Question 1

Economic mobility in the United States is so great that fewer than

Accepted Answer

A)  3 percent of families are poor for 8 or more years. 
B)  5 percent of families are poor for 8 or more years. 
C)  8 percent of families are poor for 8 or more years. 
D)  10 percent of families are poor for 8 or more years. 
A)  3 percent of families are poor for 8 or more years. 
B)  5 percent of families are poor for 8 or more years. 
C)  8 percent of families are poor for 8 or more years. 
D)  10 percent of families are poor for 8 or more years.

Question 2

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 3

Liberalism is the political philosophy espoused by

Accepted Answer

A)  Robert Nozick. 
B)  John Stuart Mill. 
C)  John Rawls. 
D)  Jeremy Bentham. 
A)  Robert Nozick. 
B)  John Stuart Mill. 
C)  John Rawls. 
D)  Jeremy Bentham.

Question 4

If the U.S.government determines that the cost of feeding an urban family of six is $6,000 per year,then the official poverty line for a family of that type is

Accepted Answer

A)  $6,000. 
B)  $12,000. 
C)  $18,000. 
D)  $36,000. 
A)  $6,000. 
B)  $12,000. 
C)  $18,000. 
D)  $36,000.

Question 5

Which of the following is not a question that economists try to answer when measuring the distribution of income?

Accepted Answer

A)  How many people live in poverty? 
B)  How often do people receive a raise at work? 
C)  How often do people move among income classes? 
D)  What problems arise in measuring the amount of inequality? 
A)  How many people live in poverty? 
B)  How often do people receive a raise at work? 
C)  How often do people move among income classes? 
D)  What problems arise in measuring the amount of inequality?

Question 6

According to the maximin criterion,income should be transferred from the rich to the poor as long as it

Accepted Answer

A)  raises the well-being of the least fortunate. 
B)  does not alter incentives to work and save. 
C)  promotes an equal distribution of income. 
D)  does not lower the welfare of the elderly. 
A)  raises the well-being of the least fortunate. 
B)  does not alter incentives to work and save. 
C)  promotes an equal distribution of income. 
D)  does not lower the welfare of the elderly.

Question 7

The philosopher John Rawls argued that

Accepted Answer

A)  people would choose a more equal distribution of income if they had to determine an economic distribution system before knowing their place in it. 
B)  people would choose income inequality to allow the maximum use of their individual talents. 
C)  government has a role to ensure income equality to prevent social unrest. 
D)  people would choose equal opportunity because it is morally right. 
A)  people would choose a more equal distribution of income if they had to determine an economic distribution system before knowing their place in it. 
B)  people would choose income inequality to allow the maximum use of their individual talents. 
C)  government has a role to ensure income equality to prevent social unrest. 
D)  people would choose equal opportunity because it is morally right.

Question 8

Minimum wage laws

Accepted Answer

A)  benefit all unskilled workers. 
B)  create unemployment, but if demand is relatively elastic, the unemployment effects will be minor. 
C)  may help the nonpoor, such as teenagers from wealthy families. 
D)  reduce poverty by reducing unemployment. 
A)  benefit all unskilled workers. 
B)  create unemployment, but if demand is relatively elastic, the unemployment effects will be minor. 
C)  may help the nonpoor, such as teenagers from wealthy families. 
D)  reduce poverty by reducing unemployment.

Question 9

"Only individual members of society earn income,not society itself." This statement is most closely associated with the political philosophy of a

Accepted Answer

A)  utilitarian. 
B)  liberal. 
C)  libertarian. 
D)  None of the above is correct. 
A)  utilitarian. 
B)  liberal. 
C)  libertarian. 
D)  None of the above is correct.

Question 10

Critics argue that a disadvantage of the Earned Income Tax Credit is that it does not effectively target the working poor because many recipients are the teenage children of middle-income families.

Accepted Answer

A) True 
 B)False

Question 11

The study by economists Cox and Alm found

Accepted Answer

A)  inequality in consumption is much smaller than inequality in annual income. 
B)  inequality in consumption is slightly smaller than inequality in annual income. 
C)  inequality in consumption is slightly larger than inequality in annual income. 
D)  inequality in consumption is much larger than inequality in annual income. 
A)  inequality in consumption is much smaller than inequality in annual income. 
B)  inequality in consumption is slightly smaller than inequality in annual income. 
C)  inequality in consumption is slightly larger than inequality in annual income. 
D)  inequality in consumption is much larger than inequality in annual income.

Question 12

U.S.income data over the last 75 years suggests that the distribution of income

Accepted Answer

A)  has gradually become more equal over the entire time period. 
B)  has gradually become less equal over the entire time period. 
C)  gradually became less equal until about 1970, then became more equal from 1970 to 2008. 
D)  gradually became more equal until about 1970, then became less equal from 1970 to 2008. 
A)  has gradually become more equal over the entire time period. 
B)  has gradually become less equal over the entire time period. 
C)  gradually became less equal until about 1970, then became more equal from 1970 to 2008. 
D)  gradually became more equal until about 1970, then became less equal from 1970 to 2008.

Question 13

Figure 20-3
Panel A
   
Source: U.S. Bureau of the Census
Panel B
   
Source: U.S. Bureau of the Census
-Refer to Figure 20-3.Panel B focuses on children who live in female-headed households.It illustrates the percentage of those children who live in poverty.For example,in 2000,slightly over 57 percent of all children who lived in a female-headed household lived below the poverty line.How is this information related to the graph illustrated in Panel A?

