Question 1

Which conclusion does diminishing marginal utility suggest

Accepted Answer

A) More is always preferred to less. 
B) The well-being of society is maximized when the distribution of income is equal. 
C) The poor are less efficient at spending money than the rich. 
D) The poor receive more satisfaction than the rich from the last dollar they respectively spend. 
A) More is always preferred to less. 
B) The well-being of society is maximized when the distribution of income is equal. 
C) The poor are less efficient at spending money than the rich. 
D) The poor receive more satisfaction than the rich from the last dollar they respectively spend.

Question 2

Which effect is a minimum wage likely to have

Accepted Answer

A) It will create more unemployment in the long run than in the short run. 
B) It affects unskilled labour more since its demand is more inelastic. 
C) It helps the working poor without any cost to the government. 
D) It helps the low-income families more than the teenage workers from middle-class families. 
A) It will create more unemployment in the long run than in the short run. 
B) It affects unskilled labour more since its demand is more inelastic. 
C) It helps the working poor without any cost to the government. 
D) It helps the low-income families more than the teenage workers from middle-class families.

Question 3

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

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 reduce incentives to work. 
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 reduce incentives to work. 
D) They typically account for a majority of annual government expenditures.

Question 4

As a result of the tradeoff between income equality and incentives to work,what do we know about an optimal redistribution policy

Accepted Answer

A) It can never be funded through taxes on wage income. 
B) It must always achieve a full egalitarian society. 
C) It is only consistent with transfers to the middle class. 
D) It always falls short of achieving a full egalitarian society. 
A) It can never be funded through taxes on wage income. 
B) It must always achieve a full egalitarian society. 
C) It is only consistent with transfers to the middle class. 
D) It always falls short of achieving a full egalitarian society.

Question 5

Which question does studying distribution of income help to answer

Accepted Answer

A) How much do people earn? 
B) How much experience is needed in different jobs? 
C) How is inequality in our society measured? 
D) How do people adjust their behaviour due to taxation? 
A) How much do people earn? 
B) How much experience is needed in different jobs? 
C) How is inequality in our society measured? 
D) How do people adjust their behaviour due to taxation?

Question 6

What do advocates of cash payments argue

Accepted Answer

A) In-kind transfers are efficient. 
B) In-kind transfers are inefficient. 
C) In-kind transfers are respectful. 
D) In-kind transfers are ineffective. 
A) In-kind transfers are efficient. 
B) In-kind transfers are inefficient. 
C) In-kind transfers are respectful. 
D) In-kind transfers are ineffective.

Question 7

Explain how a "leaky bucket" can be used to illustrate the utilitarian argument that complete equalization of income should not be attempted.

Accepted Answer

Utilitarians reject complete equalizatio

Question 8

When would libertarianism justify government intervention in the redistribution of income

Accepted Answer

A) if an egalitarian distribution of income is inconsistent with market outcomes 
B) if the income distribution is altered by illegal means (e.g., theft) 
C) if a social planner is needed to smooth out the transitory income stream 
D) if workers lose their jobs as a result of structural changes in the economy 
A) if an egalitarian distribution of income is inconsistent with market outcomes 
B) if the income distribution is altered by illegal means (e.g., theft) 
C) if a social planner is needed to smooth out the transitory income stream 
D) if workers lose their jobs as a result of structural changes in the economy

Question 9

The proper goal of the government,utilitarians claim,is to maximize the sum of utility of everyone in society.

Accepted Answer

A) True 
 B)False

Question 10

Given that people can borrow when they are young,what would the life cycle theory suggest that one's standard of living depends on

Accepted Answer

A) lifetime income rather than annual income 
B) aggregate income rather than annual personal income 
C) annual extended family income rather than annual personal income 
D) income averaged across seasons rather than across years 
A) lifetime income rather than annual income 
B) aggregate income rather than annual personal income 
C) annual extended family income rather than annual personal income 
D) income averaged across seasons rather than across years

Question 11

Which statement best explains the effect of a high-binding minimum wage

Accepted Answer

A) It impacts no one. 
B) It lowers the productivity of workers. 
C) It raises the cost of labour to firms. 
D) It lowers the productivity of workers and raises the cost of labour to firms. 
A) It impacts no one. 
B) It lowers the productivity of workers. 
C) It raises the cost of labour to firms. 
D) It lowers the productivity of workers and raises the cost of labour to firms.

