Question 1

Which political philosophy focuses on the process of determining the distribution of income rather than on the outcome?

Accepted Answer

A)  utilitarianism
B)  liberalism
C)  libertarianism
D)  welfarismE) B) and C)
F) A) and B)

Question 2

Table 20-13
The following table shows the distribution of income in Widgetapolis.  ​
-Refer to Table 20-13. Eighty percent of all families have incomes below what level?

Accepted Answer

A)  $39,000
B)  $60,000
C)  $82,000
D)  $110,000E) B) and D)
F) All of the above

Question 3

Economists who support minimum-wage legislation are likely to believe that the

Accepted Answer

A)  demand for unskilled labor is relatively inelastic.
B)  demand for unskilled labor is relatively elastic.
C)  supply of unskilled labor is relatively elastic.
D)  supply of unskilled labor is relatively inelastic.E) A) and B)
F) All of the above

Question 4

Table 20-10  *A Gini coefficient is a commonly used measure of income inequality, with values between 0 and 1 (0 corresponds to perfect equality whereby everyone has exactly the same income, and 1 corresponds to perfect inequality where one person has all the income, while everyone else has zero income) .
Source: The World Bank
-Refer to Table 20-10. Which country has the most equal income distribution?

Accepted Answer

A)  Latvia
B)  Italy
C)  France
D)  SwedenE) A) and B)
F) None of the above

Question 5

Figure 20-1
Number of Poor 
-Refer to Figure 20-1. Between 1965 and 2011, during recessions (the shaded bars)  the number of individuals in poverty has

Accepted Answer

A)  increased.
B)  decreased.
C)  not changed.
D)  decreased and then increased.E) B) and D)
F) A) and C)

Question 6

In the United States, long-term poverty affects

Accepted Answer

A)  more families than short-term poverty.
B)  an equal number of families as short-term poverty.
C)  slightly fewer families than short-term poverty.
D)  many fewer families than short-term poverty.E) C) and D)
F) B) and C)

Question 7

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 eight with two children?

Accepted Answer

A)  $18,123
B)  $36,463
C)  $41,027
D)  $43,487E) All of the above
F) A) and B)

Question 8

Governments enact policies to

Accepted Answer

A)  make the distribution of income more efficient.
B)  make the distribution of income more equal.
C)  maximize the use of the welfare system.
D)  minimize the use of in-kind transfers.E) A) and C)
F) B) and C)

Question 9

Table 20-13
The following table shows the distribution of income in Widgetapolis.  ​
-Refer to Table 20-13. Twenty percent of all families have incomes above what level?

Accepted Answer

A)  $39,000
B)  $60,000
C)  $82,000
D)  $110,000E) B) and C)
F) A) and D)

Question 10

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 11

The economic life cycle describes how young people usually have higher savings rates than middle-aged people.

Accepted Answer

A) True 
 B)False

Question 12

The Callaway family owns a small bait and tackle shop in a resort town in Wisconsin. An economic recession reduces the number of tourists for one summer, which reduces the family's income for that year. For the Callaway family, their

Accepted Answer

A)  transitory income for the year of the recession likely exceeds their permanent income.
B)  permanent income likely exceeds their transitory income for the year of the recession.
C)  permanent income will be more affected by the recession than their transitory income.
D)  Both a and c are correct.E) A) and C)
F) A) and D)

Question 13

The best government policy to reduce poverty is

Accepted Answer

A)  a minimum wage law because the resulting unemployment is small in comparison to the benefits to people it helps.
B)  an expanded welfare program because people must have an additional "need" such as small children or a disability.
C)  an in-kind transfer because it ensures that the poor receive what they need most such as food or shelter.
D)  not obvious. Government programs to reduce poverty have many advantages but also many disadvantages.E) A) and B)
F) A) and C)

Question 14

Suppose the government used the following formula to compute a family's tax liability:
Taxes owed = 28% of income - $8,000. How much would a family that earned $75,000 owe?

Accepted Answer

The answer of Suppose the government used the following formula...

Question 15

Of the four countries below, which has the highest degree of income inequality?

Accepted Answer

A)  Germany
B)  Turkey
C)  South Africa
D)  MexicoE) A) and B)
F) A) and C)

Question 16

Which of the following statements accurately characterizes the effects of minimum-wage laws?

Accepted Answer

A)  Some workers who might have been employed at a lower wage become unemployed.
B)  Those workers who remain employed benefit from a higher wage.
C)  The effects of minimum-wage laws depend strongly on the elasticity of demand.
D)  All of the above accurately characterize the effects of minimum-wage laws.E) All of the above
F) A) and B)

Question 17

The poverty line is

Accepted Answer

A)  established by the federal government.
B)  approximately equivalent to three times the cost of providing an adequate diet.
C)  an absolute level of income below which a family is deemed to be in poverty.
D)  All of the above are correct.E) None of the above
F) A) and D)

Question 18

Scenario 20-2
The government is proposing switching from a progressive tax system, in which families pay 15% of the first $40,000 earned, 30% of the next $40,000 earned, and 45% of any income over $80,000 to a tax system in which every family pays 1/4 of its income regardless of how much they earn and all income redistribution is eliminated. That is, the tax revenue generated is used only for infrastructure, public administration, and national defense.
-Refer to Scenario 20-2. Which group would be most in favor of the proposed change in tax policy?

