Question 1

Medicaid and food stamps are

Accepted Answer

A)  available only to the elderly. 
B)  forms of in-kind assistance. 
C)  forms of cash assistance. 
D)  transfer payments. 
A)  available only to the elderly. 
B)  forms of in-kind assistance. 
C)  forms of cash assistance. 
D)  transfer payments.

Question 2

Which of the following statements illustrates diminishing marginal utility?

Accepted Answer

A)  An extra dollar of income to a poor person provides that person with more additional utility than does an extra dollar to a rich person. 
B)  An extra dollar of income to a poor person provides that person with less additional utility than does an extra dollar to a rich person. 
C)  An extra dollar of income to a poor person provides that person with the same additional utility as does an extra dollar to a rich person. 
D)  An extra dollar of income to a poor person provides that person with the same total utility as does an extra dollar to a rich person. 
A)  An extra dollar of income to a poor person provides that person with more additional utility than does an extra dollar to a rich person. 
B)  An extra dollar of income to a poor person provides that person with less additional utility than does an extra dollar to a rich person. 
C)  An extra dollar of income to a poor person provides that person with the same additional utility as does an extra dollar to a rich person. 
D)  An extra dollar of income to a poor person provides that person with the same total utility as does an extra dollar to a rich person.

Question 3

For a typical worker, her income will be lower when she is younger, peak around age 50, and decrease drastically when she retires. This pattern of changes in income for a typical worker is called

Accepted Answer

A)  the life cycle. 
B)  permanent income. 
C)  transitory income. 
D)  in-kind transfers. 
A)  the life cycle. 
B)  permanent income. 
C)  transitory income. 
D)  in-kind transfers.

Question 4

In the Temporary Assistance for Needy Families program, most families

Accepted Answer

A)  must have both parents in the home to qualify. 
B)  are female head-of-household families in which the father is absent. 
C)  have adult children with disabilities living at home. 
D)  are ineligible to receive assistance from other support programs. 
A)  must have both parents in the home to qualify. 
B)  are female head-of-household families in which the father is absent. 
C)  have adult children with disabilities living at home. 
D)  are ineligible to receive assistance from other support programs.

Question 5

Fewer than three percent of families are poor for eight or more years.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements is correct?

Accepted Answer

A)  A minimum wage law will result in less additional unemployment if labor demand is elastic rather than inelastic. 
B)  An in-kind transfer allows a person to use the benefit to purchase whatever they think they need most. 
C)  If a tax policy states that taxes owed equal 1/3 of income less $15,000, a person earning $25,000 per year would owe $6,666.67 in taxes. 
D)  Welfare reform enacted in 1996 limited the amount of time recipients could stay on welfare. 
A)  A minimum wage law will result in less additional unemployment if labor demand is elastic rather than inelastic. 
B)  An in-kind transfer allows a person to use the benefit to purchase whatever they think they need most. 
C)  If a tax policy states that taxes owed equal 1/3 of income less $15,000, a person earning $25,000 per year would owe $6,666.67 in taxes. 
D)  Welfare reform enacted in 1996 limited the amount of time recipients could stay on welfare.

Question 7

Among all countries in the world, the United States has the most income inequality.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is an advantage of an in-kind transfer in comparison to a cash payment?

Accepted Answer

A)  In-kind transfers cost less to administer than cash transfers. 
B)  In-kind transfers restrict the use of the benefit; thus, recipients receive necessities such as food and health care. 
C)  In-kind transfers are more efficient than cash transfers. 
D)  In-kind transfers give the recipient more utility than cash transfers. 
A)  In-kind transfers cost less to administer than cash transfers. 
B)  In-kind transfers restrict the use of the benefit; thus, recipients receive necessities such as food and health care. 
C)  In-kind transfers are more efficient than cash transfers. 
D)  In-kind transfers give the recipient more utility than cash transfers.

Question 9

Table 20-1
The following table shows the distribution of income in Marysville.
  
-Refer to Table 20-1. If the poverty line were $23,021, what would be the poverty rate?

Accepted Answer

A)  less than 25% 
B)  between 25% and 50% 
C)  between 50% and 75% 
D)  There is insufficient information to answer this question. 
A)  less than 25% 
B)  between 25% and 50% 
C)  between 50% and 75% 
D)  There is insufficient information to answer this question.

Question 10

Table 20-3
The Distribution of Income in Edgerton
  
-Refer to Table 20-3. According to the table, what percent of families in Edgerton have income levels below $76,000?

Accepted Answer

A)  20 percent. 
B)  40 percent. 
C)  60 percent. 
D)  80 percent. 
A)  20 percent. 
B)  40 percent. 
C)  60 percent. 
D)  80 percent.

Question 11

Figure 20-3  
-Refer to Figure 20-3. Which of the following is consistent with the data reported in the figure?

Accepted Answer

A)  Policies to reduce elderly (65 years and older) poverty rates since 1959 seem to have been effective. 
B)  The age group suffering the highest poverty rate in recent years has been 18 to 64 year olds. 
C)  Policies to reduce youth (under 18 years) poverty rates since 1959 seem to have been effective. 
D)  All of the above are correct. 
A)  Policies to reduce elderly (65 years and older) poverty rates since 1959 seem to have been effective. 
B)  The age group suffering the highest poverty rate in recent years has been 18 to 64 year olds. 
C)  Policies to reduce youth (under 18 years) poverty rates since 1959 seem to have been effective. 
D)  All of the above are correct.

Question 12

Since 1970 the United States' income distribution has become more equal.

Accepted Answer

A) True 
 B)False

Question 13

The regular pattern of income variation over a person's life is called the .

Accepted Answer

The answer of The regular pattern of income variation over...

