Exam 20: Income Inequality and Poverty

Table 20-11 Poverty Thresholds in 2011, by Size of Family and Number of Related Children Under 18 Years [Dollars] -Refer to Table 20-11. What is the poverty line for a family with one 35-year-old adult and one child?

Table 20-13 Distribution of Income in Imagination -Refer to Table 20-13. The Human Development Report computes a measure of inequality by dividing the income of the richest 10% of the population by the income of the poorest 10%. If the value for this measure of inequality in the US is 15.9 and the value for India is 8.6, how does Imagination compare to these two nations?

When considering a person's standard of living, data on the income distribution and the poverty rate may provide an incomplete picture because the poor may

An example of an in-kind transfer to the poor is

Many economists believe that a family bases its spending decisions on its permanent, or average, income rather than on transitory income.

Critics of the minimum wage argue that

Libertarians believe that

"Only individual members of society earn income, not society itself." This statement is most closely associated with the political philosophy of a

Which of the following statements is not correct?

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.

The table below reflects the levels of total utility received from income for each of four members of a society. Assume that the society has the following income distribution: Peter $3 Paul $7 a. 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. Assume that the government has $19 to allocate among the four members of society. b. (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.

Which of the following is correct?

Supplemental Security Income (SSI) is a type of

Which of the Ten Principles of Economics do governments run into when they redistribute income to achieve greater equality?

Which of the following is correct?

Which of the three political philosophies discussed in the textbook, if any, view the total income of society as a shared resource that a social planner can freely redistribute to achieve some social goal?

Table 20-12 Income Inequality in 2010 in the United States by Race The values in the table reflect the percentages of pre-tax-and-transfer income. -Refer to Table 20-12. According to the information in the table, which race had the most income inequality in 2010?

In a typical 10-year period, about one in four families falls below the poverty line in at least one year. What percentage of families are poor for eight or more years?

Scenario 20-4 Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability: Taxes owed = (1/5 of income) - $15,000 -Refer to Scenario 20-4. This negative income tax would guarantee what minimum level of income to every family?

The poverty rate is a measure of the percentage of people whose incomes fall below