Question 1

Anti-poverty programs

Accepted Answer

A)  encourage saving among recipient groups. 
B)  impose a very low marginal tax rate on income. 
C)  are only made available to those with no other source of income. 
D)  may discourage the poor from escaping poverty on their own. 
A)  encourage saving among recipient groups. 
B)  impose a very low marginal tax rate on income. 
C)  are only made available to those with no other source of income. 
D)  may discourage the poor from escaping poverty on their own.

Question 2

Based on data from 2005,the top fifth of all families received approximately what percent of all income in the United States?

Accepted Answer

A)  78 percent 
B)  48 percent 
C)  21 percent 
D)  4 percent 
A)  78 percent 
B)  48 percent 
C)  21 percent 
D)  4 percent

Question 3

Which of the following is not an example of a welfare program?

Accepted Answer

A)  Supplemental Security Income (SSI) 
B)  Temporary Assistance for Needy Families (TANF) 
C)  food stamps 
D)  minimum wage laws 
A)  Supplemental Security Income (SSI) 
B)  Temporary Assistance for Needy Families (TANF) 
C)  food stamps 
D)  minimum wage laws

Question 4

The poverty line is based on the percentage of people who cannot afford an adequate diet.

Accepted Answer

A) True 
 B)False

Question 5

The distribution of income for Inequalia is as follows:
 
What would the poverty line need to be to have a poverty rate of 27.8 percent in Inequalia?

Accepted Answer

A)  $5,000. 
B)  $10,000. 
C)  $15,000. 
D)  $20,000. 
A)  $5,000. 
B)  $10,000. 
C)  $15,000. 
D)  $20,000.

Question 6

"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)  Republicanism. 
A)  Utilitarianism. 
B)  Liberalism. 
C)  Libertarianism. 
D)  Republicanism.

Question 7

Which of the following is not correct?

Accepted Answer

A)  Poverty is long-term problem for relatively few families. 
B)  Measurements of income inequality usually do not include in-kind transfers. 
C)  Measurements of income inequality use lifetime incomes rather than annual incomes. 
D)  Measurements of income inequality would be more meaningful if they reflected permanent rather than current income. 
A)  Poverty is long-term problem for relatively few families. 
B)  Measurements of income inequality usually do not include in-kind transfers. 
C)  Measurements of income inequality use lifetime incomes rather than annual incomes. 
D)  Measurements of income inequality would be more meaningful if they reflected permanent rather than current income.

Question 8

Proponents of welfare reform claim that programs that do not establish a time limit on recipient benefits harm children by

Accepted Answer

A)  forcing mothers to work outside the home. 
B)  encouraging a psychological dependency on government programs. 
C)  encouraging child abuse by absent fathers. 
D)  creating drug addiction. 
A)  forcing mothers to work outside the home. 
B)  encouraging a psychological dependency on government programs. 
C)  encouraging child abuse by absent fathers. 
D)  creating drug addiction.

Question 9

Bill earns more than Donna.A legislator proposes taxing Bill to supplement Donna's income.A libertarian would view this proposal as

Accepted Answer

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

Question 10

A society consists of three individuals: Arthur,Billie,and Chris.In terms of income and utility,Arthur is currently best-off,Billie ranks in the middle,and Chris is worst-off.Which of the following statements is correct?

Accepted Answer

A)  Utilitarianism suggests that government policies should strive to maximize the sum of all three individuals' utility. 
B)  Liberalism suggests that government policies should strive to maximize the sum of Billie's utility and Chris's utility. 
C)  Libertarianism suggests that government policies should strive to maximize Chris's utility. 
D)  Mobilism suggests that the government policies should strive to make Billie better off than Arthur. 
A)  Utilitarianism suggests that government policies should strive to maximize the sum of all three individuals' utility. 
B)  Liberalism suggests that government policies should strive to maximize the sum of Billie's utility and Chris's utility. 
C)  Libertarianism suggests that government policies should strive to maximize Chris's utility. 
D)  Mobilism suggests that the government policies should strive to make Billie better off than Arthur.

