Question 1

Table 20-13
Distribution of Income in Imagination
  
-Refer to Table 20-13. If the poverty rate in Imagination is 10%, what is the poverty line?

Accepted Answer

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

Question 2

Figure 20-3  
-Refer to Figure 20-3. In 1968, the percent of elderly aged 65 and over in poverty is

Accepted Answer

A)  higher than both the percentage of adults aged 18 to 64 and the percentage of children under age 18 in poverty. 
B)  higher than the percentage of adults aged 18 to 64 but is lower than the percentage of children under age 18 in poverty. 
C)  lower than both the percentage of adults aged 18 to 64 and the percentage of children under age 18 in poverty. 
D)  is lower than the percentage of adults aged 18 to 64 but is higher than the percentage of children under age 18 in poverty. 
A)  higher than both the percentage of adults aged 18 to 64 and the percentage of children under age 18 in poverty. 
B)  higher than the percentage of adults aged 18 to 64 but is lower than the percentage of children under age 18 in poverty. 
C)  lower than both the percentage of adults aged 18 to 64 and the percentage of children under age 18 in poverty. 
D)  is lower than the percentage of adults aged 18 to 64 but is higher than the percentage of children under age 18 in poverty.

Question 3

The 2011 U.S. distribution of income shows that the top 20 percent of families have approximately what share of income?

Accepted Answer

A)  20 percent 
B)  35 percent 
C)  50 percent 
D)  80 percent 
A)  20 percent 
B)  35 percent 
C)  50 percent 
D)  80 percent

Question 4

When the government taxes income as part of a redistribution program,

Accepted Answer

A)  the poor pay higher taxes. 
B)  the rich always benefit more than the poor. 
C)  the poor are encouraged to work. 
D)  incentives to earn income are diminished. 
A)  the poor pay higher taxes. 
B)  the rich always benefit more than the poor. 
C)  the poor are encouraged to work. 
D)  incentives to earn income are diminished.

Question 5

Which of the following statements is correct?

Accepted Answer

A)  The United States has a more equal distribution of income than other developed countries such as Japan and Germany. 
B)  The statement "a rising tide lifts all boats" illustrates how economic growth reduces the number of people with income levels below the poverty line. 
C)  The economic life cycle explains why people base spending decisions on transitory income. 
D)  The United States has more income inequality than developing countries, including Mexico and Brazil. 
A)  The United States has a more equal distribution of income than other developed countries such as Japan and Germany. 
B)  The statement "a rising tide lifts all boats" illustrates how economic growth reduces the number of people with income levels below the poverty line. 
C)  The economic life cycle explains why people base spending decisions on transitory income. 
D)  The United States has more income inequality than developing countries, including Mexico and Brazil.

Question 6

Given the table shown, which country has a more equal income distribution? Explain your answer.

Accepted Answer

Country A has a more equal income distri

Question 7

Suppose the government used the following formula to compute a family's tax liability: Taxes owed = 28% of income - $8,000. How much would a family that earned $150,000 owe?

Accepted Answer

A)  $34,000 
B)  $42,000 
C)  $50,000 
D)  $68,000 
A)  $34,000 
B)  $42,000 
C)  $50,000 
D)  $68,000

Question 8

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. Zooey's friend Alfredo owes $0 in taxes. How much does he earn?

Accepted Answer

The answer of Scenario 20-7
Zooey is a single mother of...

Question 9

Susan won $2,000 at the blackjack tables on her birthday. Her winnings are an example of

Accepted Answer

A)  permanent income. 
B)  life-cycle income. 
C)  transitory income. 
D)  an in-kind transfer. 
A)  permanent income. 
B)  life-cycle income. 
C)  transitory income. 
D)  an in-kind transfer.

Question 10

Despite continued growth in average income since the early 1970s, the poverty rate has not declined below the level reached in 1973.

Accepted Answer

A) True 
 B)False

Question 11

A negative income tax system would

Accepted Answer

A)  make taxes more regressive. 
B)  sever the link between tax policy and income distribution. 
C)  collect from high-income households and give transfers to low-income households. 
D)  eliminate progressive tax rates. 
A)  make taxes more regressive. 
B)  sever the link between tax policy and income distribution. 
C)  collect from high-income households and give transfers to low-income households. 
D)  eliminate progressive tax rates.

Question 12

Briefly describe the three prominent schools of thought in political philosophy. Identify one of the most well-known philosophers in each school.

Accepted Answer

According to utilitarianism, the governm

Question 13

Which of the following is not an example of a welfare program?

Accepted Answer

A)  Supplemental Security Income (SSI) 
B)  Temporary Assistance for Needy Families (TANF) 
C)  food stamps 
D)  minimum wage laws 
A)  Supplemental Security Income (SSI) 
B)  Temporary Assistance for Needy Families (TANF) 
C)  food stamps 
D)  minimum wage laws

Question 14

"The government should choose policies to maximize the total utility of society." This statement is most closely associated with which political philosophy?

