Question 1

A goal of libertarians is to provide citizens with equal opportunities rather than to ensure equal outcomes.

Accepted Answer

A) True 
 B)False

Question 2

An example of a transitory change in income is the

Accepted Answer

A)  annual cost of living adjustment to your salary. 
B)  increase in income that results from a job promotion linked to your education. 
C)  increase in income of California orange growers that results from an orange-killing frost in Florida. 
D)  All of the above are correct. 
A)  annual cost of living adjustment to your salary. 
B)  increase in income that results from a job promotion linked to your education. 
C)  increase in income of California orange growers that results from an orange-killing frost in Florida. 
D)  All of the above are correct.

Question 3

Which of the following statements about the minimum wage is correct?

Accepted Answer

A)  An increase in the minimum wage enhances the well-being of all unskilled workers. 
B)  An increase in the minimum wage has no effect on the well-being of middle-class families. 
C)  Advocates of the minimum wage argue that the demand for labor is relatively inelastic. 
D)  Critics of the minimum wage argue that it is an undesirable way of helping the poor because it is costly to the government. 
A)  An increase in the minimum wage enhances the well-being of all unskilled workers. 
B)  An increase in the minimum wage has no effect on the well-being of middle-class families. 
C)  Advocates of the minimum wage argue that the demand for labor is relatively inelastic. 
D)  Critics of the minimum wage argue that it is an undesirable way of helping the poor because it is costly to the government.

Question 4

The study by economists Cox and Alm found

Accepted Answer

A)  the gap between rich and poor shrinks greatly if using after-tax income compared with pre-tax income. 
B)  the gap between rich and poor shrinks slightly if using after-tax income compared with pre-tax income. 
C)  the gap between rich and poor widens slightly if using after-tax income compared with pre-tax income. 
D)  the gap between rich and poor widens greatly if using after-tax income compared with pre-tax income. 
A)  the gap between rich and poor shrinks greatly if using after-tax income compared with pre-tax income. 
B)  the gap between rich and poor shrinks slightly if using after-tax income compared with pre-tax income. 
C)  the gap between rich and poor widens slightly if using after-tax income compared with pre-tax income. 
D)  the gap between rich and poor widens greatly if using after-tax income compared with pre-tax income.

Question 5

Figure 20-4  
-Refer to Figure 20-4. The ratio of female-to-male earnings has increased steadily from about 1980 to 2008 because the earnings of men

Accepted Answer

A)  increased steadily but by approximately half of the increase in the earnings of women. 
B)  decreased while the earnings of women increased. 
C)  stayed relatively constant while the earnings of women increased. 
D)  decreased by substantially more than the decrease in the earnings of women. 
A)  increased steadily but by approximately half of the increase in the earnings of women. 
B)  decreased while the earnings of women increased. 
C)  stayed relatively constant while the earnings of women increased. 
D)  decreased by substantially more than the decrease in the earnings of women.

Question 6

The rule for redistribution proposed by John Rawls in his book A Theory of Justice is called the

Accepted Answer

A)  "optimal ignorance" rule. 
B)  libertarian justice rule. 
C)  maximin criterion. 
D)  egalitarian criterion. 
A)  "optimal ignorance" rule. 
B)  libertarian justice rule. 
C)  maximin criterion. 
D)  egalitarian criterion.

Question 7

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

Accepted Answer

A)  a negative income tax 
B)  an Earned Income Tax Credit (EIT
C)  
C)  an in-kind transfer program 
D)  None of the programs would be favored by Nozick. 
A)  a negative income tax 
B)  an Earned Income Tax Credit (EIT
C)  
C)  an in-kind transfer program 
D)  None of the programs would be favored by Nozick.

Question 8

The distribution of income for Dismal is as follows: Number of Families Income
    1,000 less than $10,000
2,000 between $10,000 and $20,000
2,000 between $20,000 and $30,000
800 between $30,000 and $40,000
200 over $40,000
  If the poverty rate in Dismal is 50 percent, what is the poverty line in Dismal?

Accepted Answer

A)  $10,000. 
B)  $20,000. 
C)  $30,000. 
D)  $40,000. 
A)  $10,000. 
B)  $20,000. 
C)  $30,000. 
D)  $40,000.

Question 9

The goal of utilitarians is to

Accepted Answer

A)  punish crimes and enforce voluntary agreements but not to redistribute income. 
B)  redistribute income until each person has equal earnings. 
C)  redistribute income until the marginal utility of the wealthiest person equals the total utility of the poorest person. 
D)  redistribute income based on the assumption of diminishing marginal utility. 
A)  punish crimes and enforce voluntary agreements but not to redistribute income. 
B)  redistribute income until each person has equal earnings. 
C)  redistribute income until the marginal utility of the wealthiest person equals the total utility of the poorest person. 
D)  redistribute income based on the assumption of diminishing marginal utility.

