Question 1

In the United States,a typical worker's income peaks around age

Accepted Answer

A) 65. 
B) 50. 
C) 40. 
D) 30. 
A) 65. 
B) 50. 
C) 40. 
D) 30.

Question 2

Susan won $2,000 at the blackjack tables on her birthday.Her winnings are an example of

Accepted Answer

A) permanent income. 
B) life-cycle income. 
C) transitory income. 
D) an in-kind transfer. 
A) permanent income. 
B) life-cycle income. 
C) transitory income. 
D) an in-kind transfer.

Question 3

When a government enacts policies that redistribute income,which of the following will not occur?

Accepted Answer

A) The government will distort incentives. 
B) Income will be fairly distributed. 
C) People will alter their market behaviors. 
D) Markets will become less efficient at allocating resources to their highest valued use. 
A) The government will distort incentives. 
B) Income will be fairly distributed. 
C) People will alter their market behaviors. 
D) Markets will become less efficient at allocating resources to their highest valued use.

Question 4

Although globalization has reduced income inequality,the number of people living in extreme poverty has remained unchanged.

Accepted Answer

A) True 
 B)False

Question 5

When the government taxes income as part of a redistribution program,

Accepted Answer

A) the poor pay higher taxes. 
B) the rich always benefit more than the poor. 
C) the poor are encouraged to work. 
D) incentives to earn income are diminished. 
A) the poor pay higher taxes. 
B) the rich always benefit more than the poor. 
C) the poor are encouraged to work. 
D) incentives to earn income are diminished.

Question 6

The maximin criterion is attributed to which political philosophy?

Accepted Answer

A) utilitarianism 
B) liberalism 
C) libertarianism 
D) None of the above is correct. 
A) utilitarianism 
B) liberalism 
C) libertarianism 
D) None of the above is correct.

Question 7

Raising the welfare of the worst-off person in society is an important goal of which political philosophy?

Accepted Answer

A) utilitarianism 
B) liberalism 
C) libertarianism 
D) None of the above is correct. 
A) utilitarianism 
B) liberalism 
C) libertarianism 
D) None of the above is correct.

Question 8

Libertarians believe that the government should enforce individual rights to ensure that all people have the same opportunities to use their talents to achieve success.

Accepted Answer

A) True 
 B)False

Question 9

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 10

Which of the following is associated with worldwide economic growth?

Accepted Answer

A) A decrease in individual income inequality worldwide. 
B) An increase in free trade. 
C) The establishment of stronger property rights. 
D) All of the above are correct. 
A) A decrease in individual income inequality worldwide. 
B) An increase in free trade. 
C) The establishment of stronger property rights. 
D) All of the above are correct.

Question 11

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 12

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 13

Which of the following statements is not correct?

Accepted Answer

A) The percentage of the population that suffers from long-term poverty is far smaller than the percentage of the population that suffers from short-term poverty because there is a high level of economic mobility in the United States. 
B) Permanent income is a better measure of a family's ability to buy the necessities of life than is transitory income. 
C) The economic life cycle theory explains why gifts of goods and services reduce poverty for the very young and the very old. 
D) Because people can borrow and save to smooth out changes in income, their standard of living in any one year depends more on lifetime income than on a particular year's income. 
A) The percentage of the population that suffers from long-term poverty is far smaller than the percentage of the population that suffers from short-term poverty because there is a high level of economic mobility in the United States. 
B) Permanent income is a better measure of a family's ability to buy the necessities of life than is transitory income. 
C) The economic life cycle theory explains why gifts of goods and services reduce poverty for the very young and the very old. 
D) Because people can borrow and save to smooth out changes in income, their standard of living in any one year depends more on lifetime income than on a particular year's income.

Question 14

Briefly describe the three prominent schools of thought in political philosophy.Identify one of the most well-known philosophers in each school.

Accepted Answer

According to utilitarianism,the governme

Question 15

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 16

Table 20-2
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 20-2.What is the poverty line for a family with one 35-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

Question 17

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 18

Which of the following does not explain the rise in income inequality from 1970 to 2003?

Accepted Answer

A) increased international trade with low-wage countries 
B) changes in technology 
C) a reduction in the demand for unskilled labor 
D) an increase in minimum wages 
A) increased international trade with low-wage countries 
B) changes in technology 
C) a reduction in the demand for unskilled labor 
D) an increase in minimum wages

Question 19

Supporters of welfare reform argue that

Accepted Answer

A) childhood literacy rates have increased. 
B) private charities have provided sufficient child-care resources for working mothers. 
C) employment has increased among the demographic groups traditionally on welfare, including single mothers. 
D) All of the above are correct. 
A) childhood literacy rates have increased. 
B) private charities have provided sufficient child-care resources for working mothers. 
C) employment has increased among the demographic groups traditionally on welfare, including single mothers. 
D) All of the above are correct.

Question 20

Figure 20-2
Poverty Rates by Age
  
-Refer to Figure 20-2.In 2001,the percent of children under age 18 in poverty is

Accepted Answer

A) higher than both the percentage of adults aged 18 to 64 and the percentage of elderly aged 65 years and over in poverty. 
B) higher than the percentage of adults aged 18 to 64 but is lower than the percentage of elderly aged 65 years and over in poverty. 
C) lower than both the percentage of adults aged18 to 64 and the percentage of elderly aged 65 years and over in poverty. 
D) lower than the percentage of adults aged 18 to 64 but is higher than the percentage of elderly aged 65 years and over in poverty. 
A) higher than both the percentage of adults aged 18 to 64 and the percentage of elderly aged 65 years and over in poverty. 
B) higher than the percentage of adults aged 18 to 64 but is lower than the percentage of elderly aged 65 years and over in poverty. 
C) lower than both the percentage of adults aged18 to 64 and the percentage of elderly aged 65 years and over in poverty. 
D) lower than the percentage of adults aged 18 to 64 but is higher than the percentage of elderly aged 65 years and over in poverty.

Exam 20: Income Inequality and Poverty

In the United States,a typical worker's income peaks around age

Susan won $2,000 at the blackjack tables on her birthday.Her winnings are an example of

When a government enacts policies that redistribute income,which of the following will not occur?

Although globalization has reduced income inequality,the number of people living in extreme poverty has remained unchanged.

When the government taxes income as part of a redistribution program,

The maximin criterion is attributed to which political philosophy?

Raising the welfare of the worst-off person in society is an important goal of which political philosophy?

Libertarians believe that the government should enforce individual rights to ensure that all people have the same opportunities to use their talents to achieve success.

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

Which of the following is associated with worldwide economic growth?

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

People have their highest saving rates when they are

Which of the following statements is not correct?

Briefly describe the three prominent schools of thought in political philosophy.Identify one of the most well-known philosophers in each school.

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.

Table 20-2 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 20-2.What is the poverty line for a family with one 35-year-old adult and one child?

In the Temporary Assistance for Needy Families program,most families

Which of the following does not explain the rise in income inequality from 1970 to 2003?

Supporters of welfare reform argue that

Figure 20-2 Poverty Rates by Age -Refer to Figure 20-2.In 2001,the percent of children under age 18 in poverty is

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Applications

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

Oligopoly

Monopolistic Competition

The Markets for the Factors of Production

Earnings and Discrimination

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short Run Trade Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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