Question 1

Liberalism suggests that public policies should aim to

Accepted Answer

A)  maximize the sum of utility of everyone in society. 
B)  maximize the well-being of the average person in society. 
C)  maximize the well-being of the worst-off person in society. 
D)  minimize the difference between the utility of the best-off person in the society and the utility of the worst-off person in society. 
A)  maximize the sum of utility of everyone in society. 
B)  maximize the well-being of the average person in society. 
C)  maximize the well-being of the worst-off person in society. 
D)  minimize the difference between the utility of the best-off person in the society and the utility of the worst-off person in society.

Question 2

One existing government program that works much like a negative income tax is Medicaid.

Accepted Answer

A) True 
 B)False

Question 3

Based on U.S.data for 2008,the poverty rate is the highest for which group of people?

Accepted Answer

A)  children 
B)  married couples 
C)  female households, no spouse present 
D)  the elderly 
A)  children 
B)  married couples 
C)  female households, no spouse present 
D)  the elderly

Question 4

The poverty rate is the percentage of the population that have a family income level below 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 5

A follower of liberalism would not support a redistribution of income but rather would focus on equalizing opportunities.

Accepted Answer

A) True 
 B)False

Question 6

The table below reflects the levels of total utility received from income for each of four members of a society.
   
a.Assume that the society has the following income distribution:
Peter $3
Paul $7
Mary $5
Jane $3
Is it possible for the government to increase total aggregate utility by redistributing income among members of society? Explain your answer.
b.Assume that the government has $19 to allocate among the four members of society.(Assume that no one has any income to start with.)If the government is interested in distributing income in a way that maximizes aggregate total utility,how should it distribute the $19 of income?
c.Does the table above describe a situation characterized by diminishing marginal utility? Explain your answer.

Accepted Answer

a.No.If a dollar is taken from anyone,th

Question 7

Utilitarians believe that the proper goal of the government is to maximize the sum of the utilities of everyone in society.

Accepted Answer

A) True 
 B)False

Question 8

An example of a transitory change in income is the

Accepted Answer

A)  annual cost of living adjustment to your salary. 
B)  increase in income that results from a job promotion linked to your education. 
C)  increase in income of California orange growers that results from an orange-killing frost in Florida. 
D)  All of the above are correct. 
A)  annual cost of living adjustment to your salary. 
B)  increase in income that results from a job promotion linked to your education. 
C)  increase in income of California orange growers that results from an orange-killing frost in Florida. 
D)  All of the above are correct.

Question 9

An income distribution may not give an accurate picture of the standard of living for the poor because it does not include in-kind transfers.

Accepted Answer

A) True 
 B)False

Question 10

Libertarians believe that

Accepted Answer

A)  it is more important to evaluate the process by which economic outcomes are produced than the outcomes themselves. 
B)  government should attempt to redistribute income from the rich to the poor when the gap between rich and poor is more than 20%. 
C)  equality of income is more important than equality of opportunity. 
D)  it is more important to evaluate economic outcomes first and then the process that produced them. 
A)  it is more important to evaluate the process by which economic outcomes are produced than the outcomes themselves. 
B)  government should attempt to redistribute income from the rich to the poor when the gap between rich and poor is more than 20%. 
C)  equality of income is more important than equality of opportunity. 
D)  it is more important to evaluate economic outcomes first and then the process that produced them.

Question 11

According to a utilitarian,total social utility will be maximized when marginal dollars are distributed to the people with the

Accepted Answer

A)  lowest marginal utility of income. 
B)  highest marginal utility of income. 
C)  highest total utility from their income. 
D)  most productive labor resources. 
A)  lowest marginal utility of income. 
B)  highest marginal utility of income. 
C)  highest total utility from their income. 
D)  most productive labor resources.

Question 12

The distribution of income for Grim is as follows:  
If the poverty rate in Grim is 50 percent,what is the poverty line in Grim?

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 13

Most economists believe that a family bases its spending decisions on its transitory income.

Accepted Answer

A) True 
 B)False

Question 14

The poverty line in the country of Abbyville is $15,000.The distribution of income for Abbyville is as follows:  
The poverty rate in Abbyville is

Accepted Answer

A)  12 percent. 
B)  32 percent. 
C)  50 percent. 
D)  68 percent. 
A)  12 percent. 
B)  32 percent. 
C)  50 percent. 
D)  68 percent.

