Question 1

In the US, is it more likely that someone will become a millionaire by making money on his/her own or by inheriting a fortune?

Accepted Answer

Making mon

Question 2

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

Accepted Answer

A)  The female poverty rate is higher for all age groups than the male poverty rate. 
B)  The disparity between male and female poverty increases with age. 
C)  Neither a nor b are correct. 
D)  Both a and b are correct. 
A)  The female poverty rate is higher for all age groups than the male poverty rate. 
B)  The disparity between male and female poverty increases with age. 
C)  Neither a nor b are correct. 
D)  Both a and b are correct.

Question 3

In 2011 the top 20% of income earners accounted for over 80% of all income received by United States' families.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following explains the rise in income inequality in the United States from 1970 to 2011?

Accepted Answer

A)  An increase in minimum wages. 
B)  An increase in the demand for skilled labor. 
C)  An increase in the demand for unskilled labor. 
D)  Reduced international trade with low-wage countries. 
A)  An increase in minimum wages. 
B)  An increase in the demand for skilled labor. 
C)  An increase in the demand for unskilled labor. 
D)  Reduced international trade with low-wage countries.

Question 5

What is the term for a measure of happiness or satisfaction a person receives from his or her circumstances?

Accepted Answer

The answer of What is the term for a measure...

Question 6

John Rawls, who developed the way of thinking called liberalism, argued that government policies should be aimed at maximizing the sum of utility of everyone in society.

Accepted Answer

A) True 
 B)False

Question 7

"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 8

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

Accepted Answer

A)  almost 13 times as much income as the bottom fifth of families. 
B)  28.2% more income than the bottom fifth of families. 
C)  50.3% more income than the bottom fifth of families. 
D)  45.1% more income than the bottom fifth of families. 
A)  almost 13 times as much income as the bottom fifth of families. 
B)  28.2% more income than the bottom fifth of families. 
C)  50.3% more income than the bottom fifth of families. 
D)  45.1% more income than the bottom fifth of families.

Question 9

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...

Question 10

The 2011 U.S. distribution of income shows that the top 5 percent of families have approximately what share of income?

Accepted Answer

A)  4 percent 
B)  9 percent 
C)  21 percent 
D)  49 percent 
A)  4 percent 
B)  9 percent 
C)  21 percent 
D)  49 percent

Question 11

Which of the Ten Principles of Economics do governments run into when they redistribute income to achieve greater equality?

Accepted Answer

A)  Trade can make everyone better off. 
B)  The cost of something is what you give up to get it. 
C)  People face trade-offs. 
D)  Markets are usually a good way to organize economic activity. 
A)  Trade can make everyone better off. 
B)  The cost of something is what you give up to get it. 
C)  People face trade-offs. 
D)  Markets are usually a good way to organize economic activity.

Question 12

If a father earns 20% above his generation's average income, his son will most likely earn what percent above his generation's average income? What does this statistic indicate?

Accepted Answer

8% Persistence of economic suc

Question 13

Which of the following statements is not correct?

Accepted Answer

A)  Libertarians are opposed to redistributing income. 
B)  Critics of the welfare system argue that it breaks up families. 
C)  One of the problems with measuring income inequality is valuing in-kind transfers. 
D)  Utilitarians believe that the government should punish crimes but should not redistribute income. 
A)  Libertarians are opposed to redistributing income. 
B)  Critics of the welfare system argue that it breaks up families. 
C)  One of the problems with measuring income inequality is valuing in-kind transfers. 
D)  Utilitarians believe that the government should punish crimes but should not redistribute income.

Question 14

Which of the following statements is correct?

Accepted Answer

A)  The poverty line is a relative standard. 
B)  More families are pushed above the poverty line as economic growth pushes the entire income distribution upward. 
C)  Increasing income inequality reduces poverty. 
D)  Economic growth, by definition, affects all families equally. 
A)  The poverty line is a relative standard. 
B)  More families are pushed above the poverty line as economic growth pushes the entire income distribution upward. 
C)  Increasing income inequality reduces poverty. 
D)  Economic growth, by definition, affects all families equally.

Question 15

The poverty rate is based on a family's

Accepted Answer

A)  income, in-kind transfers, and other government aid. 
B)  income and in-kind transfers. 
C)  in-kind transfers only. 
D)  income only. 
A)  income, in-kind transfers, and other government aid. 
B)  income and in-kind transfers. 
C)  in-kind transfers only. 
D)  income only.

Question 16

In the U.S. economy, labor earnings make up about

Accepted Answer

A)  one-half of total income. 
B)  two-thirds of total income. 
C)  three-fourths of total income. 
D)  nine-tenths of total income. 
A)  one-half of total income. 
B)  two-thirds of total income. 
C)  three-fourths of total income. 
D)  nine-tenths of total income.

Question 17

Which philosopher claimed that the government should aim to maximize the well-being of the worst-off person in society?

Accepted Answer

The answer of Which philosopher claimed that the government should...

Question 18

Temporary Assistance for Needy Families (TANF) is an example of a negative income tax program.

Accepted Answer

A) True 
 B)False

Question 19

Table 20-11
Poverty Thresholds in 2011, by Size of Family and Number of Related Children Under 18 Years [Dollars]   Source: U. S. Bureau of the Census, Current Population Survey.
-Refer to Table 20-11. What is the poverty line for a family of three with one child?

Accepted Answer

A)  $17,595 
B)  $18,106 
C)  $18,123 
D)  $22,891 
A)  $17,595 
B)  $18,106 
C)  $18,123 
D)  $22,891

Question 20

Raising total utility is the prime objective of which political philosophy?

Accepted Answer

A)  utilitarianism 
B)  liberalism 
C)  libertarianism 
D)  None of the above is correct. 
A)  utilitarianism 
B)  liberalism 
C)  libertarianism 
D)  None of the above is correct.

Exam 20: Income Inequality and Poverty

In the US, is it more likely that someone will become a millionaire by making money on his/her own or by inheriting a fortune?

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

In 2011 the top 20% of income earners accounted for over 80% of all income received by United States' families.

Which of the following explains the rise in income inequality in the United States from 1970 to 2011?

What is the term for a measure of happiness or satisfaction a person receives from his or her circumstances?

John Rawls, who developed the way of thinking called liberalism, argued that government policies should be aimed at maximizing the sum of utility of everyone in society.

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

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

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 .

The 2011 U.S. distribution of income shows that the top 5 percent of families have approximately what share of income?

Which of the Ten Principles of Economics do governments run into when they redistribute income to achieve greater equality?

If a father earns 20% above his generation's average income, his son will most likely earn what percent above his generation's average income? What does this statistic indicate?

Which of the following statements is not correct?

Which of the following statements is correct?

The poverty rate is based on a family's

In the U.S. economy, labor earnings make up about

Which philosopher claimed that the government should aim to maximize the well-being of the worst-off person in society?

Temporary Assistance for Needy Families (TANF) is an example of a negative income tax program.

Table 20-11 Poverty Thresholds in 2011, by Size of Family and Number of Related Children Under 18 Years [Dollars] Source: U. S. Bureau of the Census, Current Population Survey. -Refer to Table 20-11. What is the poverty line for a family of three with one child?

Raising total utility is the prime objective of which political philosophy?

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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