Accepted Answer

A)  The high prevalence of poverty in households headed by women is inversely related to male poverty rates. 
B)  The poverty rates shown in Panel B are found by multiplying the female poverty rates shown in Panel A by 450%. 
C)  The high prevalence of poverty in households headed by women likely explains why female poverty rates are higher than male poverty rates. 
D)  Both b and c are correct. 
A)  The high prevalence of poverty in households headed by women is inversely related to male poverty rates. 
B)  The poverty rates shown in Panel B are found by multiplying the female poverty rates shown in Panel A by 450%. 
C)  The high prevalence of poverty in households headed by women likely explains why female poverty rates are higher than male poverty rates. 
D)  Both b and c are correct.

Question 14

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 eight with two children?

Accepted Answer

A)  $14,494 
B)  $32,812 
C)  $33,121 
D)  $34,780 
A)  $14,494 
B)  $32,812 
C)  $33,121 
D)  $34,780

Question 15

Which of the following statements is not correct?

Accepted Answer

A)  Libertarians are opposed to redistributing income. 
B)  Critics of the welfare system argue that it breaks up families. 
C)  One of the problems with measuring income inequality is valuing in-kind transfers. 
D)  Utilitarians believe that the government should punish crimes but should not redistribute income. 
A)  Libertarians are opposed to redistributing income. 
B)  Critics of the welfare system argue that it breaks up families. 
C)  One of the problems with measuring income inequality is valuing in-kind transfers. 
D)  Utilitarians believe that the government should punish crimes but should not redistribute income.

Question 16

Which of the following statements is correct?

Accepted Answer

A)  A disadvantage of a minimum-wage law is that it may benefit unskilled workers who are not low-income workers. 
B)  A disadvantage of a negative income tax program is that a poor person who chooses not to work many hours would receive a cash benefit. 
C)  A disadvantage 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)  All of the above are correct. 
A)  A disadvantage of a minimum-wage law is that it may benefit unskilled workers who are not low-income workers. 
B)  A disadvantage of a negative income tax program is that a poor person who chooses not to work many hours would receive a cash benefit. 
C)  A disadvantage 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)  All of the above are correct.

Question 17

Which of the following statements is not correct?

Accepted Answer

A)  An advantage of the Earned Income Tax Credit (EIT
C)  is that it targets the working poor better than the minimum wage because it does not benefit teenagers from middle-class families who work summer jobs at the minimum wage. 
B)  A disadvantage of in-kind transfer programs such as food stamps is that they force recipients to purchase from a restricted set of items which may not include things that the poor need the most such as diapers or cleaning supplies. 
C)  A disadvantage of minimum wage laws is that they are expensive for state and local governments to fund. 
D)  Effective minimum wage laws create a surplus of labor. 
A)  An advantage of the Earned Income Tax Credit (EIT
C)  is that it targets the working poor better than the minimum wage because it does not benefit teenagers from middle-class families who work summer jobs at the minimum wage. 
B)  A disadvantage of in-kind transfer programs such as food stamps is that they force recipients to purchase from a restricted set of items which may not include things that the poor need the most such as diapers or cleaning supplies. 
C)  A disadvantage of minimum wage laws is that they are expensive for state and local governments to fund. 
D)  Effective minimum wage laws create a surplus of labor.

Question 18

A negative income tax system would

Accepted Answer

A)  make taxes more regressive. 
B)  sever the link between tax policy and income distribution. 
C)  collect from high-income households and give transfers to low-income households. 
D)  eliminate progressive tax rates. 
A)  make taxes more regressive. 
B)  sever the link between tax policy and income distribution. 
C)  collect from high-income households and give transfers to low-income households. 
D)  eliminate progressive tax rates.

Question 19

The goal of utilitarians is to

Accepted Answer

A)  apply the logic of individual decision making to questions concerning morality and public policy. 
B)  measure happiness and satisfaction. 
C)  redistribute income based on the assumption of increasing marginal utility. 
D)  All of the above are correct. 
A)  apply the logic of individual decision making to questions concerning morality and public policy. 
B)  measure happiness and satisfaction. 
C)  redistribute income based on the assumption of increasing marginal utility. 
D)  All of the above are correct.

Question 20

In comparison to the average poverty rate,

Accepted Answer

A)  children and the elderly are more likely to be poor. 
B)  children and the elderly are less likely to be poor. 
C)  children are more likely to be poor, but the elderly are less likely to be poor. 
D)  children are less likely to be poor, but the elderly are more likely to be poor. 
A)  children and the elderly are more likely to be poor. 
B)  children and the elderly are less likely to be poor. 
C)  children are more likely to be poor, but the elderly are less likely to be poor. 
D)  children are less likely to be poor, but the elderly are more likely to be poor.

Exam 20: Income Inequality and Poverty.

Economic mobility in the United States is so great that fewer than

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

Liberalism is the political philosophy espoused by

If the U.S.government determines that the cost of feeding an urban family of six is $6,000 per year,then the official poverty line for a family of that type is

Which of the following is not a question that economists try to answer when measuring the distribution of income?

According to the maximin criterion,income should be transferred from the rich to the poor as long as it

The philosopher John Rawls argued that

Minimum wage laws

"Only individual members of society earn income,not society itself." This statement is most closely associated with the political philosophy of a

Critics argue that a disadvantage of the Earned Income Tax Credit is that it does not effectively target the working poor because many recipients are the teenage children of middle-income families.

The study by economists Cox and Alm found

U.S.income data over the last 75 years suggests that the distribution of income

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 eight with two children?

Which of the following statements is not correct?

Which of the following statements is correct?

Which of the following statements is not correct?

A negative income tax system would

The goal of utilitarians is to

In comparison to the average poverty rate,

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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