Question 1

Economic mobility in the United States is

Accepted Answer

A)  uncommon. Over 50 percent of poor families remain poor for 8 or more years. 
B)  uncommon. Over 75 percent of poor families remain poor for 8 or more years. 
C)  common. Fewer than 3 percent of poor families remain poor for 8 or more years. 
D)  common. Fewer than 1 percent of poor families remain poor for 8 or more years. 
A)  uncommon. Over 50 percent of poor families remain poor for 8 or more years. 
B)  uncommon. Over 75 percent of poor families remain poor for 8 or more years. 
C)  common. Fewer than 3 percent of poor families remain poor for 8 or more years. 
D)  common. Fewer than 1 percent of poor families remain poor for 8 or more years.

Question 2

Since 1970, has the distribution of income in the US become more equal, less equal, or remained unchanged?

Accepted Answer

The answer of Since 1970, has the distribution of income...

Question 3

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 4

In a typical 10-year period, about one in four families falls below the poverty line in at least one year. What percentage of families are poor for eight or more years?

Accepted Answer

The answer of In a typical 10-year period, about one...

Question 5

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 6

In 2011, the top 20% of US families had more than times as much income as the bottom 20%.

Accepted Answer

The answer of In 2011, the top 20% of US...

Question 7

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 8

A binding minimum wage

Accepted Answer

A)  affects employees but not employers. 
B)  lowers the productivity of workers. 
C)  raises the cost of labor to firms. 
D)  All of the above are correct. 
A)  affects employees but not employers. 
B)  lowers the productivity of workers. 
C)  raises the cost of labor to firms. 
D)  All of the above are correct.

Question 9

Table 20-4   Source: U.S. Bureau of Census
-Refer to Table 20-4. Comparing data from 2000 and 2011, which of the following statements is correct?

Accepted Answer

A)  There has been no change in overall income inequality because the share of income held by the fourth fifth is nearly identical. 
B)  Overall income inequality has worsened slightly, as shown by the simultaneous increase in the share of income held by the top fifth and the decrease in the share of income held by the bottom fifth. 
C)  Overall income inequality has improved because the share held by the second fifth has declined by 0.5%. 
D)  None of the above is correct. 
A)  There has been no change in overall income inequality because the share of income held by the fourth fifth is nearly identical. 
B)  Overall income inequality has worsened slightly, as shown by the simultaneous increase in the share of income held by the top fifth and the decrease in the share of income held by the bottom fifth. 
C)  Overall income inequality has improved because the share held by the second fifth has declined by 0.5%. 
D)  None of the above is correct.

Question 10

Table 20-14
Income Inequality in the United States
The values in the table reflect the percentages of pre-tax-and transfer income.   Source: US Census Bureau
-Refer to Table 20-14. In 2010, what percentage of total income in the US did the bottom 20% of families have?

Accepted Answer

The answer of Table 20-14
Income Inequality in the United States
The...

Question 11

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. Does Zooey owe or receive money from the government? How much?

Accepted Answer

She receiv

Question 12

Libertarianism identifies a redistribution of income role for government when

Accepted Answer

A)  the utility of the worst-off could be improved. 
B)  the income distribution is altered by illegal means (e.g. theft). 
C)  the total utility for society can be improved through redistribution of income. 
D)  a "veil of ignorance" would result in a recommendation of redistribution of income. 
A)  the utility of the worst-off could be improved. 
B)  the income distribution is altered by illegal means (e.g. theft). 
C)  the total utility for society can be improved through redistribution of income. 
D)  a "veil of ignorance" would result in a recommendation of redistribution of income.

Question 13

A disadvantage associated with a minimum wage law to reduce poverty is that it

Accepted Answer

A)  encourages illegitimate births because single women with children receive higher payments. 
B)  rewards laziness because it provides payments to those with low incomes regardless of their work effort. 
C)  focuses on children and the disabled while neglecting the working poor. 
D)  may benefit the teenage children of families who are not poor. 
A)  encourages illegitimate births because single women with children receive higher payments. 
B)  rewards laziness because it provides payments to those with low incomes regardless of their work effort. 
C)  focuses on children and the disabled while neglecting the working poor. 
D)  may benefit the teenage children of families who are not poor.

Question 14

Table 20-13
Distribution of Income in Imagination  
-Refer to Table 20-13. The Human Development Report computes a measure of inequality by dividing the income of the richest 10% of the population by the income of the poorest 10%. What is the value for this measure of inequality in Imagination?

Accepted Answer

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

Question 15

The English philosophers Jeremy Bentham and John Stuart Mill founded the school of thought called

Accepted Answer

A)  liberalism. 
B)  libertarianism. 
C)  mobilism. 
D)  utilitarianism. 
A)  liberalism. 
B)  libertarianism. 
C)  mobilism. 
D)  utilitarianism.

Question 16

According to the doctrine of liberalism, principles of justice are the result of

Accepted Answer

A)  fair agreement and bargain. 
B)  command-and-control policies. 
C)  domination of the powerful by the weak. 
D)  workers owning the factors of production. 
A)  fair agreement and bargain. 
B)  command-and-control policies. 
C)  domination of the powerful by the weak. 
D)  workers owning the factors of production.

Question 17

In the United States, long-term poverty, defined as a family having an income below the poverty line for eight or more years, is

Accepted Answer

A)  common, affecting approximately 25 percent of all American families. 
B)  common, affecting approximately 15 percent of all American families. 
C)  uncommon, affecting approximately 8 percent of all American families. 
D)  rare, affecting approximately 3 percent of all American families. 
A)  common, affecting approximately 25 percent of all American families. 
B)  common, affecting approximately 15 percent of all American families. 
C)  uncommon, affecting approximately 8 percent of all American families. 
D)  rare, affecting approximately 3 percent of all American families.

Question 18

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 19

One existing government program that works much like a negative income tax is the Earned Income Tax Credit.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

smaller th

Exam 20: Income Inequality and Poverty

Economic mobility in the United States is

Since 1970, has the distribution of income in the US become more equal, less equal, or remained unchanged?

Liberalism suggests that public policies should aim to

In a typical 10-year period, about one in four families falls below the poverty line in at least one year. What percentage of families are poor for eight or more years?

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

In 2011, the top 20% of US families had more than times as much income as the bottom 20%.

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?

A binding minimum wage

Table 20-4 Source: U.S. Bureau of Census -Refer to Table 20-4. Comparing data from 2000 and 2011, which of the following statements is correct?

Table 20-14 Income Inequality in the United States The values in the table reflect the percentages of pre-tax-and transfer income. Source: US Census Bureau -Refer to Table 20-14. In 2010, what percentage of total income in the US did the bottom 20% of families have?

Libertarianism identifies a redistribution of income role for government when

A disadvantage associated with a minimum wage law to reduce poverty is that it

Table 20-13 Distribution of Income in Imagination -Refer to Table 20-13. The Human Development Report computes a measure of inequality by dividing the income of the richest 10% of the population by the income of the poorest 10%. What is the value for this measure of inequality in Imagination?

The English philosophers Jeremy Bentham and John Stuart Mill founded the school of thought called

According to the doctrine of liberalism, principles of justice are the result of

In the United States, long-term poverty, defined as a family having an income below the poverty line for eight or more years, is

A negative income tax system would

One existing government program that works much like a negative income tax is the Earned Income Tax Credit.

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

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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