Question 1

Based on U.S.income data from 2003,the top fifth of all families received

Accepted Answer

A) more than 10 times more income than the bottom fifth. 
B) approximately 5 times more income than the bottom fifth. 
C) twice as much income as the bottom fifth. 
D) an equal share of income as the bottom fifth. 
A) more than 10 times more income than the bottom fifth. 
B) approximately 5 times more income than the bottom fifth. 
C) twice as much income as the bottom fifth. 
D) an equal share of income as the bottom fifth.

Question 2

A common criticism of government programs that are designed to assist the poor is that

Accepted Answer

A) those who receive assistance rarely meet the criterion for eligibility. 
B) the majority of those below the poverty line refuse to accept government assistance. 
C) they create incentives for people to become "needy." 
D) they typically account for a majority of annual government expenditures. 
A) those who receive assistance rarely meet the criterion for eligibility. 
B) the majority of those below the poverty line refuse to accept government assistance. 
C) they create incentives for people to become "needy." 
D) they typically account for a majority of annual government expenditures.

Question 3

Economic mobility contributes to

Accepted Answer

A) society's ills through making the rich richer. 
B) society's ills through making the poor poorer. 
C) society's prosperity because the children of millionaires are likely to become multimillionaires. 
D) None of the above is correct. 
A) society's ills through making the rich richer. 
B) society's ills through making the poor poorer. 
C) society's prosperity because the children of millionaires are likely to become multimillionaires. 
D) None of the above is correct.

Question 4

In-kind transfers are transfers to the poor

Accepted Answer

A) given in the form of goods and services rather than cash. 
B) including goods, services, and cash. 
C) from private charitable organizations. 
D) from the federal government. 
A) given in the form of goods and services rather than cash. 
B) including goods, services, and cash. 
C) from private charitable organizations. 
D) from the federal government.

Question 5

When measuring income distribution in the United States,the income share of the top fifth of all families is

Accepted Answer

A) over 50 percent. 
B) more than 10 times the income of the bottom fifth. 
C) around 25 percent. 
D) not much different from the income of the top 5 percent. 
A) over 50 percent. 
B) more than 10 times the income of the bottom fifth. 
C) around 25 percent. 
D) not much different from the income of the top 5 percent.

Question 6

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 7

If society chose to maximize average utility rather than minimum utility,

Accepted Answer

A) society would achieve perfect income equality. 
B) society would achieve the maximin objective. 
C) its justice would be more utilitarian than Rawlsian. 
D) its justice would be more Rawlsian than utilitarian. 
A) society would achieve perfect income equality. 
B) society would achieve the maximin objective. 
C) its justice would be more utilitarian than Rawlsian. 
D) its justice would be more Rawlsian than utilitarian.

Question 8

Whether or not policymakers should try to make our society more egalitarian is largely a matter of

Accepted Answer

A) economic efficiency. 
B) political philosophy. 
C) egalitarian principles. 
D) enhanced opportunity. 
A) economic efficiency. 
B) political philosophy. 
C) egalitarian principles. 
D) enhanced opportunity.

Question 9

When the government enacts policies to make the distribution of income more equitable,which of the following occurs?

Accepted Answer

A) a less efficient allocation of resources 
B) a distortion of incentives 
C) altered behavior 
D) All of the above are correct. 
A) a less efficient allocation of resources 
B) a distortion of incentives 
C) altered behavior 
D) All of the above are correct.

Question 10

Suppose that young people often borrow and then repay the loans when they are older.These actions relate to which problem in measuring inequality?

Accepted Answer

A) in-kind transfers 
B) economic life cycle 
C) negative income tax 
D) economic mobility 
A) in-kind transfers 
B) economic life cycle 
C) negative income tax 
D) economic mobility

Question 11

Table 20-1
  
-Refer to Table 20-1.Seventy-five percent of all families have incomes below what level?

Accepted Answer

A) $28,000 
B) $50,000 
C) $85,000 
D) There is insufficient information to answer this question. 
A) $28,000 
B) $50,000 
C) $85,000 
D) There is insufficient information to answer this question.

Question 12

Economists study poverty and income inequality in order to answer which of the following questions?

Accepted Answer

A) What are people's wages? 
B) How does labor-force experience affect wages? 
C) How much inequality is there in society? 
D) How do people adjust their behavior due to taxation? 
A) What are people's wages? 
B) How does labor-force experience affect wages? 
C) How much inequality is there in society? 
D) How do people adjust their behavior due to taxation?

