Question 1

Comparing the United States household income distribution to other countries is

Accepted Answer

A)  easy, because data is available for all countries in the world. 
B)  easy, because some countries collect data on expenditures instead of incomes. 
C)  problematic, because international agreements require countries to standardize their income accounting procedures. 
D)  problematic, because countries collect data in different ways. 
A)  easy, because data is available for all countries in the world. 
B)  easy, because some countries collect data on expenditures instead of incomes. 
C)  problematic, because international agreements require countries to standardize their income accounting procedures. 
D)  problematic, because countries collect data in different ways.

Question 2

Libertarians believe that

Accepted Answer

A)  it is more important to evaluate the process by which economic outcomes are produced than the outcomes themselves. 
B)  government should attempt to redistribute income from the rich to the poor when the gap between rich and poor is more than 20%. 
C)  equality of income is more important than equality of opportunity. 
D)  it is more important to evaluate economic outcomes first and then the process that produced them. 
A)  it is more important to evaluate the process by which economic outcomes are produced than the outcomes themselves. 
B)  government should attempt to redistribute income from the rich to the poor when the gap between rich and poor is more than 20%. 
C)  equality of income is more important than equality of opportunity. 
D)  it is more important to evaluate economic outcomes first and then the process that produced them.

Question 3

Suppose the average value of in-kind transfers increases by $2,000 from 2013 to 2014. The poverty rate

Accepted Answer

A)  is more likely to understate the true level of poverty. 
B)  is more likely to overstate the true level of poverty. 
C)  will increase by $2,000 divided by the poverty level. 
D)  Both b and c are correct. 
A)  is more likely to understate the true level of poverty. 
B)  is more likely to overstate the true level of poverty. 
C)  will increase by $2,000 divided by the poverty level. 
D)  Both b and c are correct.

Question 4

The United States has less income inequality than

Accepted Answer

A)  Ethiopia. 
B)  United Kingdom. 
C)  Vietnam. 
D)  Mexico. 
A)  Ethiopia. 
B)  United Kingdom. 
C)  Vietnam. 
D)  Mexico.

Question 5

What percent of families are poor for eight or more years?

Accepted Answer

A)  more than 20 percent 
B)  between 15 and 20 percent 
C)  approximately 10 percent 
D)  less than 3 percent 
A)  more than 20 percent 
B)  between 15 and 20 percent 
C)  approximately 10 percent 
D)  less than 3 percent

Question 6

Which of the following is most likely to occur when the government enacts policies to make the distribution of income more equal?

Accepted Answer

A)  a more efficient allocation of resources 
B)  a distortion of incentives 
C)  unchanged behavior 
D)  All of the above are correct. 
A)  a more efficient allocation of resources 
B)  a distortion of incentives 
C)  unchanged behavior 
D)  All of the above are correct.

Question 7

Goods and services given to the poor such as food stamps, housing vouchers, and medical services are called

Accepted Answer

The answer of Goods and services given to the poor...

Question 8

Table 20-6
  
-Refer to Table 20-6. A person who is concerned that income inequality has worsened between 2011 and 2012 would cite which of the following statistics to support her position?

Accepted Answer

A)  The percentage of people earning less than $25,000 decreased from 2011 to 2012. 
B)  The percentage of people earning more than $100,000 increased from 2011 to 2012. 
C)  The percentage of people earning between $50,000 and $100,000 stayed virtually constant from 2011 to 2012. 
D)  Both a and b are correct. 
A)  The percentage of people earning less than $25,000 decreased from 2011 to 2012. 
B)  The percentage of people earning more than $100,000 increased from 2011 to 2012. 
C)  The percentage of people earning between $50,000 and $100,000 stayed virtually constant from 2011 to 2012. 
D)  Both a and b are correct.

Question 9

Which of the following statements is not correct?

Accepted Answer

A)  Two key elements of welfare reform are work requirements and limiting the time that recipients can receive benefits. 
B)  The Earned Income Tax Credit (EIT
C)  is very similar to a negative income tax. 
C)  Minimum wage laws will likely increase unemployment. 
D)  The elderly are more likely to be poor than single mothers. 
A)  Two key elements of welfare reform are work requirements and limiting the time that recipients can receive benefits. 
B)  The Earned Income Tax Credit (EIT
C)  is very similar to a negative income tax. 
C)  Minimum wage laws will likely increase unemployment. 
D)  The elderly are more likely to be poor than single mothers.

Question 10

Libertarians believe that the government should enforce individual rights to ensure that all people have the same opportunities to use their talents to achieve success.

Accepted Answer

A) True 
 B)False

Question 11

Outline the possible work disincentives created by anti-poverty programs. Is there a way to solve this problem without causing other forms of inefficiency to arise? Explain your answer.

