Question 1

A retired senior citizen is more likely to have low ________ but high ________,while a young NHL player is more likely to have high ________ but low ________.

Accepted Answer

A)   income;wealth;income;wealth
B)   wealth;income;wealth;income
C)   consumption;income;consumption;income
D)   wealth;consumption;wealth;consumption
E)   assets;liabilities;assets;liabilitiesF) A) and D)
G) B) and E)

Question 2

Different Lorenz curves for the same nation measured at different points in time show the changes in

Accepted Answer

A)   the actual degree of income inequality over time.
B)   the actual population over time.
C)   the actual disposable income earned by various sectors of the population over time.
D)   income inequality with respect to the trends in the distribution of income in the world over time.
E)   actual taxes paid over time.F) A) and D)
G) B) and E)

Question 3

A(n) __________ involves giving all citizens a substantial lump sum payment that is reduced at a rate of less than 100% as income is earned.

Accepted Answer

A)   minimum wage
B)   in-kind transfer
C)   social assistance payment
D)   negative income tax
E)   positive income taxF) A) and D)
G) B) and D)

Question 4

Which of the following would NOT be considered one of a family's assets,used in calculating wealth?

Accepted Answer

A)   The value of their primary residence.
B)   The value of their vacation home.
C)   Their chequing account.
D)   The mortgage on their primary residence.
E)   Their stock holdings.F) B) and E)
G) C) and D)

Question 5

For a family's wealth to decrease,it must be true that either the value of their assets has ________ or the value of their liabilities has ________.

Accepted Answer

A)   decreased;decreased
B)   increased;increased
C)   decreased;increased
D)   increased;decreased
E)   not changed;not changedF) D) and E)
G) A) and E)

Question 6

Suppose the current welfare system is completely eliminated and replaced with a negative income tax.The tax credit granted to everyone is $10,000 and the tax on earnings is 25%.
-Refer to the above information.Under the negative income tax,each extra dollar earned causes total income to

Accepted Answer

A)   remain constant.
B)   fall by 25 cents.
C)   rise by 25 cents.
D)   rise by 75 cents.
E)   rise or fall;it depends on whether one is above or below the breakeven level of income.F) A) and D)
G) A) and C)

Question 7

Refer to the graph below.If the area of region A is 0.17 and the area of region B is 0.33,then the Gini coefficient is.

Accepted Answer

A)   0.0561.
B)   0.34.
C)   0.515.
D)   1.94.
E)   2.04.F) B) and E)
G) A) and C)

Question 8

Leo is a welfare recipient who qualifies for two needs-tested cash benefits.If he does not earn any income,he receives $225 from each benefit.For each dollar he earns,each benefit is reduced by 75 cents until the benefit equals zero.
-Refer to the above information.If Leo only values income and not how the income is acquired,then he must earn __________ to be as well off as when __________ and receives benefits.

Accepted Answer

A)   $300;he earns nothing
B)   $150;he earns $50
C)   $250;he earns nothing
D)   $350;he earns nothing
E)   $450;he earns nothingF) None of the above
G) C) and D)

Question 9

Leo is a welfare recipient who qualifies for two needs-tested cash benefits.If he does not earn any income,he receives $225 from each benefit.For each dollar he earns,each benefit is reduced by 75 cents until the benefit equals zero.
-Refer to the above information.In the absence of earnings,Leo will receive __________ in benefits.

Accepted Answer

A)   $225
B)   $450
C)   $400
D)   $200
E)   $337F) A) and B)
G) C) and D)

Question 10

Income and wealth are related by the following identity:

Accepted Answer

A)   income + consumption = change in wealth.
B)   income - consumption = change in wealth.
C)   wealth + consumption = change in income.
D)   wealth - consumption = change in income.
E)   wealth - income = change in consumption.F) B) and C)
G) All of the above

Question 11

Suppose the current welfare system is completely eliminated and replaced with a negative income tax.The tax credit granted to everyone is $10,000 and the tax on earnings is 25%.
-Refer to the above information.If an individual earned $25,000,his total income would be

Accepted Answer

A)   $28,750.
B)   $26,250.
C)   $25,000.
D)   $20,000.
E)   $16,250.F) None of the above
G) A) and B)

Question 12

The percentage share of aggregate income controlled by the top 20% of families in Canada grew by __________ percentage points from 1951 to 2009.

