Question 1

In 2011, what percentage of U.S. families had income levels above $115,866?

Accepted Answer

A)  10 percent 
B)  20 percent 
C)  60 percent 
D)  80 percent 
A)  10 percent 
B)  20 percent 
C)  60 percent 
D)  80 percent

Question 2

Table 20-15
Income Inequality in 2010 in the United States by Race
The values in the table reflect the percentages of pre-tax-and-transfer income.   Source: US Census Bureau
-Refer to Table 20-15. Which race shows the least equal distribution of income?

Accepted Answer

The answer of Table 20-15
Income Inequality in 2010 in the...

Question 3

Which of the following is not a question that economists try to answer when measuring the distribution of income?

Accepted Answer

A)  How many people live in poverty? 
B)  How often do people receive a raise at work? 
C)  How often do people move among income classes? 
D)  What problems arise in measuring the amount of inequality? 
A)  How many people live in poverty? 
B)  How often do people receive a raise at work? 
C)  How often do people move among income classes? 
D)  What problems arise in measuring the amount of inequality?

Question 4

When designing public policies, which income group would philosopher John Rawls argue needs the most attention?

Accepted Answer

A)  Individuals located in the bottom fifth of the income distribution. 
B)  Individuals located at the average income level. 
C)  Individuals located in the top fifth of the income distribution. 
D)  Individuals located in the top five percent of the income distribution. 
A)  Individuals located in the bottom fifth of the income distribution. 
B)  Individuals located at the average income level. 
C)  Individuals located in the top fifth of the income distribution. 
D)  Individuals located in the top five percent of the income distribution.

Question 5

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 6

The goal of liberalism is to

Accepted Answer

A)  redistribute income based on the assumption of diminishing marginal utility. 
B)  redistribute income in order to improve the well-being of the worst-off person in society. 
C)  punish crimes and enforce voluntary agreements but not to redistribute income. 
D)  measure happiness and satisfaction. 
A)  redistribute income based on the assumption of diminishing marginal utility. 
B)  redistribute income in order to improve the well-being of the worst-off person in society. 
C)  punish crimes and enforce voluntary agreements but not to redistribute income. 
D)  measure happiness and satisfaction.

Question 7

A government's policy of redistributing income makes the income distribution

Accepted Answer

A)  more equal, distorts incentives, alters behavior, and makes the allocation of resources more efficient. 
B)  more equal, distorts incentives, alters behavior, and makes the allocation of resources less efficient. 
C)  less equal, distorts incentives, alters behavior, and makes the allocation of resources more efficient. 
D)  less equal, distorts incentives, alters behavior, and makes the allocation of resources less efficient. 
A)  more equal, distorts incentives, alters behavior, and makes the allocation of resources more efficient. 
B)  more equal, distorts incentives, alters behavior, and makes the allocation of resources less efficient. 
C)  less equal, distorts incentives, alters behavior, and makes the allocation of resources more efficient. 
D)  less equal, distorts incentives, alters behavior, and makes the allocation of resources less efficient.

Question 8

The poverty line is based on the percentage of people who cannot afford an adequate diet.

Accepted Answer

A) True 
 B)False

Question 9

Based on data from 2011, the top fifth of all families received approximately what percent of all income in the United States?

Accepted Answer

A)  83 percent 
B)  49 percent 
C)  41 percent 
D)  21 percent 
A)  83 percent 
B)  49 percent 
C)  41 percent 
D)  21 percent

Question 10

The Supplemental Security Income (SSI) program focuses on the poor who are sick or disabled.

Accepted Answer

A) True 
 B)False

Question 11

If the U.S. government determines that the cost of feeding an urban family of four is $5,200 per year, then the official poverty line for a family of that type is

Accepted Answer

A)  $10,400. 
B)  $15,600. 
C)  $20,800. 
D)  $26,000. 
A)  $10,400. 
B)  $15,600. 
C)  $20,800. 
D)  $26,000.

Question 12

Which of the following is not an example of in-kind transfers?

Accepted Answer

A)  food stamps 
B)  Medicaid 
C)  the Earned Income Tax Credit 
D)  housing vouchers 
A)  food stamps 
B)  Medicaid 
C)  the Earned Income Tax Credit 
D)  housing vouchers

Question 13

Table 20-7  
-Refer to Table 20-7. Which of the following is the best overall conclusion to draw from the data?

Accepted Answer

A)  The most alarming statistic is the lowering of the top income level that defines the bottom fifth of the income distribution because this indicates that the income distribution is becoming more unequal. 
B)  The greatest cause for concern is the increase in the minimum income level that defines the top fifth of the income distribution because this indicates that the rich have become richer. 
C)  The income distribution has been relatively unchanged from 2001 to 2011. 
D)  Both a and b are correct. 
A)  The most alarming statistic is the lowering of the top income level that defines the bottom fifth of the income distribution because this indicates that the income distribution is becoming more unequal. 
B)  The greatest cause for concern is the increase in the minimum income level that defines the top fifth of the income distribution because this indicates that the rich have become richer. 
C)  The income distribution has been relatively unchanged from 2001 to 2011. 
D)  Both a and b are correct.

Question 14

Explain the concept of diminishing marginal utility, and describe the role that it plays in the utilitarian argument for the redistribution of income.

Accepted Answer

Diminishing marginal utility refers to t

Question 15

The income distribution in the United States shows that the income share of the top fifth of all families is

Accepted Answer

A)  over 60 percent. 
B)  around 21 percent. 
C)  more than 12 times the income of the bottom fifth. 
D)  less than 10 times the income of the bottom fifth. 
A)  over 60 percent. 
B)  around 21 percent. 
C)  more than 12 times the income of the bottom fifth. 
D)  less than 10 times the income of the bottom fifth.

Exam 20: Income Inequality and Poverty

In 2011, what percentage of U.S. families had income levels above $115,866?

Table 20-15 Income Inequality in 2010 in the United States by Race The values in the table reflect the percentages of pre-tax-and-transfer income. Source: US Census Bureau -Refer to Table 20-15. Which race shows the least equal distribution of income?

Which of the following is not a question that economists try to answer when measuring the distribution of income?

When designing public policies, which income group would philosopher John Rawls argue needs the most attention?

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 goal of liberalism is to

A government's policy of redistributing income makes the income distribution

The poverty line is based on the percentage of people who cannot afford an adequate diet.

Based on data from 2011, the top fifth of all families received approximately what percent of all income in the United States?

The Supplemental Security Income (SSI) program focuses on the poor who are sick or disabled.

If the U.S. government determines that the cost of feeding an urban family of four is $5,200 per year, then the official poverty line for a family of that type is

Which of the following is not an example of in-kind transfers?

Table 20-7 -Refer to Table 20-7. Which of the following is the best overall conclusion to draw from the data?

Explain the concept of diminishing marginal utility, and describe the role that it plays in the utilitarian argument for the redistribution of income.

The income distribution in the United States shows that the income share of the top fifth of all families is

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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