Question 1

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 2

Figure 20-2
Poverty Rates by Age  
-Refer to Figure 20-2.In 2001,the percent of adults between aged 18 and 64 in poverty is

Accepted Answer

A)  higher than both the percentage of children under age 18 and the percentage of elderly aged 65 and over in poverty. 
B)  higher than the percentage of children under age 18 but is lower than the percentage of elderly aged 65 and over in poverty. 
C)  is lower than both the percentage of children under age 18 and the percentage of elderly aged 65 and over in poverty. 
D)  is lower than the percentage of children under age 18 and is equal to the percentage of elderly aged 65 and over in poverty. 
A)  higher than both the percentage of children under age 18 and the percentage of elderly aged 65 and over in poverty. 
B)  higher than the percentage of children under age 18 but is lower than the percentage of elderly aged 65 and over in poverty. 
C)  is lower than both the percentage of children under age 18 and the percentage of elderly aged 65 and over in poverty. 
D)  is lower than the percentage of children under age 18 and is equal to the percentage of elderly aged 65 and over in poverty.

Question 3

Which of the following statements is not correct?

Accepted Answer

A)  Welfare programs may encourage illegitimate births. 
B)  The decline in welfare benefits since the 1970s has been associated with a decline in the percentage of children living with a single parent. 
C)  Welfare programs may reduce incentives for people to work. 
D)  A negative income tax program uses tax revenues collected from high-income families to provide cash subsidies to low-income families. 
A)  Welfare programs may encourage illegitimate births. 
B)  The decline in welfare benefits since the 1970s has been associated with a decline in the percentage of children living with a single parent. 
C)  Welfare programs may reduce incentives for people to work. 
D)  A negative income tax program uses tax revenues collected from high-income families to provide cash subsidies to low-income families.

Question 4

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)  tax evasion declined among employers of former welfare recipients. 
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)  tax evasion declined among employers of former welfare recipients.

Question 5

Which of the following programs to alleviate poverty would be most favored by philosopher Robert Nozick and why?

Accepted Answer

A)  A negative income tax because it would maximize the minimum income of members of society. 
B)  An Earned Income Tax Credit (EIT
C) because a policy that rewards the working poor would be the most just. 
C)  An in-kind transfer program because it would maximize the total utility of all members of society. 
D)  None of the programs would be favored because each of them forcibly redistributes income that was fairly,if not equally,earned. 
A)  A negative income tax because it would maximize the minimum income of members of society. 
B)  An Earned Income Tax Credit (EIT
C) because a policy that rewards the working poor would be the most just. 
C)  An in-kind transfer program because it would maximize the total utility of all members of society. 
D)  None of the programs would be favored because each of them forcibly redistributes income that was fairly,if not equally,earned.

Question 6

Suppose a society consists of only two people: John and Jane.A utilitarian would say that the proper role of government in this society is to

Accepted Answer

A)  equalize the incomes of John and Jane. 
B)  equalize John's utility and Jane's utility. 
C)  equalize John's marginal utility and Jane's marginal utility. 
D)  maximize the sum of John's utility and Jane's utility. 
A)  equalize the incomes of John and Jane. 
B)  equalize John's utility and Jane's utility. 
C)  equalize John's marginal utility and Jane's marginal utility. 
D)  maximize the sum of John's utility and Jane's utility.

Question 7

Standard measurements of the degree of income inequality take both money income and in-kind transfers into account.

Accepted Answer

A) True 
 B)False

Question 8

In the parable of the leaky bucket,a fundamental problem with government redistribution programs is identified.As long as the government only has "leaky buckets" at its disposal,

Accepted Answer

A)  the costs of welfare programs will exceed the benefits. 
B)  it should not try to reach complete equality in income. 
C)  income equality will be the best policy option. 
D)  equality of economic opportunity will reduce society's utility. 
A)  the costs of welfare programs will exceed the benefits. 
B)  it should not try to reach complete equality in income. 
C)  income equality will be the best policy option. 
D)  equality of economic opportunity will reduce society's utility.

Question 9

The United States has relatively greater income

Accepted Answer

A)  inequality than developing countries but greater equality than other developed countries. 
B)  inequality than both developing and other developed countries. 
C)  equality than developing countries but greater inequality than other developed countries. 
D)  equality than both developing and other developed countries. 
A)  inequality than developing countries but greater equality than other developed countries. 
B)  inequality than both developing and other developed countries. 
C)  equality than developing countries but greater inequality than other developed countries. 
D)  equality than both developing and other developed countries.

Question 10

Critics of welfare reform argue that

Accepted Answer

A)  drug addiction has increased among the working poor. 
B)  the emphasis on work has forced many mothers into low-paying jobs while not providing adequate child care. 
C)  homelessness has increased dramatically. 
D)  the number of people on welfare rolls increased after reform. 
A)  drug addiction has increased among the working poor. 
B)  the emphasis on work has forced many mothers into low-paying jobs while not providing adequate child care. 
C)  homelessness has increased dramatically. 
D)  the number of people on welfare rolls increased after reform.

Question 11

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 12

Internet access is the most important factor explaining reductions in child labor in Vietnam.

Accepted Answer

A) True 
 B)False

Exam 20: Income Inequality and Poverty

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.

Figure 20-2 Poverty Rates by Age -Refer to Figure 20-2.In 2001,the percent of adults between aged 18 and 64 in poverty is

Which of the following statements is not correct?

Supporters of welfare reform argue that

Which of the following programs to alleviate poverty would be most favored by philosopher Robert Nozick and why?

Suppose a society consists of only two people: John and Jane.A utilitarian would say that the proper role of government in this society is to

Standard measurements of the degree of income inequality take both money income and in-kind transfers into account.

In the parable of the leaky bucket,a fundamental problem with government redistribution programs is identified.As long as the government only has "leaky buckets" at its disposal,

The United States has relatively greater income

Critics of welfare reform argue that

People have their highest saving rates when they are

Internet access is the most important factor explaining reductions in child labor in Vietnam.

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

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