Question 13

The rule for redistribution proposed by John Rawls in his book A Theory of Justice is called the

Accepted Answer

A) "optimal ignorance" rule. 
B) libertarian justice rule. 
C) maximin criterion. 
D) egalitarian criterion. 
A) "optimal ignorance" rule. 
B) libertarian justice rule. 
C) maximin criterion. 
D) egalitarian criterion.

Question 14

What is meant by a perfectly equal distribution of income? Use a graph to depict such a situation.

Accepted Answer

@#IMG-DLM& If income were equally distributed acro

Question 15

Which of the following statements is not correct?

Accepted Answer

A) When most Americans picture child labor, they think of young children working in factories.In fact, many young children in poor countries work on family farms. 
B) Many young children work in poor countries rather than attend school because education is not valued in those countries. 
C) An increase in income for families in poor countries is often associated with an increase in the number of children attending school. 
D) In the past, most policies aimed at deterring child labor focused on educating the parents about why their children should not work. 
A) When most Americans picture child labor, they think of young children working in factories.In fact, many young children in poor countries work on family farms. 
B) Many young children work in poor countries rather than attend school because education is not valued in those countries. 
C) An increase in income for families in poor countries is often associated with an increase in the number of children attending school. 
D) In the past, most policies aimed at deterring child labor focused on educating the parents about why their children should not work.

Question 16

Scenario 20-1
Suppose that a society is made up of five families whose incomes are as follows:
$120,000; $90,000; $30,000; $30,000; and $18,000.
The federal government is considering two potential income tax plans:
Plan A is a negative income tax plan where the taxes owed equal 1/3 of income minus $20,000.
Plan B is a two-tiered plan where the poverty line is $35,000; families earning over $35,000 pay 10% of their income in taxes, and families earning less than $35,000 pay no income tax.
-Refer to Scenario 20-1.Assuming that utility is directly proportional to the cash value of after-tax income,which government policy would an advocate of utilitarianism prefer?

Accepted Answer

A) Plan A 
B) Plan B 
C) either Plan A or Plan B 
D) neither Plan A nor Plan B because any plan that forcibly redistributes income is against the philosophy 
A) Plan A 
B) Plan B 
C) either Plan A or Plan B 
D) neither Plan A nor Plan B because any plan that forcibly redistributes income is against the philosophy

Question 17

The life cycle effect characterizes a lifetime income profile in which income

Accepted Answer

A) tends to follow a seasonal pattern. 
B) rises as a worker gains maturity and experience. 
C) rises and falls in conjunction with the business cycle. 
D) falls during the early years of market activity and peaks at retirement. 
A) tends to follow a seasonal pattern. 
B) rises as a worker gains maturity and experience. 
C) rises and falls in conjunction with the business cycle. 
D) falls during the early years of market activity and peaks at retirement.

Question 18

The marketplace acts to allocate resources

Accepted Answer

A) fairly. 
B) to those most desiring them. 
C) efficiently. 
D) both efficiently and equitably. 
A) fairly. 
B) to those most desiring them. 
C) efficiently. 
D) both efficiently and equitably.

Question 19

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 20

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

Exam 20: Income Inequality and Poverty

Based on U.S.income data from 2003,the top fifth of all families received

A common criticism of government programs that are designed to assist the poor is that

Economic mobility contributes to

In-kind transfers are transfers to the poor

When measuring income distribution in the United States,the income share of the top fifth of all families is

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

If society chose to maximize average utility rather than minimum utility,

Whether or not policymakers should try to make our society more egalitarian is largely a matter of

When the government enacts policies to make the distribution of income more equitable,which of the following occurs?

Suppose that young people often borrow and then repay the loans when they are older.These actions relate to which problem in measuring inequality?

Table 20-1 -Refer to Table 20-1.Seventy-five percent of all families have incomes below what level?

Economists study poverty and income inequality in order to answer which of the following questions?

The rule for redistribution proposed by John Rawls in his book A Theory of Justice is called the

What is meant by a perfectly equal distribution of income? Use a graph to depict such a situation.

Which of the following statements is not correct?

The life cycle effect characterizes a lifetime income profile in which income

The marketplace acts to allocate resources

Liberalism is the political philosophy espoused by

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

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

Filters