Question 12

What political philosophy is the maximin criterion attributed to

Accepted Answer

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

Question 13

How does the life cycle effect characterize a lifetime income profile

Accepted Answer

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

Question 14

Assume that the government proposes a negative income tax that calculates taxes owed by the following formula: Taxes owed = (1/3 × income) - $10,000.If a family earns an income of $60,000,how does the negative income tax affect them

Accepted Answer

A) They pay $3300 in taxes. 
B) They pay $10,000 in taxes. 
C) They receive a subsidy of $3300. 
D) They receive an income subsidy of $10,000. 
A) They pay $3300 in taxes. 
B) They pay $10,000 in taxes. 
C) They receive a subsidy of $3300. 
D) They receive an income subsidy of $10,000.

Question 15

Some of the fluctuations in the measured poverty rate reflect the form of government assistance rather than the true extent of economic deprivation.

Accepted Answer

A) True 
 B)False

Question 16

Which factor is NOT a reason that data on income distribution and the poverty rate give an incomplete picture of inequality

Accepted Answer

A) in-kind transfers 
B) the economic life cycle 
C) transitory income 
D) economic immobility 
A) in-kind transfers 
B) the economic life cycle 
C) transitory income 
D) economic immobility

Question 17

Assume that the government proposes a negative income tax that calculates taxes owed by the following formula: Taxes owed = (1/3 × income) - $10,000.If a family earns an income of $30,000,how does the negative income tax affect them

Accepted Answer

A) They pay a tax of $1000. 
B) They pay $600 in taxes. 
C) They receive an income subsidy of $500. 
D) They owe $0 in taxes. 
A) They pay a tax of $1000. 
B) They pay $600 in taxes. 
C) They receive an income subsidy of $500. 
D) They owe $0 in taxes.

Question 18

List and then briefly outline 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 19

Based on Canadian income data from 2011,the fourth fifth of all families received approximately how many times as much income as the bottom fifth

Accepted Answer

A) 10 
B) 15 
C) 20 
D) 25 
A) 10 
B) 15 
C) 20 
D) 25

Question 20

The table shows the percentage of a country's total income earned by each one-fifth of families,ranked by annual income.Which country has a more equally distributed income
 Explain your answer.

Accepted Answer

Country A has a more equal income distri

Exam 20: Income Inequality and Poverty

Which conclusion does diminishing marginal utility suggest

Which effect is a minimum wage likely to have

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

As a result of the tradeoff between income equality and incentives to work,what do we know about an optimal redistribution policy

Which question does studying distribution of income help to answer

What do advocates of cash payments argue

Explain how a "leaky bucket" can be used to illustrate the utilitarian argument that complete equalization of income should not be attempted.

When would libertarianism justify government intervention in the redistribution of income

The proper goal of the government,utilitarians claim,is to maximize the sum of utility of everyone in society.

Given that people can borrow when they are young,what would the life cycle theory suggest that one's standard of living depends on

Which statement best explains the effect of a high-binding minimum wage

What political philosophy is the maximin criterion attributed to

How does the life cycle effect characterize a lifetime income profile

Assume that the government proposes a negative income tax that calculates taxes owed by the following formula: Taxes owed = (1/3 × income) - $10,000.If a family earns an income of $60,000,how does the negative income tax affect them

Some of the fluctuations in the measured poverty rate reflect the form of government assistance rather than the true extent of economic deprivation.

Which factor is NOT a reason that data on income distribution and the poverty rate give an incomplete picture of inequality

Assume that the government proposes a negative income tax that calculates taxes owed by the following formula: Taxes owed = (1/3 × income) - $10,000.If a family earns an income of $30,000,how does the negative income tax affect them

List and then briefly outline the three prominent schools of thought in political philosophy.Identify one of the most well-known philosophers in each school.

Based on Canadian income data from 2011,the fourth fifth of all families received approximately how many times as much income as the bottom fifth

The table shows the percentage of a country's total income earned by each one-fifth of families,ranked by annual income.Which country has a more equally distributed income Explain your answer.

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 Markets for the Factors of Production

Earnings and Discrimination

The Theory of Consumer Choice

Frontiers of Microeconomics

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