Question 1

What is meant by a perfectly equal distribution of income? Use a graph to depict such a situation.

Accepted Answer

@#IMG-DLM& If income were equally distributed acro

Question 2

Of the four countries below, the country that has the most income equality is

Accepted Answer

A)  Ethiopia. 
B)  France. 
C)  Russia. 
D)  Thailand. 
A)  Ethiopia. 
B)  France. 
C)  Russia. 
D)  Thailand.

Question 3

Which of the following does not explain why data on income distribution and the poverty rate give an incomplete picture of inequality?

Accepted Answer

A)  in-kind transfers 
B)  economic life cycle 
C)  transitory income 
D)  All of the above contribute to an incomplete picture of inequality. 
A)  in-kind transfers 
B)  economic life cycle 
C)  transitory income 
D)  All of the above contribute to an incomplete picture of inequality.

Question 4

In-kind transfers are politically popular because

Accepted Answer

A)  they provide high quality food and shelter. 
B)  they provide cash. 
C)  allow resale of food stamps for cash, if needed. 
D)  the public believes that the aid is not going to support alcohol and drug addiction. 
A)  they provide high quality food and shelter. 
B)  they provide cash. 
C)  allow resale of food stamps for cash, if needed. 
D)  the public believes that the aid is not going to support alcohol and drug addiction.

Question 5

The federal government sets the poverty line at roughly

Accepted Answer

A)  five times the cost of providing an adequate diet. 
B)  four times the cost of providing an adequate diet. 
C)  three times the cost of providing an adequate diet. 
D)  two times the cost of providing an adequate diet. 
A)  five times the cost of providing an adequate diet. 
B)  four times the cost of providing an adequate diet. 
C)  three times the cost of providing an adequate diet. 
D)  two times the cost of providing an adequate diet.

Question 6

Data for the United States suggests that about how many millionaires inherited their fortunes?

Accepted Answer

A)  one in seven 
B)  one in five 
C)  one in three 
D)  one in two 
A)  one in seven 
B)  one in five 
C)  one in three 
D)  one in two

Question 7

Which of the following statements is correct?

Accepted Answer

A)  Followers of the liberalism political philosophy believe that society should maximize the total of individual utilities. 
B)  The poverty line is adjusted for regional differences in the costs of raising children. 
C)  One advantage to the Earned Income Tax Credit (EIT
C)  is that it benefits the working poor. 
D)  Libertarians pursue policies to redistribute income from the rich to the poor. 
A)  Followers of the liberalism political philosophy believe that society should maximize the total of individual utilities. 
B)  The poverty line is adjusted for regional differences in the costs of raising children. 
C)  One advantage to the Earned Income Tax Credit (EIT
C)  is that it benefits the working poor. 
D)  Libertarians pursue policies to redistribute income from the rich to the poor.

Question 8

Figure 20-1 Number of Poor  
-Refer to Figure 20-1. Between 1965 and 2011, during recessions (the shaded bars) the number of individuals in poverty has

Accepted Answer

A)  increased. 
B)  decreased. 
C)  not changed. 
D)  decreased and then increased. 
A)  increased. 
B)  decreased. 
C)  not changed. 
D)  decreased and then increased.

Question 9

Liberalism suggests that public policies should aim to

Accepted Answer

A)  maximize the sum of utility of everyone in society. 
B)  maximize the well-being of the average person in society. 
C)  maximize the well-being of the worst-off person in society. 
D)  minimize the difference between the utility of the best-off person in the society and the utility of the worst-off person in society. 
A)  maximize the sum of utility of everyone in society. 
B)  maximize the well-being of the average person in society. 
C)  maximize the well-being of the worst-off person in society. 
D)  minimize the difference between the utility of the best-off person in the society and the utility of the worst-off person in society.

Question 10

Scenario 20-1
The government is proposing switching from a progressive tax system in which families pay 15% of the first $50,000 earned, 25% of the next $50,000 earned, and 35% of any income over $100,000 to a tax system in which every family pays 20% of their income less $20,000.
-Refer to Scenario 20-1. What would the libertarians think of the proposed policy change?

Accepted Answer

A)  They would favor the current progressive policy over the proposed policy because it accounts for diminishing marginal utility. 
B)  They would favor the proposed tax policy over the current progressive policy because it would result in a negative tax for the poorest families. 
C)  They would favor the current progressive tax policy over the proposed policy because it rewards those who work the hardest. 
D)  They would oppose both tax policies because both redistribute income. 
A)  They would favor the current progressive policy over the proposed policy because it accounts for diminishing marginal utility. 
B)  They would favor the proposed tax policy over the current progressive policy because it would result in a negative tax for the poorest families. 
C)  They would favor the current progressive tax policy over the proposed policy because it rewards those who work the hardest. 
D)  They would oppose both tax policies because both redistribute income.

Question 11

Of the following countries, which has the most equal distribution of income? United States, Brazil, Mexico, China, Japan, Germany, United Kingdom, Russia

Accepted Answer

The answer of Of the following countries, which has the...

Question 12

The typical economic life cycle illustrates how people tend to

Accepted Answer

A)  borrow more when they are younger and save more when they are middle-aged. 
B)  earn their peak incomes immediately prior to the typical retirement age of 65. 
C)  adjust their consumption based on changes in their transitory income. 
D)  All of the above are correct. 
A)  borrow more when they are younger and save more when they are middle-aged. 
B)  earn their peak incomes immediately prior to the typical retirement age of 65. 
C)  adjust their consumption based on changes in their transitory income. 
D)  All of the above are correct.

Question 13

The United States has more income inequality than Brazil and South Africa.

