egalitarian criterion. 
A)  "optimal ignorance" rule. 
B)  libertarian justice rule. 
C)  maximin criterion. 
D)  egalitarian criterion.

Question 14

The maximin criterion is attributed to which political philosophy?

Accepted Answer

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

Question 15

Suppose society consists of three individuals: Andy,Bill,and Carl.Andy has $20,000 of income,Bill has $40,000 of income,and Carl has $60,000 of income.A utilitarian would argue that

Accepted Answer

A)  taking $1 from Carl and giving it to Andy would increase society's total utility. 
B)  taking $1 from Carl and giving it to Bill would increase society's total utility. 
C)  taking $1 from Bill and giving it to Andy would increase society's total utility. 
D)  All of the above are correct. 
A)  taking $1 from Carl and giving it to Andy would increase society's total utility. 
B)  taking $1 from Carl and giving it to Bill would increase society's total utility. 
C)  taking $1 from Bill and giving it to Andy would increase society's total utility. 
D)  All of the above are correct.

Question 16

Assume that the government proposes a negative income tax that calculates the taxes owed as follows: Taxes Owed = (1/3 Income)- 10,000.A family that earns an income of $60,000 will

Accepted Answer

A)  pay $10,000 in taxes. 
B)  receive an income subsidy of $3,000. 
C)  receive an income subsidy of $10,000. 
D)  neither pay taxes nor receive an income subsidy. 
A)  pay $10,000 in taxes. 
B)  receive an income subsidy of $3,000. 
C)  receive an income subsidy of $10,000. 
D)  neither pay taxes nor receive an income subsidy.

Question 17

Table 20-1
The following table shows the distribution of income in Thomasville.
  
-Refer to Table 20-1.If the poverty line was $22,063,what would be the poverty rate?

Accepted Answer

A)  less than 25% 
B)  between 25% and 50% 
C)  between 50% and 75% 
D)  There is insufficient information to answer this question. 
A)  less than 25% 
B)  between 25% and 50% 
C)  between 50% and 75% 
D)  There is insufficient information to answer this question.

Question 18

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?

Accepted Answer

A)  $5,000 
B)  $10,000 
C)  $15,000 
D)  $20,000 
A)  $5,000 
B)  $10,000 
C)  $15,000 
D)  $20,000

Question 19

Which of the following statements is correct?

Accepted Answer

A)  An advantage of a minimum-wage law is that it may benefit unskilled workers who are not low-income workers. 
B)  An advantage of a negative income tax program is that a poor person who chooses not to work many hours would receive a cash benefit. 
C)  An advantage of an Earned Income Tax Credit (EIT
C)  is that a person who is unable to work due to a disability does not benefit from the program. 
D)  Welfare reform enacted in 1996 limited the amount of time recipients could stay on welfare. 
A)  An advantage of a minimum-wage law is that it may benefit unskilled workers who are not low-income workers. 
B)  An advantage of a negative income tax program is that a poor person who chooses not to work many hours would receive a cash benefit. 
C)  An advantage of an Earned Income Tax Credit (EIT
C)  is that a person who is unable to work due to a disability does not benefit from the program. 
D)  Welfare reform enacted in 1996 limited the amount of time recipients could stay on welfare.

Question 20

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 with one 68-year-old adult and one child?

Accepted Answer

A)  $8,628 
B)  $9,359 
C)  $12,353 
D)  $12,400 
A)  $8,628 
B)  $9,359 
C)  $12,353 
D)  $12,400

Exam 20: Income Inequality and Poverty.

Explain what information is contained in the poverty rate statistic.Are there problems in using an absolute scale to measure poverty? If so,explain them.

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?

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

Which of the following statements is correct?

Table 20-4 Source: U.S. Bureau of Census -Refer to Table 20-4.Comparing data from 2000 and 2007,which of the following statements is correct?

The 2008 U.S.distribution of income shows that the top 5 percent of families have approximately what share of income?

Table 20-8 Source: U.S. Bureau of Census -Refer to Table 20-8.In 2008,the bottom 60% of families has

What percent of families are poor for eight or more years?

The income level below which families are said to be poor is known as the

In the United States,labor earnings are what percent of total income?

People have their highest saving rates when they are

Which of the following statements illustrates diminishing marginal utility?

The rule for redistribution proposed by John Rawls in his book A Theory of Justice is called the

The maximin criterion is attributed to which political philosophy?

Suppose society consists of three individuals: Andy,Bill,and Carl.Andy has $20,000 of income,Bill has $40,000 of income,and Carl has $60,000 of income.A utilitarian would argue that

Assume that the government proposes a negative income tax that calculates the taxes owed as follows: Taxes Owed = (1/3 Income)- 10,000.A family that earns an income of $60,000 will

Table 20-1 The following table shows the distribution of income in Thomasville. -Refer to Table 20-1.If the poverty line was $22,063,what would be the poverty rate?

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?

Which of the following statements is correct?

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 with one 68-year-old adult and one child?

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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