Accepted Answer

A)  Liberals, because they believe in the maximin criterion.
B)  Libertarians, because they do not believe in redistributing income.
C)  Utilitarians, because they believe in diminishing marginal utility.
D)  None of the above would be in favor of the proposed change.E) None of the above
F) C) and D)

Question 19

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

Question 20

The study by economists Cox and Alm found that the 2006 after-tax income of the richest fifth of U.S. households is

Accepted Answer

A)  equal to the after-tax income of the poorest fifth.
B)  7 times the after-tax income of the poorest fifth.
C)  14 times the after-tax income of the poorest fifth.
D)  21 times the after-tax income of the poorest fifth.E) A) and B)
F) All of the above

Exam 20: Income Inequality and Poverty

Of the four countries below, which has the highest degree of income inequality?

Correct Answer
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Which of the following statements accurately characterizes the effects of minimum-wage laws?

Correct Answer
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Correct Answer
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Which political philosophy focuses on the process of determining the distribution of income rather than on the outcome?

Correct Answer
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Table 20-13 The following table shows the distribution of income in Widgetapolis. -Refer to Table 20-13. Eighty percent of all families have incomes below what level?

Correct Answer
verified

Table 20-13 The following table shows the distribution of income in Widgetapolis. -Refer to Table 20-13. Twenty percent of all families have incomes above what level?

Correct Answer
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Figure 20-1 Number of Poor -Refer to Figure 20-1. Between 1965 and 2011, during recessions (the shaded bars) the number of individuals in poverty has

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
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Suppose the government used the following formula to compute a family's tax liability: Taxes owed = 28% of income - $8,000. How much would a family that earned $75,000 owe?

Correct Answer
verified

The study by economists Cox and Alm found that the 2006 after-tax income of the richest fifth of U.S. households is

Correct Answer
verified

Governments enact policies to

Correct Answer
verified

Economists who support minimum-wage legislation are likely to believe that the

Correct Answer
verified

The poverty line is

Correct Answer
verified

The economic life cycle describes how young people usually have higher savings rates than middle-aged people.

Correct Answer
verified

The Callaway family owns a small bait and tackle shop in a resort town in Wisconsin. An economic recession reduces the number of tourists for one summer, which reduces the family's income for that year. For the Callaway family, their

Correct Answer
verified

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 eight with two children?

Correct Answer
verified

In the United States, long-term poverty affects

Correct Answer
verified

Correct Answer
verified
She receiv...
View Answer

Correct Answer
verified

The best government policy to reduce poverty is

Correct Answer
verified

Exam 20: Income Inequality and Poverty

Of the four countries below, which has the highest degree of income inequality?

Correct AnswerverifiedShow Answer

Which of the following statements accurately characterizes the effects of minimum-wage laws?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which political philosophy focuses on the process of determining the distribution of income rather than on the outcome?

Correct AnswerverifiedShow Answer

Table 20-13 The following table shows the distribution of income in Widgetapolis. ​ -Refer to Table 20-13. Eighty percent of all families have incomes below what level?

Correct AnswerverifiedShow Answer

Table 20-13 The following table shows the distribution of income in Widgetapolis. ​ -Refer to Table 20-13. Twenty percent of all families have incomes above what level?

Correct AnswerverifiedShow Answer

Figure 20-1 Number of Poor -Refer to Figure 20-1. Between 1965 and 2011, during recessions (the shaded bars) the number of individuals in poverty has

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Suppose the government used the following formula to compute a family's tax liability: Taxes owed = 28% of income - $8,000. How much would a family that earned $75,000 owe?

Correct AnswerverifiedShow Answer

The study by economists Cox and Alm found that the 2006 after-tax income of the richest fifth of U.S. households is

Correct AnswerverifiedShow Answer

Governments enact policies to

Correct AnswerverifiedShow Answer

Economists who support minimum-wage legislation are likely to believe that the

Correct AnswerverifiedShow Answer

The poverty line is

Correct AnswerverifiedShow Answer

The economic life cycle describes how young people usually have higher savings rates than middle-aged people.

Correct AnswerverifiedShow Answer

The Callaway family owns a small bait and tackle shop in a resort town in Wisconsin. An economic recession reduces the number of tourists for one summer, which reduces the family's income for that year. For the Callaway family, their

Correct AnswerverifiedShow Answer

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 eight with two children?

Correct AnswerverifiedShow Answer

In the United States, long-term poverty affects

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShe receiv...View AnswerShow Answer

Correct AnswerverifiedShow Answer

The best government policy to reduce poverty is

Correct AnswerverifiedShow Answer

Correct Answer
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Table 20-13 The following table shows the distribution of income in Widgetapolis. -Refer to Table 20-13. Eighty percent of all families have incomes below what level?

Correct Answer
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Table 20-13 The following table shows the distribution of income in Widgetapolis. -Refer to Table 20-13. Twenty percent of all families have incomes above what level?

Correct Answer
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She receiv...
View Answer

Correct Answer
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Correct Answer
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