Question 1

Which of the following statements is not correct?

Accepted Answer

A) The biggest explanation for international child labor is poverty. 
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) The biggest explanation for international child labor is poverty. 
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 2

"The government should punish crimes and enforce voluntary agreements but not redistribute income." This statement is most closely associated with which political philosophy?

Accepted Answer

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

Question 3

"The government should choose policies to maximize the total utility of society." This statement is most closely associated with which political philosophy?

Accepted Answer

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

Question 4

Opponents of legislation that proposes to limit the time a family can receive welfare benefits are most likely to argue that time limits are undesirable because

Accepted Answer

A) the money saved will be diverted to defense spending. 
B) children will become innocent victims if parents are forced off welfare. 
C) there is no evidence to suggest a pattern of welfare dependency. 
D) long periods on welfare erode work skills. 
A) the money saved will be diverted to defense spending. 
B) children will become innocent victims if parents are forced off welfare. 
C) there is no evidence to suggest a pattern of welfare dependency. 
D) long periods on welfare erode work skills.

Question 5

Economists refer to the regular pattern of income variation over a person's lifetime as the

Accepted Answer

A) life cycle effect. 
B) life pattern effect. 
C) cyclical redundancy effect. 
D) periodic cycle effect. 
A) life cycle effect. 
B) life pattern effect. 
C) cyclical redundancy effect. 
D) periodic cycle effect.

Question 6

Which of the following statements is correct?

Accepted Answer

A) The poverty line is a relative standard. 
B) Economic growth that raises all incomes will decrease the number of families in poverty. 
C) Increasing income inequality reduces poverty. 
D) Economic growth, by definition, affects all families equally. 
A) The poverty line is a relative standard. 
B) Economic growth that raises all incomes will decrease the number of families in poverty. 
C) Increasing income inequality reduces poverty. 
D) Economic growth, by definition, affects all families equally.

Question 7

In 2003,what percentage of U.S.families had income levels below $98,200?

Accepted Answer

A) 5 percent 
B) 20 percent 
C) 80 percent 
D) 95 percent 
A) 5 percent 
B) 20 percent 
C) 80 percent 
D) 95 percent

Question 8

The country that has the highest degree of income inequality is

Accepted Answer

A) the United States. 
B) Germany. 
C) Russia. 
D) South Africa. 
A) the United States. 
B) Germany. 
C) Russia. 
D) South Africa.

Question 9

In 2003,the poverty rate in the United States was approximately

Accepted Answer

A) 2.5 percent. 
B) 12.5 percent. 
C) 20 percent. 
D) 50 percent. 
A) 2.5 percent. 
B) 12.5 percent. 
C) 20 percent. 
D) 50 percent.

Question 10

When incentives to earn income are distorted by income redistribution programs,

Accepted Answer

A) losses can exceed potential gains from greater equality of income. 
B) total income in an economy can fall. 
C) total utility in society can fall. 
D) All of the above are correct. 
A) losses can exceed potential gains from greater equality of income. 
B) total income in an economy can fall. 
C) total utility in society can fall. 
D) All of the above are correct.

Question 11

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 12

Raising total utility is the prime objective 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 13

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 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 14

Medicaid and food stamps are

Accepted Answer

A) available only to the elderly. 
B) forms of in-kind assistance. 
C) forms of cash assistance. 
D) transfer payments. 
A) available only to the elderly. 
B) forms of in-kind assistance. 
C) forms of cash assistance. 
D) transfer payments.

Question 15

"An extra dollar of income gives more additional satisfaction to a poor person than to a rich person." This is an important assumption of which political philosophy?

Accepted Answer

A) utilitarianism 
B) liberalism 
C) libertarianism 
D) All of the above are correct. 
A) utilitarianism 
B) liberalism 
C) libertarianism 
D) All of the above are correct.

Question 16

Government vouchers to purchase food,also known as food stamps,are an example of

Accepted Answer

A) an in-kind transfer. 
B) life-cycle income. 
C) a negative income tax. 
D) the earned income tax credit. 
A) an in-kind transfer. 
B) life-cycle income. 
C) a negative income tax. 
D) the earned income tax credit.

Question 17

Since the early 1970s,average incomes have

Accepted Answer

A) increased, which has reduced the poverty rate. 
B) increased, yet the poverty rate has not decreased appreciably. 
C) decreased, while the poverty rate has remained unchanged. 
D) remained relatively unchanged, while the poverty rate has decreased. 
A) increased, which has reduced the poverty rate. 
B) increased, yet the poverty rate has not decreased appreciably. 
C) decreased, while the poverty rate has remained unchanged. 
D) remained relatively unchanged, while the poverty rate has decreased.

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Figure 20-1
Number of Poor
  
-Refer to Figure 20-1.Between 1965 and 2001,during recessions (the shaded bars)the number of individuals in poverty has

Accepted Answer

A) increased. 
B) decrease. 
C) not changed. 
D) decreased and then increased. 
A) increased. 
B) decrease. 
C) not changed. 
D) decreased and then increased.

Question 20

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.

Exam 20: Income Inequality and Poverty

Which of the following statements is not correct?

"The government should punish crimes and enforce voluntary agreements but not redistribute income." This statement is most closely associated with which political philosophy?

"The government should choose policies to maximize the total utility of society." This statement is most closely associated with which political philosophy?

Opponents of legislation that proposes to limit the time a family can receive welfare benefits are most likely to argue that time limits are undesirable because

Economists refer to the regular pattern of income variation over a person's lifetime as the

Which of the following statements is correct?

In 2003,what percentage of U.S.families had income levels below $98,200?

The country that has the highest degree of income inequality is

In 2003,the poverty rate in the United States was approximately

When incentives to earn income are distorted by income redistribution programs,

Minimum wage laws

Raising total utility is the prime objective of which political philosophy?

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 of eight with two children?

Medicaid and food stamps are

"An extra dollar of income gives more additional satisfaction to a poor person than to a rich person." This is an important assumption of which political philosophy?

Government vouchers to purchase food,also known as food stamps,are an example of

Since the early 1970s,average incomes have

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

Figure 20-1 Number of Poor -Refer to Figure 20-1.Between 1965 and 2001,during recessions (the shaded bars)the number of individuals in poverty has

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

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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