Question 1

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...

Question 2

Table 20-11
Poverty Thresholds in 2011, by Size of Family and Number of Related Children Under 18 Years [Dollars]
 
-Refer to Table 20-11. What is the poverty line for a family of eight with two children?

Accepted Answer

A)   $18,123
B)   $36,463
C)   $41,027
D)   $43,487E) None of the above
F) B) and C)

Question 3

If the imposition of a binding minimum wage results in much higher unemployment among workers seeking minimum wage jobs,

Accepted Answer

A)   firms will respond by demanding more labor.
B)   those workers who are employed will be worse off than before the minimum wage law.
C)   labor demand is relatively elastic.
D)   labor demand is relatively inelastid.E) B) and D)
F) A) and C)

Question 4

The US government sets the poverty line equal to approximately

Accepted Answer

A)   three times the cost of providing subsidized housing.
B)   three times the cost of providing an adequate diet.
C)   the minimum wage for a single person working 40 hours per week and 50 weeks per year.
D)   the cost of providing food, shelter, and health care expenses for a family of four.E) A) and D)
F) A) and C)

Question 5

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.E) C) and D)
F) A) and B)

Question 6

The 2011 U.S. distribution of income shows that the top 20 percent of all families have

Accepted Answer

A)   more than twelve times the income of the bottom 20 percent.
B)   more than six times the income of the bottom 20 percent.
C)   more than 100 percent more income than the bottom 20 percent.
D)   the same share of income as the bottom 20 percent.E) A) and C)
F) A) and B)

Question 7

Utilitarians believe that the proper goal of the government is to maximize the sum of the utilities of everyone in society.

Accepted Answer

A) True 
 B)False

Question 8

Measuring poverty using an absolute income scale like the poverty line can be misleading because

Accepted Answer

A)   income measures do not include the value of in-kind transfers.
B)   money is more highly valued by the rich than by the poor.
C)   the poor are not likely to participate in the labor market.
D)   income measures are not adjusted for the effects of labor-market discrimination.E) B) and C)
F) A) and B)

Question 9

The statement that "measures of the distribution of income are based on money income" relates to which problem in measuring inequality?

Accepted Answer

A)   in-kind transfers
B)   economic life cycle
C)   transitory versus permanent income
D)   economic mobilityE) A) and C)
F) B) and C)

Question 10

Which of the following is not correct?

Accepted Answer

A)   Toys for Tots, a program that collects new toys to distribute to poor children at Christmas, is an example of an in-kind transfer.
B)   Supporters advocate the use of in-kind transfers because they restrict the ability of recipients to purchase alcohol and drugs.
C)   Critics argue that in-kind transfers are inefficient and disrespectful.
D)   For a program to qualify as an in-kind transfer, it must have government approval.E) None of the above
F) B) and D)

Question 11

Most economists believe that a family bases its spending decisions on its transitory income.

Accepted Answer

A) True 
 B)False

Question 12

Figure 20-5 
-Refer to Figure 20-5. If the government imposes a minimum wage above Wo, it is likely to

Accepted Answer

A)   increase employment to a level above Qo.
B)   reduce employment to a level below Qo.
C)   provide more income to the working poor than they collectively received before the minimum wage was set.
D)   have no effect on employment.E) C) and D)
F) A) and B)

Question 13

Which of the following programs would be opposed by philosopher John Rawls?

Accepted Answer

A)   a negative income tax
B)   the Supplemental Security Income (SSI)  program
C)   a tax plan creating a perfectly egalitarian income distribution
D)   Rawls would oppose all of the programs.E) A) and C)
F) A) and D)

Question 14

Scenario 20-3
Suppose that a society is made up of five families whose incomes are as follows:
$120,000; $90,000; $30,000; $30,000; and $18,000.
The federal government is considering two potential income tax plans:
Plan A is a negative income tax plan where the taxes owed equal 1/3 of income minus $20,000.
Plan B is a two-tiered plan where families earning less than $35,000 pay no income tax and families earning more than $35,000 pay 10% of their income in taxes. The income tax revenue collected from those families earning over
$35,000 is then redistributed equally to those families earning less than $35,000.
-Refer to Scenario 20-3. Assuming that utility is directly proportional to the cash value of after-tax income, which government policy would an advocate of utilitarianism prefer?

Accepted Answer

A)   Plan A
B)   Plan B
C)   either Plan A or Plan B
D)   neither Plan A nor Plan B because any plan that forcibly redistributes income is against the philosophyE) All of the above
F) C) and D)

Question 15

Figure 20-3 
-Refer to Figure 20-3. Which of the following best describes the poverty rates by age from 1965 to 2011?

Accepted Answer

A)   The poverty rates by age have declined for all age groups.
B)   The percentage of people living in poverty has consistently been highest for the elderly aged 65 and over and lowest for adults aged 18 to 64.
C)   The percentage of children under age 18 and the percentage of adults aged 18 to 64 have maintained a similar trend while the percentage of elderly aged 65 and over has decreased significantly.
D)   The poverty rates by age have increased for all age groups.E) All of the above
F) A) and B)

Question 16

The concept of utility is fundamental to utilitarianism and describes the

Accepted Answer

A)   optimal distribution of wealth in society.
B)   level of satisfaction derived from a person's circumstances.
C)   method by which society chooses to allocate resources.
D)   method whereby wealth is stored.E) B) and D)
F) A) and B)

Question 17

The United States has greater income

Accepted Answer

A)   disparity than most other economically advanced countries, but a more equal income distribution than some developing countries.
B)   disparity than both other economically advanced and all developing countries.
C)   equality than most other economically advanced countries but greater income disparity than some developing countries.
D)   equality than both other economically advanced and developing countries.E) C) and D)
F) B) and C)

Question 18

The study by economists Cox and Alm found

Accepted Answer

A)   inequality in consumption is much smaller than inequality in annual income.
B)   inequality in consumption is slightly smaller than inequality in annual income.
C)   inequality in consumption is slightly larger than inequality in annual income.
D)   inequality in consumption is much larger than inequality in annual income.E) None of the above
F) A) and D)

Question 19

Economists Cox and Alm compared the gap between rich and poor and found that the richest 20% was about 15 times better off than the poorest 20% when they compared what data?