Question 14

The poverty line is

Accepted Answer

A)  established by the federal government. 
B)  approximately equivalent to three times the cost of providing an adequate diet. 
C)  an absolute level of income below which a family is deemed to be in poverty. 
D)  All of the above are correct. 
A)  established by the federal government. 
B)  approximately equivalent to three times the cost of providing an adequate diet. 
C)  an absolute level of income below which a family is deemed to be in poverty. 
D)  All of the above are correct.

Question 15

Critics argue that a disadvantage of minimum-wage laws is that they do not effectively target the working poor because many minimum-wage workers are the teenage children of middle-income families.

Accepted Answer

A) True 
 B)False

Question 16

Scenario 20-6
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 20-6. How much does Zooey owe or receive from the government?

Accepted Answer

A)  She receives $10,000. 
B)  She owes $10,000. 
C)  She receives $15,000. 
D)  She owes $5,000 
A)  She receives $10,000. 
B)  She owes $10,000. 
C)  She receives $15,000. 
D)  She owes $5,000

Question 17

Of the four countries below, which has the highest degree of income inequality?

Accepted Answer

A)  Germany 
B)  Turkey 
C)  South Africa 
D)  Mexico 
A)  Germany 
B)  Turkey 
C)  South Africa 
D)  Mexico

Question 18

The poverty line in the country of Inequalia is $7,800. The distribution of income for Inequalia is as follows: Number of Families Income
    200 less than $5,000
300 between $5,000 and $10,000
500 between $10,000 and $15,000
700 between $15,000 and $20,000
300 over $20,000
  The poverty rate in Inequalia is

Accepted Answer

A)  7.8 percent. 
B)  between 10 percent and 25 percent. 
C)  between 25 percent and 50 percent. 
D)  39 percent. 
A)  7.8 percent. 
B)  between 10 percent and 25 percent. 
C)  between 25 percent and 50 percent. 
D)  39 percent.

Question 19

Liberals believe

Accepted Answer

A)  that the government should choose just policies as evaluated by an impartial observer behind a "veil of ignorance." 
B)  in the assumption of diminishing marginal utility. 
C)  that everyone in society should have equal utility. 
D)  that the government should not redistribute income. 
A)  that the government should choose just policies as evaluated by an impartial observer behind a "veil of ignorance." 
B)  in the assumption of diminishing marginal utility. 
C)  that everyone in society should have equal utility. 
D)  that the government should not redistribute income.

Question 20

Which of the following formulas is most representative of a negative income tax proposal?

Accepted Answer

A)  Taxes Owed = (1/4 of Income)   $2 
B)  Taxes Owed = (1/2 of Income)   3/4 
C)  Taxes Owed = (1/2 of Income) + $10,000 
D)  Taxes Owed = (1/3 of Income) - $10,000 
E)  $2 
A)  Taxes Owed = (1/4 of Income)   $2 
B)  Taxes Owed = (1/2 of Income)   3/4 
C)  Taxes Owed = (1/2 of Income) + $10,000 
D)  Taxes Owed = (1/3 of Income) - $10,000 
E)  $2

Medicaid and food stamps are

Which of the following statements illustrates diminishing marginal utility?

For a typical worker, her income will be lower when she is younger, peak around age 50, and decrease drastically when she retires. This pattern of changes in income for a typical worker is called

In the Temporary Assistance for Needy Families program, most families

Fewer than three percent of families are poor for eight or more years.

Which of the following statements is correct?

Among all countries in the world, the United States has the most income inequality.

Which of the following is an advantage of an in-kind transfer in comparison to a cash payment?

Table 20-1 The following table shows the distribution of income in Marysville. -Refer to Table 20-1. If the poverty line were $23,021, what would be the poverty rate?

Table 20-3 The Distribution of Income in Edgerton -Refer to Table 20-3. According to the table, what percent of families in Edgerton have income levels below $76,000?

Figure 20-3 -Refer to Figure 20-3. Which of the following is consistent with the data reported in the figure?

Since 1970 the United States' income distribution has become more equal.

The regular pattern of income variation over a person's life is called the .

The poverty line is

Critics argue that a disadvantage of minimum-wage laws is that they do not effectively target the working poor because many minimum-wage workers are the teenage children of middle-income families.

Of the four countries below, which has the highest degree of income inequality?

Liberals believe

Which of the following formulas is most representative of a negative income tax proposal?

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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Exam 20: Income Inequality and Poverty

Medicaid and food stamps are

Which of the following statements illustrates diminishing marginal utility?

For a typical worker, her income will be lower when she is younger, peak around age 50, and decrease drastically when she retires. This pattern of changes in income for a typical worker is called

In the Temporary Assistance for Needy Families program, most families

Fewer than three percent of families are poor for eight or more years.

Which of the following statements is correct?

Among all countries in the world, the United States has the most income inequality.

Which of the following is an advantage of an in-kind transfer in comparison to a cash payment?

Table 20-1 The following table shows the distribution of income in Marysville. -Refer to Table 20-1. If the poverty line were $23,021, what would be the poverty rate?

Table 20-3 The Distribution of Income in Edgerton -Refer to Table 20-3. According to the table, what percent of families in Edgerton have income levels below $76,000?

Figure 20-3 -Refer to Figure 20-3. Which of the following is consistent with the data reported in the figure?

Since 1970 the United States' income distribution has become more equal.

The regular pattern of income variation over a person's life is called the .

The poverty line is

Critics argue that a disadvantage of minimum-wage laws is that they do not effectively target the working poor because many minimum-wage workers are the teenage children of middle-income families.

Of the four countries below, which has the highest degree of income inequality?

Liberals believe

Which of the following formulas is most representative of a negative income tax proposal?

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