Question 1

In the Temporary Assistance for Needy Families program, most families

Accepted Answer

A)  must have both parents in the home to qualify.
B)  are female head-of-household families in which the father is absent.
C)  have adult children with disabilities living at home.
D)  are ineligible to receive assistance from other support programs.E) A) and B)
F) A) and C)

Question 2

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) None of the above
F) All of the above

Question 3

In the United States, labor earnings are about what percent of total income?

Accepted Answer

A)  75 percent
B)  70 percent
C)  67 percent
D)  50 percentE) A) and C)
F) A) and D)

Question 4

Assume that the government proposes a negative income tax that calculates taxes owed by the formula, Taxes Owed = (a  Income) - 
a.What is the value for "a"?
b.What is the value for "b"?
b. A family with an income of $40,000 pays $5,000 in taxes, and a family with an income of $12,000 receives an income subsidy of $2,000.
c.What is the tax liability of a family with an income of $50,000?
d.At what level of income will a family neither pay taxes, nor receive an income subsidy?

Accepted Answer

a.0.25 or ...

Question 5

The goal of utilitarians is to

Accepted Answer

A)  apply the logic of individual decision making to questions concerning morality and public policy.
B)  measure happiness and satisfaction.
C)  redistribute income based on the assumption of increasing marginal utility.
D)  All of the above are correct.E) None of the above
F) A) and B)

Question 6

Since about 1970 in the U.S.,

Accepted Answer

A)  decreases in the wages of unskilled workers, relative to skilled workers, have led to increased inequality in family incomes.
B)  increases in the wages of unskilled workers, relative to skilled workers, have led to increased equality in family incomes.
C)  inequality in family incomes has increased, despite increases in the wages of unskilled workers relative to skilled workers.
D)  inequality in family incomes has decreased, despite increases in the wages of skilled workers relative to unskilled workers.E) None of the above
F) A) and D)

Question 7

Table 20-4  Source: U.S. Bureau of Census
-Refer to Table 20-4. In 2011, the top fifth of families have

Accepted Answer

A)  almost 13 times as much income as the bottom fifth of families.
B)  28.2% more income than the bottom fifth of families.
C)  50.3% more income than the bottom fifth of families.
D)  45.1% more income than the bottom fifth of families.E) B) and D)
F) B) and C)

Question 8

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) None of the above

Question 9

Explain how a "leaky bucket" can be used to illustrate the utilitarian argument that governments should not attempt to completely equalize individual incomes.

Accepted Answer

Utilitarians reject complete equalizatio...

Question 10

The Smith family owns an apple orchard in Illinois. The Jones family owns an apple orchard in Wisconsin. A late frost destroys half of the Smith family's harvest for one year. For the Jones family, their

Accepted Answer

A)  transitory income for the year of the frost likely exceeds their permanent income.
B)  permanent income likely exceeds their transitory income for the year of the frost.
C)  permanent income will be more affected by the frost than their transitory income.
D)  Both a and c are correct.E) B) and D)
F) None of the above

Question 11

The poverty line is an absolute standard and is based on the cost of providing an adequate diet.

Accepted Answer

A) True 
 B)False

Question 12

People have their highest saving rates when they are

Accepted Answer

A)  retired.
B)  middle-aged.
C)  married with young children.
D)  young and single.E) A) and C)
F) A) and B)

Question 13

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 14

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 six with three children?

Accepted Answer

A)  $29,494
B)  $31,005
C)  $32,181
D)  $26,844E) A) and B)
F) B) and C)

Question 15

Which of the following is not a finding of Cox and Alm regarding the gap between rich and poor?

Accepted Answer

A)  The gap shrinks if taxes are taken into account.
B)  The gap shrinks if consumption, rather than income, is compared.
C)  The gap shrinks if the number of people in the household is taken into account.
D)  The gap shrinks if the state of residence is taken into account.E) B) and D)
F) A) and B)

Question 16

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. A family earning $40,000 before taxes will owe tax.​

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements is not correct?