Question 15

Figure 20-5
  
-Refer to Figure 20-5.If the government imposes a minimum wage above Wₒ,it is likely to

Accepted Answer

A)  increase employment to a level above Qo. 
B)  reduce employment to a level below Qo. 
C)  provide more income to the working poor than they collectively received before the minimum wage was set. 
D)  have no effect on employment. 
A)  increase employment to a level above Qo. 
B)  reduce employment to a level below Qo. 
C)  provide more income to the working poor than they collectively received before the minimum wage was set. 
D)  have no effect on employment.

Question 16

In the Temporary Assistance for Needy Families program,most families

Accepted Answer

A)  must have both parents in the home to qualify. 
B)  are female head-of-household families in which the father is absent. 
C)  have adult children with disabilities living at home. 
D)  are ineligible to receive assistance from other support programs. 
A)  must have both parents in the home to qualify. 
B)  are female head-of-household families in which the father is absent. 
C)  have adult children with disabilities living at home. 
D)  are ineligible to receive assistance from other support programs.

Question 17

Explain what is meant by "in-kind transfer" programs.Briefly outline the advantages and disadvantages of an in-kind transfer program.

Accepted Answer

An in-kind transfer program distributes

Question 18

A negative income tax system is designed to

Accepted Answer

A)  provide in-kind benefits to the poor. 
B)  provide a minimum income to the poor. 
C)  reduce taxes on the rich when their incomes surpass the maximum income tax bracket. 
D)  subsidize food consumption in poor families. 
A)  provide in-kind benefits to the poor. 
B)  provide a minimum income to the poor. 
C)  reduce taxes on the rich when their incomes surpass the maximum income tax bracket. 
D)  subsidize food consumption in poor families.

Question 19

Table 20-2
Percentage of Before-Tax Income Received by Families in Hapland
  
-Refer to Table 20-2.According to the table,from 1950 to 2000,the Hapland income distribution became

Accepted Answer

A)  less equal. 
B)  more equal. 
C)  more equal at the lowest level of income but less equal at highest level of income. 
D)  less equal at the lowest level of income but more equal at highest level of income. 
A)  less equal. 
B)  more equal. 
C)  more equal at the lowest level of income but less equal at highest level of income. 
D)  less equal at the lowest level of income but more equal at highest level of income.

Question 20

Since the early 1970s,average incomes have

Accepted Answer

A)  increased, which has reduced the poverty rate. 
B)  increased, while the poverty rate increased slightly. 
C)  decreased, while the poverty rate has remained unchanged. 
D)  remained unchanged, while the poverty rate has decreased. 
A)  increased, which has reduced the poverty rate. 
B)  increased, while the poverty rate increased slightly. 
C)  decreased, while the poverty rate has remained unchanged. 
D)  remained unchanged, while the poverty rate has decreased.

Exam 20: Income Inequality and Poverty.

Liberalism suggests that public policies should aim to

One existing government program that works much like a negative income tax is Medicaid.

Based on U.S.data for 2008,the poverty rate is the highest for which group of people?

The poverty rate is the percentage of the population that have a family income level below the

A follower of liberalism would not support a redistribution of income but rather would focus on equalizing opportunities.

Utilitarians believe that the proper goal of the government is to maximize the sum of the utilities of everyone in society.

An example of a transitory change in income is the

An income distribution may not give an accurate picture of the standard of living for the poor because it does not include in-kind transfers.

Libertarians believe that

According to a utilitarian,total social utility will be maximized when marginal dollars are distributed to the people with the

The distribution of income for Grim is as follows: If the poverty rate in Grim is 50 percent,what is the poverty line in Grim?

Most economists believe that a family bases its spending decisions on its transitory income.

The poverty line in the country of Abbyville is $15,000.The distribution of income for Abbyville is as follows: The poverty rate in Abbyville is

Figure 20-5 -Refer to Figure 20-5.If the government imposes a minimum wage above Wₒ,it is likely to

In the Temporary Assistance for Needy Families program,most families

Explain what is meant by "in-kind transfer" programs.Briefly outline the advantages and disadvantages of an in-kind transfer program.

A negative income tax system is designed to

Table 20-2 Percentage of Before-Tax Income Received by Families in Hapland -Refer to Table 20-2.According to the table,from 1950 to 2000,the Hapland income distribution became

Since the early 1970s,average incomes have

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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