Question 10

Explain the relationship between labor earnings and the distribution of income.

Accepted Answer

A person's earnings depend on the supply

Question 11

Suppose that a family saves and borrows to buffer itself against changes in income. These actions relate to which problem in measuring inequality?

Accepted Answer

A)  in-kind transfers 
B)  negative income tax 
C)  transitory versus permanent income 
D)  economic mobility 
A)  in-kind transfers 
B)  negative income tax 
C)  transitory versus permanent income 
D)  economic mobility

Question 12

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 13

Figure 20-1 Number of Poor  
-Refer to Figure 20-1. Between 1959 and 2011 the poverty rate has

Accepted Answer

A)  increased overall. 
B)  decreased overall. 
C)  stayed the same overall. 
D)  moved in the opposite direction of the number of people in poverty. 
A)  increased overall. 
B)  decreased overall. 
C)  stayed the same overall. 
D)  moved in the opposite direction of the number of people in poverty.

Question 14

The poverty rate is

Accepted Answer

A)  a measure of income inequality across families. 
B)  the percentage of the population whose family income falls below a specified level. 
C)  an absolute level of income set by the federal government for each family size. 
D)  measured by the number of in-kind transfers that a family receives. 
A)  a measure of income inequality across families. 
B)  the percentage of the population whose family income falls below a specified level. 
C)  an absolute level of income set by the federal government for each family size. 
D)  measured by the number of in-kind transfers that a family receives.

Question 15

The philosopher John Rawls argued that

Accepted Answer

A)  people would choose a more equal distribution of income if they had to determine an economic distribution system before knowing their place in it. 
B)  people would choose income inequality to allow the maximum use of their individual talents. 
C)  government has a role to ensure income equality to prevent social unrest. 
D)  people would choose equal opportunity because it is morally right. 
A)  people would choose a more equal distribution of income if they had to determine an economic distribution system before knowing their place in it. 
B)  people would choose income inequality to allow the maximum use of their individual talents. 
C)  government has a role to ensure income equality to prevent social unrest. 
D)  people would choose equal opportunity because it is morally right.

Question 16

Table 20-5
Distribution of Income in Umakastan
  
-Refer to Table 20-5. If the poverty rate in Umakastan is 10%, what is the poverty line?

Accepted Answer

A)  $18,750 
B)  $20,000 
C)  $34,690 
D)  $38,000 
A)  $18,750 
B)  $20,000 
C)  $34,690 
D)  $38,000

Question 17

Economists Cox and Alm compared the gap between rich and poor and found that the richest 20% was about 2 times better off than the poorest 20% when they compared what data?

Accepted Answer

consumptio

Question 18

The goal of libertarianism is to

Accepted Answer

A)  redistribute income based on the assumption of diminishing marginal utility. 
B)  redistribute income in order to maximize the well-being of the worst-off person in society. 
C)  punish crimes and enforce voluntary agreements but not to redistribute income. 
D)  measure happiness and satisfaction. 
A)  redistribute income based on the assumption of diminishing marginal utility. 
B)  redistribute income in order to maximize the well-being of the worst-off person in society. 
C)  punish crimes and enforce voluntary agreements but not to redistribute income. 
D)  measure happiness and satisfaction.

Question 19

Of the following groups, which group is most likely to live in poverty - children, elderly, married-couple families, female household with no spouse present?

Accepted Answer

female hou

Question 20

Of the following groups, which group is least likely to live in poverty - whites, blacks, Hispanics, Asians?

Accepted Answer

The answer of Of the following groups, which group is...

Exam 20: Income Inequality and Poverty

A goal of libertarians is to provide citizens with equal opportunities rather than to ensure equal outcomes.

An example of a transitory change in income is the

Which of the following statements about the minimum wage is correct?

The study by economists Cox and Alm found

Figure 20-4 -Refer to Figure 20-4. The ratio of female-to-male earnings has increased steadily from about 1980 to 2008 because the earnings of men

The rule for redistribution proposed by John Rawls in his book A Theory of Justice is called the

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

The goal of utilitarians is to

Explain the relationship between labor earnings and the distribution of income.

Suppose that a family saves and borrows to buffer itself against changes in income. These actions relate to which problem in measuring inequality?

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

Figure 20-1 Number of Poor -Refer to Figure 20-1. Between 1959 and 2011 the poverty rate has

The poverty rate is

The philosopher John Rawls argued that

Table 20-5 Distribution of Income in Umakastan -Refer to Table 20-5. If the poverty rate in Umakastan is 10%, what is the poverty line?

Economists Cox and Alm compared the gap between rich and poor and found that the richest 20% was about 2 times better off than the poorest 20% when they compared what data?

The goal of libertarianism is to

Of the following groups, which group is most likely to live in poverty - children, elderly, married-couple families, female household with no spouse present?

Of the following groups, which group is least likely to live in poverty - whites, blacks, Hispanics, Asians?

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

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