Question 1

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

Question 2

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 with one 35-year-old adult and one child?

Accepted Answer

A)  $11,702
B)  $15,446
C)  $15,504
D)  $18,106E) A) and B)
F) A) and C)

Question 3

Because people can borrow when they are young, the life cycle theory would suggest that one's standard of living depends on

Accepted Answer

A)  lifetime income rather than annual income.
B)  aggregate income rather than annual personal income.
C)  annual extended-family income rather than annual personal income.
D)  income averaged across seasons rather than across years.E) None of the above
F) A) and B)

Question 4

Which of the following is not an example of a welfare program?

Accepted Answer

A)  Supplemental Security Income (SSI) 
B)  Temporary Assistance for Needy Families (TANF) 
C)  food stamps
D)  minimum wage lawsE) A) and D)
F) A) and C)

Question 5

Which of the following statements is correct?

Accepted Answer

A)  Less than three percent of families are categorized as poor for eight years or more.
B)  In the United States, the grandson of a millionaire is much more likely to be rich than the grandson of an average-income person.
C)  The majority of millionaires in the United States inherited their wealth.
D)  Most workers have about the same income (adjusted for inflation)  when they are young as when they are middle-aged.E) A) and B)
F) A) and C)

Question 6

Saving and borrowing is indicative of a family that

Accepted Answer

A)  is most likely to be poor.
B)  has a difficult time balancing its standard of living.
C)  does not adjust its standard of living to reflect transitory changes in income.
D)  is most likely millionaires.E) All of the above
F) B) and D)

Question 7

A society consists of three individuals: Sam, Tristan, and Ulyana. In terms of income and utility, Sam is currently best-off, Tristan ranks in the middle, and Ulyana is worst-off. Which of the following statements is correct?

Accepted Answer

A)  Utilitarianism suggests that government policies should strive to maximize Ulyana's utility.
B)  Liberalism suggests that government policies should strive to increase Ulyana's utility.
C)  Libertarianism suggests that government policies should strive to improve Tristan's utility at the cost of Sam's utility.
D)  Libertarianism suggests that government policies should strive to make Sam, Tristan, and Ulyana equally well off.E) B) and C)
F) C) and D)

Question 8

Scenario 20-6
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 20-6. How much does Zooey owe or receive from the government?

Accepted Answer

A)  She receives $10,000.
B)  She owes $10,000.
C)  She receives $15,000.
D)  She owes $5,000E) None of the above
F) C) and D)

Question 9

A utilitarian government will pursue policies that redistribute income from the rich to the poor. One problem with these policies is that

Accepted Answer

A)  everyone has less incentive to work hard.
B)  the rich will work harder while the poor will not.
C)  the poor will work harder while the rich will not.
D)  everyone in the middle class ends up worse off.E) None of the above
F) All of the above

Question 10

Figure 20-3 
-Refer to Figure 20-3. In 1968, the percent of children under age 18 in poverty is

Accepted Answer

A)  higher than both the percentage of adults aged 18 to 64 and the percentage of elderly aged 65 and over in poverty.
B)  higher than the percentage of adults aged 18 to 64 but is lower than the percentage of elderly aged 65 and over in poverty.
C)  lower than both the percentage of adults aged 18 to 64 and the percentage of elderly aged 65 and over in poverty.
D)  lower than the percentage of adults aged 18 to 64 but is higher than the percentage of elderly aged 65 and over in poverty.E) A) and C)
F) All of the above

Question 11

Scenario 20-8
Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability:
Taxes owed = (1/4 of income) - $14,000
​
​
-Refer to Scenario 20-8. The government does not receive any tax revenue through this negative income tax if the family with the highest income earns $56,000.

Accepted Answer

A) True 
 B)False

Question 12

In the United States approximately 80 percent of millionaires did not inherit their wealth. This illustrates the

Accepted Answer

A)  amount of transitory income in the United States.
B)  effectiveness of government anti-poverty programs in the United States.
C)  great economic mobility in the United States.
D)  level of permanent income in the United States.E) C) and D)
F) A) and B)

Question 13

Table 20-13
Distribution of Income in Imagination 
-Refer to Table 20-13. If the poverty line in Imagination is $18,000, what is the poverty rate?

Accepted Answer

The answer of Table 20-13
Distribution of Income in Imagination 
-Refer...

Question 14

Anti-poverty programs

Accepted Answer

A)  encourage saving among recipient groups.
B)  impose a very low marginal tax rate on income.
C)  are only made available to those with no other source of income.
D)  may discourage the poor from escaping poverty on their own.E) B) and C)
F) A) and B)

Question 15

The poverty rate for female households with no spouse present is approximately

Accepted Answer

A)  10 percent.
B)  20 percent.
C)  30 percent.
D)  40 percent.E) A) and D)
F) None of the above

Question 16

The English philosophers Jeremy Bentham and John Stuart Mill founded the school of thought called

Accepted Answer

A)  liberalism.
B)  libertarianism.
C)  mobilism.
D)  utilitarianism.E) B) and D)
F) A) and B)

Question 17

Binding minimum-wage laws

Accepted Answer

A)  are costly for the government to impose.
B)  force a market imbalance between the supply and demand for labor.
C)  have the potential to provide benefits to all poor people, whereas a negative tax can only benefit some poor people.
D)  do not affect segments of the population who are not poor.E) None of the above
F) B) and D)

Question 18

Scenario 20-4
Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability:
Taxes owed = (1/5 of income)  - $15,000
-Refer to Scenario 20-4. This negative income tax would guarantee what minimum level of income to every family?