Accepted Answer

A) True 
 B)False

Question 14

The Callaway family owns a small bait and tackle shop in a resort town in Wisconsin. An economic recession reduces the number of tourists for one summer, which reduces the family's income for that year. For the Callaway family, their

Accepted Answer

A)  transitory income for the year of the recession likely exceeds their permanent income. 
B)  permanent income likely exceeds their transitory income for the year of the recession. 
C)  permanent income will be more affected by the recession than their transitory income. 
D)  Both a and c are correct. 
A)  transitory income for the year of the recession likely exceeds their permanent income. 
B)  permanent income likely exceeds their transitory income for the year of the recession. 
C)  permanent income will be more affected by the recession than their transitory income. 
D)  Both a and c are correct.

Question 15

The ancient Greek philosopher, Plato, concluded that in an ideal society the income of the richest person

Accepted Answer

A)  would be equal to the income of the poorest person. 
B)  would be no more than four times the income of the poorest person. 
C)  would be reflective of the effort put forth by that person. 
D)  would be taxed at a higher rate than the income of the poorest person. 
A)  would be equal to the income of the poorest person. 
B)  would be no more than four times the income of the poorest person. 
C)  would be reflective of the effort put forth by that person. 
D)  would be taxed at a higher rate than the income of the poorest person.

Question 16

Scenario 20-5
Suppose the government implemented a negative income tax and used the following formula to compute a family's
tax liability:
Taxes owed = (1/4 of income) - $10,000
-Refer to Scenario 20-5. Below what level of income would families start to receive a subsidy from this negative income tax?

Accepted Answer

A)  $10,000 
B)  $25,000 
C)  $40,000 
D)  $50,000 
A)  $10,000 
B)  $25,000 
C)  $40,000 
D)  $50,000

Question 17

The poverty rate is an absolute level of income set by the federal government for each family size. A family with income below this rate is deemed to be in poverty.

Accepted Answer

A) True 
 B)False

Question 18

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. If Zooey decides to quit her job and earns $0 in income annually, how much more or less money will she have compared to continuing to work as a cashier?

Accepted Answer

A)  If she quits her job, she will have $10,000 less per year. 
B)  If she quits her job, she will have $15,000 less per year. 
C)  If she quits her job, she will have $10,000 more per year. 
D)  If she quits her job, she will have $15,000 more per year. 
A)  If she quits her job, she will have $10,000 less per year. 
B)  If she quits her job, she will have $15,000 less per year. 
C)  If she quits her job, she will have $10,000 more per year. 
D)  If she quits her job, she will have $15,000 more per year.

Question 19

Relative to direct cash payments, in-kind transfers have the advantage of being

Accepted Answer

A)  more politically popular. 
B)  more efficient. 
C)  more respectful of the poor. 
D)  of a higher dollar value than cash payments. 
A)  more politically popular. 
B)  more efficient. 
C)  more respectful of the poor. 
D)  of a higher dollar value than cash payments.

Question 20

Jermaine believes that it is important to maximize the well-being of the worst-off person in society. He believes in the principle called the .

Accepted Answer

The answer of Jermaine believes that it is important to...

What is meant by a perfectly equal distribution of income? Use a graph to depict such a situation.

Of the four countries below, the country that has the most income equality is

Which of the following does not explain why data on income distribution and the poverty rate give an incomplete picture of inequality?

In-kind transfers are politically popular because

The federal government sets the poverty line at roughly

Data for the United States suggests that about how many millionaires inherited their fortunes?

Which of the following statements is correct?

Figure 20-1 Number of Poor -Refer to Figure 20-1. Between 1965 and 2011, during recessions (the shaded bars) the number of individuals in poverty has

Liberalism suggests that public policies should aim to

Of the following countries, which has the most equal distribution of income? United States, Brazil, Mexico, China, Japan, Germany, United Kingdom, Russia

The typical economic life cycle illustrates how people tend to

The United States has more income inequality than Brazil and South Africa.

The Callaway family owns a small bait and tackle shop in a resort town in Wisconsin. An economic recession reduces the number of tourists for one summer, which reduces the family's income for that year. For the Callaway family, their

The ancient Greek philosopher, Plato, concluded that in an ideal society the income of the richest person

The poverty rate is an absolute level of income set by the federal government for each family size. A family with income below this rate is deemed to be in poverty.

Relative to direct cash payments, in-kind transfers have the advantage of being

Jermaine believes that it is important to maximize the well-being of the worst-off person in society. He believes in the principle called the .

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

What is meant by a perfectly equal distribution of income? Use a graph to depict such a situation.

Of the four countries below, the country that has the most income equality is

Which of the following does not explain why data on income distribution and the poverty rate give an incomplete picture of inequality?

In-kind transfers are politically popular because

The federal government sets the poverty line at roughly

Data for the United States suggests that about how many millionaires inherited their fortunes?

Which of the following statements is correct?

Figure 20-1 Number of Poor -Refer to Figure 20-1. Between 1965 and 2011, during recessions (the shaded bars) the number of individuals in poverty has

Liberalism suggests that public policies should aim to

Of the following countries, which has the most equal distribution of income? United States, Brazil, Mexico, China, Japan, Germany, United Kingdom, Russia

The typical economic life cycle illustrates how people tend to

The United States has more income inequality than Brazil and South Africa.

The Callaway family owns a small bait and tackle shop in a resort town in Wisconsin. An economic recession reduces the number of tourists for one summer, which reduces the family's income for that year. For the Callaway family, their

The ancient Greek philosopher, Plato, concluded that in an ideal society the income of the richest person

The poverty rate is an absolute level of income set by the federal government for each family size. A family with income below this rate is deemed to be in poverty.

Relative to direct cash payments, in-kind transfers have the advantage of being

Jermaine believes that it is important to maximize the well-being of the worst-off person in society. He believes in the principle called the .

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