Accepted Answer

The answer of Economists Cox and Alm compared the gap...

Question 20

Scenario 20-3
Suppose that a society is made up of five families whose incomes are as follows:
$120,000; $90,000; $30,000; $30,000; and $18,000.
The federal government is considering two potential income tax plans:
Plan A is a negative income tax plan where the taxes owed equal 1/3 of income minus $20,000.
Plan B is a two-tiered plan where families earning less than $35,000 pay no income tax and families earning more than $35,000 pay 10% of their income in taxes. The income tax revenue collected from those families earning over
$35,000 is then redistributed equally to those families earning less than $35,000.
-Refer to Scenario 20-3. Assuming that utility is directly proportional to the cash value of after-tax income, which government policy would an advocate of liberalism prefer?

Accepted Answer

A)   Plan A
B)   Plan B
C)   either Plan A or Plan B
D)   neither Plan A nor Plan B because any plan that forcibly redistributes income is against the philosophyE) B) and D)
F) B) and C)

Exam 20: Income Inequality and Poverty

Correct Answer
verified

The concept of utility is fundamental to utilitarianism and describes the

Correct Answer
verified

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

Correct Answer
verified
smaller th...
View Answer

The study by economists Cox and Alm found

Correct Answer
verified

The 2011 U.S. distribution of income shows that the top 20 percent of all families have

Correct Answer
verified

If the imposition of a binding minimum wage results in much higher unemployment among workers seeking minimum wage jobs,

Correct Answer
verified

Economists Cox and Alm compared the gap between rich and poor and found that the richest 20% was about 15 times better off than the poorest 20% when they compared what data?

Correct Answer
verified

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

Correct Answer
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Which of the following is not correct?

Correct Answer
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Utilitarians believe that the proper goal of the government is to maximize the sum of the utilities of everyone in society.

Correct Answer
verified

Table 20-11 Poverty Thresholds in 2011, by Size of Family and Number of Related Children Under 18 Years [Dollars] -Refer to Table 20-11. What is the poverty line for a family of eight with two children?

Correct Answer
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Figure 20-5 -Refer to Figure 20-5. If the government imposes a minimum wage above Wo, it is likely to

Correct Answer
verified

The United States has greater income

Correct Answer
verified

Correct Answer
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Which of the following programs would be opposed by philosopher John Rawls?

Correct Answer
verified

The statement that "measures of the distribution of income are based on money income" relates to which problem in measuring inequality?

Correct Answer
verified

Measuring poverty using an absolute income scale like the poverty line can be misleading because

Correct Answer
verified

Most economists believe that a family bases its spending decisions on its transitory income.

Correct Answer
verified

Figure 20-3 -Refer to Figure 20-3. Which of the following best describes the poverty rates by age from 1965 to 2011?

Correct Answer
verified

The US government sets the poverty line equal to approximately

Correct Answer
verified

Exam 20: Income Inequality and Poverty

Correct AnswerverifiedShow Answer

The concept of utility is fundamental to utilitarianism and describes the

Correct AnswerverifiedShow Answer

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

Correct Answerverifiedsmaller th...View AnswerShow Answer

The study by economists Cox and Alm found

Correct AnswerverifiedShow Answer

The 2011 U.S. distribution of income shows that the top 20 percent of all families have

Correct AnswerverifiedShow Answer

If the imposition of a binding minimum wage results in much higher unemployment among workers seeking minimum wage jobs,

Correct AnswerverifiedShow Answer

Economists Cox and Alm compared the gap between rich and poor and found that the richest 20% was about 15 times better off than the poorest 20% when they compared what data?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

Utilitarians believe that the proper goal of the government is to maximize the sum of the utilities of everyone in society.

Correct AnswerverifiedShow Answer

Table 20-11 Poverty Thresholds in 2011, by Size of Family and Number of Related Children Under 18 Years [Dollars] -Refer to Table 20-11. What is the poverty line for a family of eight with two children?

Correct AnswerverifiedShow Answer

Figure 20-5 -Refer to Figure 20-5. If the government imposes a minimum wage above Wo, it is likely to

Correct AnswerverifiedShow Answer

The United States has greater income

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following programs would be opposed by philosopher John Rawls?

Correct AnswerverifiedShow Answer

The statement that "measures of the distribution of income are based on money income" relates to which problem in measuring inequality?

Correct AnswerverifiedShow Answer

Measuring poverty using an absolute income scale like the poverty line can be misleading because

Correct AnswerverifiedShow Answer

Most economists believe that a family bases its spending decisions on its transitory income.

Correct AnswerverifiedShow Answer

Figure 20-3 -Refer to Figure 20-3. Which of the following best describes the poverty rates by age from 1965 to 2011?

Correct AnswerverifiedShow Answer

The US government sets the poverty line equal to approximately

Correct AnswerverifiedShow Answer

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smaller th...
View Answer

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