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 of eight with two children?

The concept of utility is fundamental to utilitarianism and describes the

Economists Cox and Alm compared the gap between rich and poor and found that the richest 20% was about 15 times better off than the poorest 20% when they compared what data?

The study by economists Cox and Alm found

The statement that "measures of the distribution of income are based on money income" relates to which problem in measuring inequality?

Which of the following is not correct?

Most economists believe that a family bases its spending decisions on its transitory income.

The US government sets the poverty line equal to approximately

Figure 20-3 -Refer to Figure 20-3. Which of the following best describes the poverty rates by age from 1965 to 2011?

Figure 20-2 -Refer to Figure 20-2. Which of the following is consistent with the data reported in the figure?

The United States has greater income

One way of expressing the tradeoff between income equality and efficiency is to say the more equally the pie is divided, the .

If the imposition of a binding minimum wage results in much higher unemployment among workers seeking minimum wage jobs,

The 2011 U.S. distribution of income shows that the top 20 percent of all families have

Scenario 20-3 Suppose that a society is made up of five families whose incomes are as follows: $120,000; $90,000; $30,000; $30,000; and $18,000. The federal government is considering two potential income tax plans: Plan A is a negative income tax plan where the taxes owed equal 1/3 of income minus $20,000. Plan B is a two-tiered plan where families earning less than $35,000 pay no income tax and families earning more than $35,000 pay 10% of their income in taxes. The income tax revenue collected from those families earning over $35,000 is then redistributed equally to those families earning less than $35,000. -Refer to Scenario 20-3. Assuming that utility is directly proportional to the cash value of after-tax income, which government policy would an advocate of utilitarianism prefer?

Which of the following programs would be opposed by philosopher John Rawls?

Utilitarians believe that the proper goal of the government is to maximize the sum of the utilities of everyone in society.

Scenario 20-3 Suppose that a society is made up of five families whose incomes are as follows: $120,000; $90,000; $30,000; $30,000; and $18,000. The federal government is considering two potential income tax plans: Plan A is a negative income tax plan where the taxes owed equal 1/3 of income minus $20,000. Plan B is a two-tiered plan where families earning less than $35,000 pay no income tax and families earning more than $35,000 pay 10% of their income in taxes. The income tax revenue collected from those families earning over $35,000 is then redistributed equally to those families earning less than $35,000. -Refer to Scenario 20-3. Assuming that utility is directly proportional to the cash value of after-tax income, which government policy would an advocate of liberalism prefer?

Measuring poverty using an absolute income scale like the poverty line can be misleading because

Figure 20-5 -Refer to Figure 20-5. If the government imposes a minimum wage above Wo, it is likely to