Question 1

In the United States, long-term poverty affects

Accepted Answer

A)  more families than short-term poverty. 
B)  an equal number of families as short-term poverty. 
C)  slightly fewer families than short-term poverty. 
D)  many fewer families than short-term poverty. 
A)  more families than short-term poverty. 
B)  an equal number of families as short-term poverty. 
C)  slightly fewer families than short-term poverty. 
D)  many fewer families than short-term poverty.

Question 2

In the United States, a typical worker's income peaks around age

Accepted Answer

A)  70. 
B)  60. 
C)  50. 
D)  40. 
A)  70. 
B)  60. 
C)  50. 
D)  40.

Question 3

In 2011 the top 20% of income earners accounted for over 80% of all income received by United States' families.

Accepted Answer

A) True 
 B)False

Question 4

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 5

Scenario 20-7
Zooey is a single mother of two young children whose husband died in a tragic car accident. She earns $20,000 per year working as a cashier at a grocery store. The government uses a negative income tax system in which Taxes owed = (1/4 of income) - $15,000.
-Refer to Scenario 20-7. One of Zooey's friends tells her she would have more money for the year if she quit her job and filed her tax return with $0 in income. Is her friend correct? Why or why not?

Accepted Answer

No, she would have $

Question 6

Assume that the government proposes a negative income tax that calculates taxes owed by the formula, Taxes Owed = (a   Income) - b. A family with an income of $40,000 pays $5,000 in taxes, and a family with an income of $12,000 receives an income subsidy of $2,000.
a. What is the value for "a"?
b. What is the value for "b"?
c. What is the tax liability of a family with an income of $50,000?
d. At what level of income will a family neither pay taxes, nor receive an income subsidy?

Accepted Answer

Answer : 
a. 0.25 or

Question 7

Which of the following statements is characteristic of utilitarianism?

Accepted Answer

A)  An extra dollar of income provides higher marginal utility to a poor person than to a rich person. 
B)  Social policies should be created behind a "veil of ignorance." 
C)  Society should strive to maximize the utility of its wealthiest member. 
D)  Equality of opportunity is more important than equality of incomes. 
A)  An extra dollar of income provides higher marginal utility to a poor person than to a rich person. 
B)  Social policies should be created behind a "veil of ignorance." 
C)  Society should strive to maximize the utility of its wealthiest member. 
D)  Equality of opportunity is more important than equality of incomes.

Question 8

When the government enacts policies to make the distribution of income more equitable, it distorts incentives, alters behavior, and makes the allocation of resources less efficient.

Accepted Answer

A) True 
 B)False

Question 9

Economic mobility in the United States is so great that fewer than

Accepted Answer

A)  3 percent of families are poor for 8 or more years. 
B)  5 percent of families are poor for 8 or more years. 
C)  8 percent of families are poor for 8 or more years. 
D)  10 percent of families are poor for 8 or more years. 
A)  3 percent of families are poor for 8 or more years. 
B)  5 percent of families are poor for 8 or more years. 
C)  8 percent of families are poor for 8 or more years. 
D)  10 percent of families are poor for 8 or more years.

Question 10

Temporary Assistance for Needy Families (TANF) and Supplemental Security Income (SSI) are examples of .

Accepted Answer

The answer of Temporary Assistance for Needy Families (TANF) and...

Question 11

Which of the following is not correct?

Accepted Answer

A)  A negative income tax only applies to working people, so it encourages people to get full-time work. 
B)  Supporters advocate the use of the Earned Income Tax Credit as a way to help the working poor. 
C)  A negative income tax subsidizes the incomes of poor people. 
D)  An advantage of a negative income tax is that it is not based on the number of children, so it does not provide incentives for unmarried women to have children. 
A)  A negative income tax only applies to working people, so it encourages people to get full-time work. 
B)  Supporters advocate the use of the Earned Income Tax Credit as a way to help the working poor. 
C)  A negative income tax subsidizes the incomes of poor people. 
D)  An advantage of a negative income tax is that it is not based on the number of children, so it does not provide incentives for unmarried women to have children.