Accepted Answer

A)  $5,000
B)  $10,000
C)  $15,000
D)  $50,000E) A) and B)
F) A) and C)

Question 19

Susan won $2,000 at the blackjack tables on her birthday. Her winnings are an example of

Accepted Answer

A)  permanent income.
B)  life-cycle income.
C)  transitory income.
D)  an in-kind transfer.E) None of the above
F) A) and D)

Question 20

Table 20-13
Distribution of Income in Imagination 
-Refer to Table 20-13. The Human Development Report computes a measure of inequality by dividing the income of the richest 10% of the population by the income of the poorest 10%. What is the value for this measure of inequality in Imagination?

Accepted Answer

The answer of Table 20-13
Distribution of Income in Imagination 
-Refer...

Exam 20: Income Inequality and Poverty

Which of the following is not an example of a welfare program?

Correct Answer
verified

A utilitarian government will pursue policies that redistribute income from the rich to the poor. One problem with these policies is that

Correct Answer
verified

Because people can borrow when they are young, the life cycle theory would suggest that one's standard of living depends on

Correct Answer
verified

Correct Answer
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Correct Answer
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Binding minimum-wage laws

Correct Answer
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Table 20-13 Distribution of Income in Imagination -Refer to Table 20-13. If the poverty line in Imagination is $18,000, what is the poverty rate?

Correct Answer
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Table 20-13 Distribution of Income in Imagination -Refer to Table 20-13. The Human Development Report computes a measure of inequality by dividing the income of the richest 10% of the population by the income of the poorest 10%. What is the value for this measure of inequality in Imagination?

Correct Answer
verified

The poverty rate for female households with no spouse present is approximately

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 with one 35-year-old adult and one child?

Correct Answer
verified

Anti-poverty programs

Correct Answer
verified

The English philosophers Jeremy Bentham and John Stuart Mill founded the school of thought called

Correct Answer
verified

Saving and borrowing is indicative of a family that

Correct Answer
verified

Susan won $2,000 at the blackjack tables on her birthday. Her winnings are an example of

Correct Answer
verified

Figure 20-3 -Refer to Figure 20-3. In 1968, the percent of children under age 18 in poverty is

Correct Answer
verified

Scenario 20-4 Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability: Taxes owed = (1/5 of income) - $15,000 -Refer to Scenario 20-4. This negative income tax would guarantee what minimum level of income to every family?

Correct Answer
verified

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

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

A society consists of three individuals: Sam, Tristan, and Ulyana. In terms of income and utility, Sam is currently best-off, Tristan ranks in the middle, and Ulyana is worst-off. Which of the following statements is correct?

Correct Answer
verified

In the United States approximately 80 percent of millionaires did not inherit their wealth. This illustrates the

Correct Answer
verified

Exam 20: Income Inequality and Poverty

Which of the following is not an example of a welfare program?

Correct AnswerverifiedShow Answer

A utilitarian government will pursue policies that redistribute income from the rich to the poor. One problem with these policies is that

Correct AnswerverifiedShow Answer

Because people can borrow when they are young, the life cycle theory would suggest that one's standard of living depends on

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Binding minimum-wage laws

Correct AnswerverifiedShow Answer

Table 20-13 Distribution of Income in Imagination -Refer to Table 20-13. If the poverty line in Imagination is $18,000, what is the poverty rate?

Correct AnswerverifiedShow Answer

Table 20-13 Distribution of Income in Imagination -Refer to Table 20-13. The Human Development Report computes a measure of inequality by dividing the income of the richest 10% of the population by the income of the poorest 10%. What is the value for this measure of inequality in Imagination?

Correct AnswerverifiedShow Answer

The poverty rate for female households with no spouse present is approximately

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 with one 35-year-old adult and one child?

Correct AnswerverifiedShow Answer

Anti-poverty programs

Correct AnswerverifiedShow Answer

The English philosophers Jeremy Bentham and John Stuart Mill founded the school of thought called

Correct AnswerverifiedShow Answer

Saving and borrowing is indicative of a family that

Correct AnswerverifiedShow Answer

Susan won $2,000 at the blackjack tables on her birthday. Her winnings are an example of

Correct AnswerverifiedShow Answer

Figure 20-3 -Refer to Figure 20-3. In 1968, the percent of children under age 18 in poverty is

Correct AnswerverifiedShow Answer

Scenario 20-4 Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability: Taxes owed = (1/5 of income) - $15,000 -Refer to Scenario 20-4. This negative income tax would guarantee what minimum level of income to every family?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

A society consists of three individuals: Sam, Tristan, and Ulyana. In terms of income and utility, Sam is currently best-off, Tristan ranks in the middle, and Ulyana is worst-off. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

In the United States approximately 80 percent of millionaires did not inherit their wealth. This illustrates the

Correct AnswerverifiedShow Answer

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