Question 11

The income level below which families are said to be poor is known as the

Accepted Answer

A)  income maintenance threshold. 
B)  poverty line. 
C)  bottom quintile of the income distribution. 
D)  minimum wage. 
A)  income maintenance threshold. 
B)  poverty line. 
C)  bottom quintile of the income distribution. 
D)  minimum wage.

Question 12

When poor families in developing countries experience an increase in family income,their children supply fewer hours of labor.

Accepted Answer

A) True 
 B)False

Question 13

The regular pattern of income variation over a person's life is called

Accepted Answer

A)  the earned income cycle. 
B)  the substitution effect. 
C)  the life cycle. 
D)  the pattern of change. 
A)  the earned income cycle. 
B)  the substitution effect. 
C)  the life cycle. 
D)  the pattern of change.

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

In-kind transfers are politically popular because

Accepted Answer

A)  they provide high quality food and shelter. 
B)  they provide cash. 
C)  allow resale of food stamps for cash,if needed. 
D)  the public believes that the aid is not going to support addictions. 
A)  they provide high quality food and shelter. 
B)  they provide cash. 
C)  allow resale of food stamps for cash,if needed. 
D)  the public believes that the aid is not going to support addictions.

Question 16

Many Democrats who campaigned in the 2006 elections supported raising the U.S.minimum wage.Critics of raising the minimum wage argue that minimum-wage laws are

Accepted Answer

A)  too expensive for local governments to fund. 
B)  too expensive for local governments to administer. 
C)  imprecise in their ability to help the working poor. 
D)  easy for businesses to pay. 
A)  too expensive for local governments to fund. 
B)  too expensive for local governments to administer. 
C)  imprecise in their ability to help the working poor. 
D)  easy for businesses to pay.

Question 17

Table 20-1
  
-Refer to Table 20-1.Fifty 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 18

One existing government program that works much like a negative income tax is the Earned Income Tax Credit.

Accepted Answer

A) True 
 B)False

Question 19

In 2003,what percentage of U.S.families had income levels above $103,100?

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 20

Since about 1970 in the U.S. ,

Accepted Answer

A)  decreases in the wages of unskilled workers,relative to skilled workers,have led to increased inequality in family incomes. 
B)  increases in the wages of unskilled workers,relative to skilled workers,have led to increased equality in family incomes. 
C)  inequality in family incomes has increased,despite increases in the wages of unskilled workers relative to skilled workers. 
D)  inequality in family incomes has decreased,despite increases in the wages of skilled workers relative to unskilled workers. 
A)  decreases in the wages of unskilled workers,relative to skilled workers,have led to increased inequality in family incomes. 
B)  increases in the wages of unskilled workers,relative to skilled workers,have led to increased equality in family incomes. 
C)  inequality in family incomes has increased,despite increases in the wages of unskilled workers relative to skilled workers. 
D)  inequality in family incomes has decreased,despite increases in the wages of skilled workers relative to unskilled workers.

Exam 20: Income Inequality and Poverty

Anti-poverty programs

Based on data from 2005,the top fifth of all families received approximately what percent of all income in the United States?

Which of the following is not an example of a welfare program?

The poverty line is based on the percentage of people who cannot afford an adequate diet.

The distribution of income for Inequalia is as follows: What would the poverty line need to be to have a poverty rate of 27.8 percent in Inequalia?

"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?

Which of the following is not correct?

Proponents of welfare reform claim that programs that do not establish a time limit on recipient benefits harm children by

Bill earns more than Donna.A legislator proposes taxing Bill to supplement Donna's income.A libertarian would view this proposal as

A society consists of three individuals: Arthur,Billie,and Chris.In terms of income and utility,Arthur is currently best-off,Billie ranks in the middle,and Chris is worst-off.Which of the following statements is correct?

The income level below which families are said to be poor is known as the

When poor families in developing countries experience an increase in family income,their children supply fewer hours of labor.

The regular pattern of income variation over a person's life is called

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

In-kind transfers are politically popular because

Many Democrats who campaigned in the 2006 elections supported raising the U.S.minimum wage.Critics of raising the minimum wage argue that minimum-wage laws are

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

One existing government program that works much like a negative income tax is the Earned Income Tax Credit.

In 2003,what percentage of U.S.families had income levels above $103,100?

Since about 1970 in the U.S. ,

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

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