Question 1

Under a negative income tax program,

Accepted Answer

A)  the government guarantees a minimum level of family income. 
B)  a family must pay income taxes on its welfare check. 
C)  a family receives a stated amount of money from the government plus its members can keep all income earned through work. 
D)  the government reduces the welfare payment by any income earned through work. 
A)  the government guarantees a minimum level of family income. 
B)  a family must pay income taxes on its welfare check. 
C)  a family receives a stated amount of money from the government plus its members can keep all income earned through work. 
D)  the government reduces the welfare payment by any income earned through work.

Question 2

Exhibit 12-7 Negative income tax
 
As shown in Exhibit 12-7, a family of four with no earned income receives ____ from the government.

Accepted Answer

A)  zero payment. 
B)  the break-even income of $40,000. 
C)  a $20,000 payment. 
D)  a $20,000 tax deferment. 
A)  zero payment. 
B)  the break-even income of $40,000. 
C)  a $20,000 payment. 
D)  a $20,000 tax deferment.

Question 3

Exhibit 12-8 Negative income tax for a family
 
Under the negative income tax shown in Exhibit 12-8, what cash payment would a family with no earned income receive from the government?

Accepted Answer

A)  $0. 
B)  $10,000. 
C)  $15,000. 
D)  $30,000. 
A)  $0. 
B)  $10,000. 
C)  $15,000. 
D)  $30,000.

Question 4

Which of the following correctly describes the Lorenz curve? ​

Accepted Answer

A)  ​The Lorenz curve shows that the increasing income inequality in the U.S. society is actually good for the economy. 
B)   The Lorenz curve shows the growth rate in real median family income over time. 
C)  ​The Lorenz curve shows the cumulative distribution of family income, ranked from the poorest to the richest families, and compares that curve with the straight line indicating perfectly equal income distribution. 
D)  ​The Lorenz curve shows the cumulative distribution of family income, ranked from the richest to the poorest families, and compares that curve with the ideal of having all income go to the richest 5 percent of society. 
A)  ​The Lorenz curve shows that the increasing income inequality in the U.S. society is actually good for the economy. 
B)   The Lorenz curve shows the growth rate in real median family income over time. 
C)  ​The Lorenz curve shows the cumulative distribution of family income, ranked from the poorest to the richest families, and compares that curve with the straight line indicating perfectly equal income distribution. 
D)  ​The Lorenz curve shows the cumulative distribution of family income, ranked from the richest to the poorest families, and compares that curve with the ideal of having all income go to the richest 5 percent of society.

Question 5

Exhibit 12-2 Lorenz curve
 
As shown in Exhibit 12-2, the perfect equality line is drawn between points:

Accepted Answer

A)  A and B. 
B)  B and D. 
C)  A and C along the straight line. 
D)  A and C along the curve. 
A)  A and B. 
B)  B and D. 
C)  A and C along the straight line. 
D)  A and C along the curve.

Question 6

Which one of the following examples is a cash assistance program used to fight poverty in the United States?

Accepted Answer

A)  Medicaid. 
B)  SNAP (food stamps). 
C)  Temporary Assistance to Needy Families (TANF) 
D)  Head Start. 
A)  Medicaid. 
B)  SNAP (food stamps). 
C)  Temporary Assistance to Needy Families (TANF) 
D)  Head Start.

Question 7

Exhibit 12-3 Lorenz curve for an economy
 
If this economy's distribution of income becomes more equal, then the Lorenz curve shown in Exhibit 12-3 will:

Accepted Answer

A)  move closer to the 45 ° line. 
B)  become more bowed outward. 
C)  lie above the 45 ° line. 
D)  shift down and to the right. 
A)  move closer to the 45 ° line. 
B)  become more bowed outward. 
C)  lie above the 45 ° line. 
D)  shift down and to the right.

Question 8

If the poverty line in 2017 for a family of four was $24,600, which of the following is correct?

Accepted Answer

A)  The cost of a minimal diet for a family of four was $4,100. 
B)  The cost of a minimal diet for a family of four was $6.150. 
C)  Unemployment benefits covered the first $24,600 of lost income. 
D)  Social security payments for the year totaled a minimum of $24,600 for a family of four. 
A)  The cost of a minimal diet for a family of four was $4,100. 
B)  The cost of a minimal diet for a family of four was $6.150. 
C)  Unemployment benefits covered the first $24,600 of lost income. 
D)  Social security payments for the year totaled a minimum of $24,600 for a family of four.

Question 9

Of the following demographic groups, which has the lowest poverty rate in the U.S.?

Accepted Answer

A)  Families headed by a female with no husband. 
B)  Families in which the "head of the household" has not attained a high-school education. 
C)  Families headed by a male with no wife 
D)  Families in which the "head of the household" has attained at least a bachelor's degree from a college or university. 
A)  Families headed by a female with no husband. 
B)  Families in which the "head of the household" has not attained a high-school education. 
C)  Families headed by a male with no wife 
D)  Families in which the "head of the household" has attained at least a bachelor's degree from a college or university.

Question 10

Exhibit 12-6 Lorenz curves
 
Exhibit 12-6 shows the Lorenz Curve for three countries, I, II, and III. Which of the following statements is true?

Accepted Answer

A)  Country I has the most unequal income distribution. 
B)  Country II has the more equal income distribution than Country I. 
C)  Country I has the most equal income distribution. 
D)  Country III has the most equal income distribution. 
A)  Country I has the most unequal income distribution. 
B)  Country II has the more equal income distribution than Country I. 
C)  Country I has the most equal income distribution. 
D)  Country III has the most equal income distribution.

Question 11

Which of the following is not one of the work disincentive criticisms of welfare programs?