Accepted Answer

A)  The percentage of the population that suffers from long-term poverty is far smaller than the percentage of the population that suffers from short-term poverty because there is a high level of economic mobility in the United States.
B)  Permanent income is a better measure of a family's ability to buy the necessities of life than is transitory income.
C)  The economic life cycle theory explains why gifts of goods and services reduce poverty for the very young and the very old.
D)  Because people can borrow and save to smooth out changes in income, their standard of living in any one year depends more on lifetime income than on a particular year's income.E) All of the above
F) A) and D)

Question 18

The concept of diminishing marginal utility is embedded in the utilitarian rationale for

Accepted Answer

A)  trickle-down effects.
B)  enhancing market efficiency.
C)  redistributing income.
D)  maintaining the status quo income distribution.E) All of the above
F) B) and C)

Exam 20: Income Inequality and Poverty

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?

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

Correct Answer
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The poverty line is an absolute standard and is based on the cost of providing an adequate diet.

Correct Answer
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Since about 1970 in the U.S.,

Correct Answer
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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. A family earning $40,000 before taxes will owe tax.

Correct Answer
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In the United States, labor earnings are about what percent of total income?

Correct Answer
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Explain how a "leaky bucket" can be used to illustrate the utilitarian argument that governments should not attempt to completely equalize individual incomes.

Correct Answer
verified
Utilitarians reject complete equalizatio...
View 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 six with three children?

Correct Answer
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People have their highest saving rates when they are

Correct Answer
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Which of the following statements is not correct?

Correct Answer
verified

Correct Answer
verified
a.0.25 or ...
View Answer

The goal of utilitarians is to

Correct Answer
verified

The concept of diminishing marginal utility is embedded in the utilitarian rationale for

Correct Answer
verified

The concept of utility is fundamental to utilitarianism and describes the

Correct Answer
verified

Which of the following is not a finding of Cox and Alm regarding the gap between rich and poor?

Correct Answer
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In the Temporary Assistance for Needy Families program, most families

Correct Answer
verified

Table 20-4 Source: U.S. Bureau of Census -Refer to Table 20-4. In 2011, the top fifth of families have

Correct Answer
verified

The Smith family owns an apple orchard in Illinois. The Jones family owns an apple orchard in Wisconsin. A late frost destroys half of the Smith family's harvest for one year. For the Jones family, their

Correct Answer
verified

Exam 20: Income Inequality and Poverty

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?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The poverty line is an absolute standard and is based on the cost of providing an adequate diet.

Correct AnswerverifiedShow Answer

Since about 1970 in the U.S.,

Correct AnswerverifiedShow Answer

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. A family earning $40,000 before taxes will owe tax.​

Correct AnswerverifiedShow Answer

In the United States, labor earnings are about what percent of total income?

Correct AnswerverifiedShow Answer

Explain how a "leaky bucket" can be used to illustrate the utilitarian argument that governments should not attempt to completely equalize individual incomes.

Correct AnswerverifiedUtilitarians reject complete equalizatio...View AnswerShow 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 six with three children?

Correct AnswerverifiedShow Answer

People have their highest saving rates when they are

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

Correct Answerverifieda.0.25 or ...View AnswerShow Answer

The goal of utilitarians is to

Correct AnswerverifiedShow Answer

The concept of diminishing marginal utility is embedded in the utilitarian rationale for

Correct AnswerverifiedShow Answer

The concept of utility is fundamental to utilitarianism and describes the

Correct AnswerverifiedShow Answer

Which of the following is not a finding of Cox and Alm regarding the gap between rich and poor?

Correct AnswerverifiedShow Answer

In the Temporary Assistance for Needy Families program, most families

Correct AnswerverifiedShow Answer

Table 20-4 Source: U.S. Bureau of Census -Refer to Table 20-4. In 2011, the top fifth of families have

Correct AnswerverifiedShow Answer

The Smith family owns an apple orchard in Illinois. The Jones family owns an apple orchard in Wisconsin. A late frost destroys half of the Smith family's harvest for one year. For the Jones family, their

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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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. A family earning $40,000 before taxes will owe tax.

Correct Answer
verified

Correct Answer
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Correct Answer
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Utilitarians reject complete equalizatio...
View Answer

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
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a.0.25 or ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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