Accepted Answer

A)   4
B)   12
C)   33
D)   40
E)   more than 50F) D) and E)
G) B) and C)

Question 13

The degree of inequality in the distribution of income in an economy is depicted in a(n)

Accepted Answer

A)   Lorenz curve.
B)   Phillips curve.
C)   Engels curve.
D)   indifference curve.
E)   demand curve.F) A) and E)
G) B) and D)

Question 14

If income were distributed completely equally,the Lorenz curve would be a

Accepted Answer

A)   45º line.
B)   horizontal line.
C)   vertical line.
D)   downward-sloping curve.
E)   downward-sloping straight line.F) C) and D)
G) A) and E)

Question 15

Between 1980 and 2009,the Gini coefficient of total income in Canada

Accepted Answer

A)   decreased.
B)   stayed the same.
C)   increased.
D)   turned negative.
E)   went to infinity.F) A) and E)
G) C) and E)

Question 16

Which of the following is NOT one of the capabilities that Amartya Sen considers to be basic?

Accepted Answer

A)   The capability to appear in public without shame.
B)   The ability to visit friends or go to work.
C)   The capability to understand the world around us.
D)   The ability to drive a car.
E)   The ability to function without pain.F) B) and D)
G) A) and E)

Question 17

According to the Lorenz curve shown,the middle quintile of families earns

Accepted Answer

A)   14.1% of the income.
B)   24% of the income.
C)   9.9% of the income.
D)   38.1% of the income.
E)   50.0% of the income.F) A) and C)
G) B) and C)

Question 18

Leo is a welfare recipient who qualifies for two needs-tested cash benefits.If he does not earn any income,he receives $225 from each benefit.For each dollar he earns,each benefit is reduced by 75 cents until the benefit equals zero.
-Refer to the above information.If Leo values income and not the source of the income,then if he can only earn $400,he will choose to

Accepted Answer

A)   work.
B)   not work and refuse the benefits.
C)   not work and accept the benefits.
D)   work part-time.
E)   work or not work;there is insufficient information to know for certain.F) A) and E)
G) All of the above

Question 19

Suppose a negative income tax has the following features: the lump sum amount is $8,000 and the breakeven income level is $20,000.The tax rate on earnings is

Accepted Answer

A)   100%.
B)   85%.
C)   60%.
D)   40%.
E)   20%.F) A) and C)
G) D) and E)

Question 20

-Refer to the table above.The average income of the ten households is

Accepted Answer

A)   $370,500.
B)   $71,400.
C)   $42,600.
D)   $39,100.
E)   $37,050.F) A) and B)
G) All of the above

Exam 13: The Economics of Public Policy

For a family's wealth to decrease,it must be true that either the value of their assets has or the value of their liabilities has .

Correct Answer
verified

According to the Lorenz curve shown,the middle quintile of families earns

Correct Answer
verified

Which of the following would NOT be considered one of a family's assets,used in calculating wealth?