Question 12

When John F. Kennedy said, "A rising tide lifts all boats," to what was he referring?

Accepted Answer

A)  With government intervention, all citizens receive a greater allocation of resources. 
B)  With market forces working independently, everyone receives an equitable share of resources. 
C)  With economic growth, more families are pushed above the poverty line. 
D)  None of the above are correct. 
A)  With government intervention, all citizens receive a greater allocation of resources. 
B)  With market forces working independently, everyone receives an equitable share of resources. 
C)  With economic growth, more families are pushed above the poverty line. 
D)  None of the above are correct.

Question 13

Which two of the Ten Principles of Economics are illustrated in this chapter?

Accepted Answer

A)  A country's standard of living depends on its ability to produce goods & People face tradeoffs. 
B)  Prices rise when the government prints too much money & Governments can sometimes improve market outcomes. 
C)  Governments can sometimes improve market outcomes & People face tradeoffs. 
D)  People face tradeoffs & Prices rise when the government prints too much money . 
A)  A country's standard of living depends on its ability to produce goods & People face tradeoffs. 
B)  Prices rise when the government prints too much money & Governments can sometimes improve market outcomes. 
C)  Governments can sometimes improve market outcomes & People face tradeoffs. 
D)  People face tradeoffs & Prices rise when the government prints too much money .

Question 14

Table 20-14
Income Inequality in the United States
The values in the table reflect the percentages of pre-tax-and transfer income.
   Source: US Census Bureau
-Refer to Table 20-14. If the distribution of income were completely equal, what percentage of income would the bottom fifth of the population earn?

Accepted Answer

The answer of Table 20-14
Income Inequality in the United States
The...

Question 15

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 16

In 2011 the top 5 percent of income earners accounted for over 50% of all income received by United States' families.

Accepted Answer

A) True 
 B)False

Question 17

Minimum wage laws

Accepted Answer

A)  benefit all unskilled workers. 
B)  create unemployment, but if demand is relatively elastic, the unemployment effects will be minor. 
C)  may help the nonpoor, such as teenagers from wealthy families. 
D)  reduce poverty by reducing unemployment. 
A)  benefit all unskilled workers. 
B)  create unemployment, but if demand is relatively elastic, the unemployment effects will be minor. 
C)  may help the nonpoor, such as teenagers from wealthy families. 
D)  reduce poverty by reducing unemployment.

In the United States, long-term poverty affects

In the United States, a typical worker's income peaks around age

In 2011 the top 20% of income earners accounted for over 80% of all income received by United States' families.

Which of the following is not correct?

Which of the following statements is characteristic of utilitarianism?

When the government enacts policies to make the distribution of income more equitable, it distorts incentives, alters behavior, and makes the allocation of resources less efficient.

Economic mobility in the United States is so great that fewer than

Temporary Assistance for Needy Families (TANF) and Supplemental Security Income (SSI) are examples of .

Which of the following is not correct?

When John F. Kennedy said, "A rising tide lifts all boats," to what was he referring?

Which two of the Ten Principles of Economics are illustrated in this chapter?

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

In 2011 the top 5 percent of income earners accounted for over 50% of all income received by United States' families.

Minimum wage laws

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

Exam 20: Income Inequality and Poverty

In the United States, long-term poverty affects

In the United States, a typical worker's income peaks around age

In 2011 the top 20% of income earners accounted for over 80% of all income received by United States' families.

Which of the following is not correct?

Which of the following statements is characteristic of utilitarianism?

When the government enacts policies to make the distribution of income more equitable, it distorts incentives, alters behavior, and makes the allocation of resources less efficient.

Economic mobility in the United States is so great that fewer than

Temporary Assistance for Needy Families (TANF) and Supplemental Security Income (SSI) are examples of .

Which of the following is not correct?

When John F. Kennedy said, "A rising tide lifts all boats," to what was he referring?

Which two of the Ten Principles of Economics are illustrated in this chapter?

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

In 2011 the top 5 percent of income earners accounted for over 50% of all income received by United States' families.

Minimum wage laws

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