Question 1

What do economists call the regular pattern of income variation over a person's lifetime

Accepted Answer

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

Question 2

Based on data from 2011,approximately what percentage of all income in Canada did the bottom fifth of all families receive

Accepted Answer

A) 1 
B) 8 
C) 12 
D) 48 
A) 1 
B) 8 
C) 12 
D) 48

Question 3

Jeremy earns more than Emily.A benevolent legislator has proposed taxing Jeremy in order to supplement Emily's income.How would a libertarian view this proposal

Accepted Answer

A) as a way to increase social justice 
B) as a way to enhance Emily's income in a socially responsible way 
C) as validation of the superiority of a libertarian maximin criterion over Rawlsian social justice 
D) as an inappropriate role for government, since government cannot morally redistribute income that is not its own 
A) as a way to increase social justice 
B) as a way to enhance Emily's income in a socially responsible way 
C) as validation of the superiority of a libertarian maximin criterion over Rawlsian social justice 
D) as an inappropriate role for government, since government cannot morally redistribute income that is not its own

Question 4

The data used to measure inequality is based on annual income but people really care about their standard of living,so these measurement tools give an incomplete picture.

Accepted Answer

A) True 
 B)False

Question 5

Which statement best explains the difference between annual income and lifetime income

Accepted Answer

A) The distribution of annual income accurately reflects the distribution of living standards. 
B) Lifetime incomes are more equally distributed than annual incomes. 
C) Transitory changes in income generally have a significant impact on a family's standard of living. 
D) Annual income is more equally distributed than permanent income. 
A) The distribution of annual income accurately reflects the distribution of living standards. 
B) Lifetime incomes are more equally distributed than annual incomes. 
C) Transitory changes in income generally have a significant impact on a family's standard of living. 
D) Annual income is more equally distributed than permanent income.

Question 6

What is one reason for movement up the income ladder

Accepted Answer

A) good luck 
B) minimum-wage law 
C) welfare transfer 
D) inflation 
A) good luck 
B) minimum-wage law 
C) welfare transfer 
D) inflation

Question 7

What political party argues for the maximin criterion of maximizing the well-being of the worst-off person in society

Accepted Answer

A) utilitarian 
B) liberalism 
C) libertarianism 
D) conservatism 
A) utilitarian 
B) liberalism 
C) libertarianism 
D) conservatism

Question 8

What does a cross-country comparison of income distributions suggest about Canada

Accepted Answer

A) Canada has one of the most unequal income distributions. 
B) Canada has a higher percentage of poor families and a higher percentage of rich families than most countries. 
C) Canada has a distribution in the middle of the group of countries that collected data. 
D) Canada has relatively low income inequality. 
A) Canada has one of the most unequal income distributions. 
B) Canada has a higher percentage of poor families and a higher percentage of rich families than most countries. 
C) Canada has a distribution in the middle of the group of countries that collected data. 
D) Canada has relatively low income inequality.

Question 9

Economic mobility reflects transitory variation in income but not persistent changes in income.

Accepted Answer

A) True 
 B)False

Question 10

A father earns 10 percent above his generation's average income.What have economists who study economic mobility found that,in Canada,his son will most likely earn

Accepted Answer

A) 5.0 percent below his generation's average income 
B) an income equal to his generation's average income 
C) 1.9 percent above his generation's average income 
D) 3.5 percent above his generation's average income 
A) 5.0 percent below his generation's average income 
B) an income equal to his generation's average income 
C) 1.9 percent above his generation's average income 
D) 3.5 percent above his generation's average income

Question 11

When do people have their highest saving rates

Accepted Answer

A) when they are retired 
B) when they are middle-aged 
C) when they are married with young children 
D) when they are young and single 
A) when they are retired 
B) when they are middle-aged 
C) when they are married with young children 
D) when they are young and single

Question 12

Which aspect of measuring inequality raises no problematic issues

Accepted Answer

A) The measurements usually do not include in-kind transfers. 
B) The measurements use lifetime incomes rather than annual incomes. 
C) The measurements should use permanent income, not including transitory changes. 
D) The measurements should use annual incomes, rather than lifetime incomes. 
A) The measurements usually do not include in-kind transfers. 
B) The measurements use lifetime incomes rather than annual incomes. 
C) The measurements should use permanent income, not including transitory changes. 
D) The measurements should use annual incomes, rather than lifetime incomes.