Accepted Answer

A high marginal tax rate exists on welfa

Question 12

A binding minimum wage

Accepted Answer

A)  affects employees but not employers. 
B)  lowers the productivity of workers. 
C)  raises the cost of labor to firms. 
D)  All of the above are correct. 
A)  affects employees but not employers. 
B)  lowers the productivity of workers. 
C)  raises the cost of labor to firms. 
D)  All of the above are correct.

Question 13

Which of the following is not correct?

Accepted Answer

A)  Critics argue that minimum-wage laws hurt the very people they are intended to help. 
B)  Minimum-wage laws may increase unemployment among the groups of workers affected by the minimum wage. 
C)  If the demand for unskilled labor is relatively inelastic, the higher wage will produce more unemployment than if the demand for unskilled labor is relatively elastic. 
D)  Minimum-wage laws may benefit teenagers from middle-class families, so the policy is not a precise way to help the poor. 
A)  Critics argue that minimum-wage laws hurt the very people they are intended to help. 
B)  Minimum-wage laws may increase unemployment among the groups of workers affected by the minimum wage. 
C)  If the demand for unskilled labor is relatively inelastic, the higher wage will produce more unemployment than if the demand for unskilled labor is relatively elastic. 
D)  Minimum-wage laws may benefit teenagers from middle-class families, so the policy is not a precise way to help the poor.

Question 14

The poverty line is adjusted each year to reflect changes in the

Accepted Answer

A)  number of people currently on public assistance. 
B)  level of prices. 
C)  nutritional content of an "adequate" diet. 
D)  size of a family. 
A)  number of people currently on public assistance. 
B)  level of prices. 
C)  nutritional content of an "adequate" diet. 
D)  size of a family.

Question 15

The Smith family owns an apple orchard in Illinois. The Jones family owns an apple orchard in Wisconsin. A late frost destroys half of the Smith family's harvest for one year. For the Jones family, their

Accepted Answer

A)  transitory income for the year of the frost likely exceeds their permanent income. 
B)  permanent income likely exceeds their transitory income for the year of the frost. 
C)  permanent income will be more affected by the frost than their transitory income. 
D)  Both a and c are correct. 
A)  transitory income for the year of the frost likely exceeds their permanent income. 
B)  permanent income likely exceeds their transitory income for the year of the frost. 
C)  permanent income will be more affected by the frost than their transitory income. 
D)  Both a and c are correct.

Question 16

The maximin criterion is attributed to which political philosophy?

Accepted Answer

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

Question 17

Which of the following statements is correct?

Accepted Answer

A)  The distribution of annual income accurately reflects the distribution of living standards. 
B)  Permanent 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)  Permanent 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 18

A follower of liberalism would not support a redistribution of income but rather would focus on equalizing opportunities.

Accepted Answer

A) True 
 B)False

Question 19

Explain what is meant by "in-kind transfer" programs. Briefly outline the advantages and disadvantages of an in-kind transfer program.

Accepted Answer

An in-kind transfer program distributes

Question 20

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%. What is the value for this measure of inequality in Imagination?

Accepted Answer

The answer of Table 20-13
Distribution of Income in Imagination
 ...

Exam 20: Income Inequality and Poverty

Comparing the United States household income distribution to other countries is

Libertarians believe that

Suppose the average value of in-kind transfers increases by $2,000 from 2013 to 2014. The poverty rate

The United States has less income inequality than

What percent of families are poor for eight or more years?

Which of the following is most likely to occur when the government enacts policies to make the distribution of income more equal?

Goods and services given to the poor such as food stamps, housing vouchers, and medical services are called

Table 20-6 -Refer to Table 20-6. A person who is concerned that income inequality has worsened between 2011 and 2012 would cite which of the following statistics to support her position?

Which of the following statements is not correct?

Libertarians believe that the government should enforce individual rights to ensure that all people have the same opportunities to use their talents to achieve success.

Outline the possible work disincentives created by anti-poverty programs. Is there a way to solve this problem without causing other forms of inefficiency to arise? Explain your answer.

A binding minimum wage

Which of the following is not correct?

The poverty line is adjusted each year to reflect changes in the

The Smith family owns an apple orchard in Illinois. The Jones family owns an apple orchard in Wisconsin. A late frost destroys half of the Smith family's harvest for one year. For the Jones family, their

The maximin criterion is attributed to which political philosophy?

Which of the following statements is correct?

A follower of liberalism would not support a redistribution of income but rather would focus on equalizing opportunities.

Explain what is meant by "in-kind transfer" programs. Briefly outline the advantages and disadvantages of an in-kind transfer program.

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%. What is the value for this measure of inequality in Imagination?

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

Filters