Accepted Answer

A)  Welfare provides income that is easier to obtain than by working, so poor are induced to reduce their work effort. 
B)  Because welfare benefits are paid for with money collected from taxes and these taxes reduce take home pay for those working, the reward for work is reduced. 
C)  Bureaucracy associated with welfare results in more money in the hands of bureaucrats than in the hands of the poor. 
D)  The more a welfare recipient earns from a job, the fewer the benefits he or she receives. 
A)  Welfare provides income that is easier to obtain than by working, so poor are induced to reduce their work effort. 
B)  Because welfare benefits are paid for with money collected from taxes and these taxes reduce take home pay for those working, the reward for work is reduced. 
C)  Bureaucracy associated with welfare results in more money in the hands of bureaucrats than in the hands of the poor. 
D)  The more a welfare recipient earns from a job, the fewer the benefits he or she receives.

Question 12

If there is employment discrimination against minorities, this will cause the:

Accepted Answer

A)  supply of their services to increase, and their wages to fall. 
B)  demand for their services to decline, and their wages to fall. 
C)  supply of their services to decline, and their wages to rise. 
D)  demand for their services to decline, and their wages to rise. 
A)  supply of their services to increase, and their wages to fall. 
B)  demand for their services to decline, and their wages to fall. 
C)  supply of their services to decline, and their wages to rise. 
D)  demand for their services to decline, and their wages to rise.

Question 13

Comparable worth is the principle that:

Accepted Answer

A)  goods and services priced the same have about the same worth. 
B)  the wage rate equals the value of productivity. 
C)  men and women should be paid comparably. 
D)  employees who perform comparable jobs should be paid the same wage. 
A)  goods and services priced the same have about the same worth. 
B)  the wage rate equals the value of productivity. 
C)  men and women should be paid comparably. 
D)  employees who perform comparable jobs should be paid the same wage.

Question 14

Which of the following are not counted when we compare a family's income to the poverty line?

Accepted Answer

A)  food stamps 
B)  social security payments 
C)  unemployment compensation payments 
D)  Temporary Assistance for Needy Families (TANF) 
A)  food stamps 
B)  social security payments 
C)  unemployment compensation payments 
D)  Temporary Assistance for Needy Families (TANF)

Question 15

Make a case for income inequality.

Accepted Answer

First, by rewarding people for their pro

Question 16

Which of the following statements is true ?

Accepted Answer

A)  Discrimination against women and blacks reduces the demand for these workers resulting in lower wages paid these workers. 
B)  Discrimination is no longer a problem in the United States. 
C)  A negative income tax system is a plan where everyone pays the same percentage of their income as taxes. 
D)  A negative income tax system is a plan where those below a certain income receive a cash payment from government. 
A)  Discrimination against women and blacks reduces the demand for these workers resulting in lower wages paid these workers. 
B)  Discrimination is no longer a problem in the United States. 
C)  A negative income tax system is a plan where everyone pays the same percentage of their income as taxes. 
D)  A negative income tax system is a plan where those below a certain income receive a cash payment from government.

Question 17

Using the Lorenz curve, the degree of income inequality is measured by the:

Accepted Answer

A)  line connecting all points for which a given percentage of families receives exactly that cumulative percentage of income. 
B)  distance of the Lorenz curve from the line of perfect equality. 
C)  flat diagonal line that applies to a perfectly elastic demand curve. 
D)  number of times the Lorenz curve crosses the line of perfect equality. 
A)  line connecting all points for which a given percentage of families receives exactly that cumulative percentage of income. 
B)  distance of the Lorenz curve from the line of perfect equality. 
C)  flat diagonal line that applies to a perfectly elastic demand curve. 
D)  number of times the Lorenz curve crosses the line of perfect equality.

Exam 12: Income Distribution Poverty and Discrimination

Under a negative income tax program,

Exhibit 12-7 Negative income tax As shown in Exhibit 12-7, a family of four with no earned income receives ____ from the government.

Exhibit 12-8 Negative income tax for a family Under the negative income tax shown in Exhibit 12-8, what cash payment would a family with no earned income receive from the government?

Which of the following correctly describes the Lorenz curve? ​

Exhibit 12-2 Lorenz curve As shown in Exhibit 12-2, the perfect equality line is drawn between points:

Which one of the following examples is a cash assistance program used to fight poverty in the United States?

Exhibit 12-3 Lorenz curve for an economy If this economy's distribution of income becomes more equal, then the Lorenz curve shown in Exhibit 12-3 will:

If the poverty line in 2017 for a family of four was $24,600, which of the following is correct?

Of the following demographic groups, which has the lowest poverty rate in the U.S.?

Exhibit 12-6 Lorenz curves Exhibit 12-6 shows the Lorenz Curve for three countries, I, II, and III. Which of the following statements is true?

Which of the following is not one of the work disincentive criticisms of welfare programs?

If there is employment discrimination against minorities, this will cause the:

Comparable worth is the principle that:

Which of the following are not counted when we compare a family's income to the poverty line?

Make a case for income inequality.

Which of the following statements is true ?

Using the Lorenz curve, the degree of income inequality is measured by the:

Introducing the Economic Way of Thinking

Production Possibilities Opportunity Cost and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Antitrust and Regulation

Environmental Economics

Gross Domestic Product

Business Cycles and Unemployment

Inflation

The Keynesian Model

The Keynesian Model in Action

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits Surpluses and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

The Phillips Curve and Expectations Theory

International Trade and Finance

Economies in Transition

Growth and the Less Developed Countries

Understanding Direct and Inverse Relationships between Variables

Filters

Which of the following correctly describes the Lorenz curve?