Question 13

Who espoused the view that was later coined "liberalism"

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 14

Which country has the highest inequality of income

Accepted Answer

A) United States 
B) China 
C) Russia 
D) South Africa 
A) United States 
B) China 
C) Russia 
D) South Africa

Question 15

What would a negative income tax system do

Accepted Answer

A) It would make taxes more regressive. 
B) It would sever the link between tax policy and income distribution. 
C) It would collect from high-income households and give transfers to low-income households. 
D) It would eliminate tax progressivity. 
A) It would make taxes more regressive. 
B) It would sever the link between tax policy and income distribution. 
C) It would collect from high-income households and give transfers to low-income households. 
D) It would eliminate tax progressivity.

Question 16

According to the maximin criterion,income would be transferred from the rich to the poor as long as it does which of the following

Accepted Answer

A) raises the well-being of the least fortunate 
B) does not alter incentives to work and save 
C) promotes an egalitarian distribution of income 
D) enhances the welfare of workers 
A) raises the well-being of the least fortunate 
B) does not alter incentives to work and save 
C) promotes an egalitarian distribution of income 
D) enhances the welfare of workers

Question 17

What are the effects of a government policy of redistributing income

Accepted Answer

A) It makes income distribution more equitable, and it also makes the allocation of resources more efficient. 
B) It makes income distribution more equitable, but it makes the allocation of resources less efficient. 
C) It makes income distribution less equitable, and it also makes the allocation of resources less efficient. 
D) It makes income distribution less equitable, but it makes the allocation of resources more efficient. 
A) It makes income distribution more equitable, and it also makes the allocation of resources more efficient. 
B) It makes income distribution more equitable, but it makes the allocation of resources less efficient. 
C) It makes income distribution less equitable, and it also makes the allocation of resources less efficient. 
D) It makes income distribution less equitable, but it makes the allocation of resources more efficient.

Question 18

What is the official measurement of the poverty line in Canada? What is the problem related to this measurement? What is the new “basic needs” measurement based on?

Accepted Answer

Statistics Canada produces an annual est

Question 19

The table below reflects the levels of total utility received from income for each of four members of a society.
   
a.Assume that the society has the following income distribution:
Peter: $3
Paul: $7
Mary: $5
Jane: $3
Is it possible for the government to increase total aggregate utility by redistributing income among members of society
 Explain your answer.
b.Assume that the government has $19 to allocate among the four members of society.(Assume that no one has any income to start with.) If the government is interested in distributing income in a way that maximizes aggregate total utility, how should it distribute the $19 of income
c.Does the table above describe a situation characterized by diminishing marginal utility? Explain your answer.

Accepted Answer

a.No.If a dollar is taken from anyone,th

Question 20

What does a family's ability to buy goods and services largely depend on

Accepted Answer

A) its in-kind transfers 
B) its annual income 
C) its transitory income 
D) its permanent income 
A) its in-kind transfers 
B) its annual income 
C) its transitory income 
D) its permanent income

Exam 20: Income Inequality and Poverty

What do economists call the regular pattern of income variation over a person's lifetime

Based on data from 2011,approximately what percentage of all income in Canada did the bottom fifth of all families receive

Jeremy earns more than Emily.A benevolent legislator has proposed taxing Jeremy in order to supplement Emily's income.How would a libertarian view this proposal

The data used to measure inequality is based on annual income but people really care about their standard of living,so these measurement tools give an incomplete picture.

Which statement best explains the difference between annual income and lifetime income

What is one reason for movement up the income ladder

What political party argues for the maximin criterion of maximizing the well-being of the worst-off person in society

What does a cross-country comparison of income distributions suggest about Canada

Economic mobility reflects transitory variation in income but not persistent changes in income.

A father earns 10 percent above his generation's average income.What have economists who study economic mobility found that,in Canada,his son will most likely earn

When do people have their highest saving rates

Which aspect of measuring inequality raises no problematic issues

Who espoused the view that was later coined "liberalism"

Which country has the highest inequality of income

What would a negative income tax system do

According to the maximin criterion,income would be transferred from the rich to the poor as long as it does which of the following

What are the effects of a government policy of redistributing income

What is the official measurement of the poverty line in Canada? What is the problem related to this measurement? What is the new “basic needs” measurement based on?

What does a family's ability to buy goods and services largely depend on

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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