Correct Answer
verified

Suppose the current welfare system is completely eliminated and replaced with a negative income tax.The tax credit granted to everyone is $10,000 and the tax on earnings is 25%. -Refer to the above information.Under the negative income tax,each extra dollar earned causes total income to

Correct Answer
verified

If income were distributed completely equally,the Lorenz curve would be a

Correct Answer
verified

Between 1980 and 2009,the Gini coefficient of total income in Canada

Correct Answer
verified

-Refer to the table above.The average income of the ten households is

Correct Answer
verified

Different Lorenz curves for the same nation measured at different points in time show the changes in

Correct Answer
verified

Suppose a negative income tax has the following features: the lump sum amount is $8,000 and the breakeven income level is $20,000.The tax rate on earnings is

Correct Answer
verified

The degree of inequality in the distribution of income in an economy is depicted in a(n)

Correct Answer
verified

Suppose the current welfare system is completely eliminated and replaced with a negative income tax.The tax credit granted to everyone is $10,000 and the tax on earnings is 25%. -Refer to the above information.If an individual earned $25,000,his total income would be

Correct Answer
verified

Correct Answer
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Which of the following is NOT one of the capabilities that Amartya Sen considers to be basic?

Correct Answer
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Correct Answer
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The percentage share of aggregate income controlled by the top 20% of families in Canada grew by __________ percentage points from 1951 to 2009.

Correct Answer
verified

Income and wealth are related by the following identity:

Correct Answer
verified

A retired senior citizen is more likely to have low but high ,while a young NHL player is more likely to have high but low .

Correct Answer
verified

A(n) __________ involves giving all citizens a substantial lump sum payment that is reduced at a rate of less than 100% as income is earned.

Correct Answer
verified

Refer to the graph below.If the area of region A is 0.17 and the area of region B is 0.33,then the Gini coefficient is.

Correct Answer
verified

Correct Answer
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Exam 13: The Economics of Public Policy

For a family's wealth to decrease,it must be true that either the value of their assets has ________ or the value of their liabilities has ________.

Correct AnswerverifiedShow Answer

According to the Lorenz curve shown,the middle quintile of families earns

Correct AnswerverifiedShow Answer

Which of the following would NOT be considered one of a family's assets,used in calculating wealth?

Correct AnswerverifiedShow Answer

Suppose the current welfare system is completely eliminated and replaced with a negative income tax.The tax credit granted to everyone is $10,000 and the tax on earnings is 25%. -Refer to the above information.Under the negative income tax,each extra dollar earned causes total income to

Correct AnswerverifiedShow Answer

If income were distributed completely equally,the Lorenz curve would be a

Correct AnswerverifiedShow Answer

Between 1980 and 2009,the Gini coefficient of total income in Canada

Correct AnswerverifiedShow Answer

-Refer to the table above.The average income of the ten households is

Correct AnswerverifiedShow Answer

Different Lorenz curves for the same nation measured at different points in time show the changes in

Correct AnswerverifiedShow Answer

Suppose a negative income tax has the following features: the lump sum amount is $8,000 and the breakeven income level is $20,000.The tax rate on earnings is

Correct AnswerverifiedShow Answer

The degree of inequality in the distribution of income in an economy is depicted in a(n)

Correct AnswerverifiedShow Answer

Suppose the current welfare system is completely eliminated and replaced with a negative income tax.The tax credit granted to everyone is $10,000 and the tax on earnings is 25%. -Refer to the above information.If an individual earned $25,000,his total income would be

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is NOT one of the capabilities that Amartya Sen considers to be basic?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The percentage share of aggregate income controlled by the top 20% of families in Canada grew by __________ percentage points from 1951 to 2009.

Correct AnswerverifiedShow Answer

Income and wealth are related by the following identity:

Correct AnswerverifiedShow Answer

A retired senior citizen is more likely to have low ________ but high ________,while a young NHL player is more likely to have high ________ but low ________.

Correct AnswerverifiedShow Answer

A(n) __________ involves giving all citizens a substantial lump sum payment that is reduced at a rate of less than 100% as income is earned.

Correct AnswerverifiedShow Answer

Refer to the graph below.If the area of region A is 0.17 and the area of region B is 0.33,then the Gini coefficient is.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

For a family's wealth to decrease,it must be true that either the value of their assets has or the value of their liabilities has .

Correct Answer
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A retired senior citizen is more likely to have low but high ,while a young NHL player is more likely to have high but low .

Correct Answer
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Correct Answer
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Correct Answer
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