Accepted Answer

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

Question 15

Miguel is a 20 year old college student who works part-time and earns an annual income of $12,000. To smooth out his life cycle changes in income, Miguel can

Accepted Answer

A)  save his earnings to use when he is middle-aged. 
B)  lend money to a friend to purchase a new car. 
C)  borrow money to pay for college, which he will later repay when his income rises. 
D)  attempt to pay for college from his current earnings. 
A)  save his earnings to use when he is middle-aged. 
B)  lend money to a friend to purchase a new car. 
C)  borrow money to pay for college, which he will later repay when his income rises. 
D)  attempt to pay for college from his current earnings.

Question 16

The United States has a more equal income distribution than many developing economies such as Mexico, South Africa, and Brazil.

Accepted Answer

A) True 
 B)False

Question 17

The study by economists Cox and Alm found that the 2006 pre-tax income of the richest fifth of U.S. households is

Accepted Answer

A)  5 times the pre-tax income of the poorest fifth. 
B)  10 times the pre-tax income of the poorest fifth. 
C)  15 times the pre-tax income of the poorest fifth. 
D)  20 times the pre-tax income of the poorest fifth. 
A)  5 times the pre-tax income of the poorest fifth. 
B)  10 times the pre-tax income of the poorest fifth. 
C)  15 times the pre-tax income of the poorest fifth. 
D)  20 times the pre-tax income of the poorest fifth.

Question 18

Table 20-4
   Source: U.S. Bureau of Census
-Refer to Table 20-4. In 2011, the bottom 60% of families have

Accepted Answer

A)  about 13% of total income in the U.S. 
B)  about 28% of total income in the U.S. 
C)  about 51% of total income in the U.S. 
D)  about 74% of total income in the U.S. 
A)  about 13% of total income in the U.S. 
B)  about 28% of total income in the U.S. 
C)  about 51% of total income in the U.S. 
D)  about 74% of total income in the U.S.

Question 19

For which of the following programs can a person qualify solely by having a low income?

Accepted Answer

A)  both Temporary Assistance for Needy Families (TANF) and Supplemental Security Income (SSI) 
B)  Temporary Assistance for Needy Families (TANF) but not Supplemental Security Income (SSI) 
C)  Supplemental Security Income (SSI) but not Temporary Assistance for Needy Families (TANF) 
D)  neither Temporary Assistance for Needy Families (TANF) nor Supplemental Security Income (SSI) 
A)  both Temporary Assistance for Needy Families (TANF) and Supplemental Security Income (SSI) 
B)  Temporary Assistance for Needy Families (TANF) but not Supplemental Security Income (SSI) 
C)  Supplemental Security Income (SSI) but not Temporary Assistance for Needy Families (TANF) 
D)  neither Temporary Assistance for Needy Families (TANF) nor Supplemental Security Income (SSI)

Question 20

Table 20-1
The following table shows the distribution of income in Marysville.
  
-Refer to Table 20-1. Seventy-five percent of all families have incomes above what level?

Accepted Answer

A)  $30,000 
B)  $60,000 
C)  $90,000 
D)  There is insufficient information to answer this question. 
A)  $30,000 
B)  $60,000 
C)  $90,000 
D)  There is insufficient information to answer this question.

Exam 20: Income Inequality and Poverty

Table 20-13 Distribution of Income in Imagination -Refer to Table 20-13. If the poverty rate in Imagination is 10%, what is the poverty line?

Figure 20-3 -Refer to Figure 20-3. In 1968, the percent of elderly aged 65 and over in poverty is

The 2011 U.S. distribution of income shows that the top 20 percent of families have approximately what share of income?

When the government taxes income as part of a redistribution program,

Which of the following statements is correct?

Given the table shown, which country has a more equal income distribution? Explain your answer.

Suppose the government used the following formula to compute a family's tax liability: Taxes owed = 28% of income - $8,000. How much would a family that earned $150,000 owe?

Susan won $2,000 at the blackjack tables on her birthday. Her winnings are an example of

Despite continued growth in average income since the early 1970s, the poverty rate has not declined below the level reached in 1973.

A negative income tax system would

Briefly describe the three prominent schools of thought in political philosophy. Identify one of the most well-known philosophers in each school.

Which of the following is not an example of a welfare program?

"The government should choose policies to maximize the total utility of society." This statement is most closely associated with which political philosophy?

Miguel is a 20 year old college student who works part-time and earns an annual income of $12,000. To smooth out his life cycle changes in income, Miguel can

The United States has a more equal income distribution than many developing economies such as Mexico, South Africa, and Brazil.

The study by economists Cox and Alm found that the 2006 pre-tax income of the richest fifth of U.S. households is

Table 20-4 Source: U.S. Bureau of Census -Refer to Table 20-4. In 2011, the bottom 60% of families have

For which of the following programs can a person qualify solely by having a low income?

Table 20-1 The following table shows the distribution of income in Marysville. -Refer to Table 20-1. Seventy-five percent of all families have incomes above what level?

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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