Question 1

What measure does the federal government use when setting the official poverty line in the US?

Accepted Answer

three times the cost...

Question 2

Which of the following statements is characteristic of utilitarianism?

Accepted Answer

A)  An extra dollar of income provides higher marginal utility to a poor person than to a rich person.
B)  Social policies should be created behind a "veil of ignorance."
C)  Society should strive to maximize the utility of its wealthiest member.
D)  Equality of opportunity is more important than equality of incomes.E) A) and B)
F) A) and C)

Question 3

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) All of the above

Question 4

"The government should choose policies to maximize the total utility of society." This statement is most closely associated with which political philosophy?

Accepted Answer

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

Question 5

Which of the following does not explain the rise in income inequality in the United States from 1970 to 2011?

Accepted Answer

A)  Changes in technology.
B)  An increase in minimum wages.
C)  A reduction in the demand for unskilled labor.
D)  Increased international trade with low-wage countries.E) B) and C)
F) A) and D)

Question 6

In the United States, a typical worker's income peaks around age

Accepted Answer

A)  70.
B)  60.
C)  50.
D)  40.E) All of the above
F) B) and C)

Question 7

Supporters of raising the minimum wage argue that minimum-wage laws are

Accepted Answer

A)  a tax-free way to help the working poor. Businesses bear the burden of paying higher wages, not the government.
B)  better than the Earned Income Tax Credit (EIT
C)   in targeting the working poor. The EITC may benefit teenagers from middle-class families who work summer jobs at the minimum wage.
C)  better than in-kind transfers such as food stamps in providing food rather than unhealthy items such as drugs or alcohol.
D)  a way to increase employment of those likely to earn the minimum wage.E) All of the above
F) B) and D)

Question 8

Explain what information is contained in the poverty rate statistic. Are there problems in using an absolute scale to measure poverty? If so, explain them.

Accepted Answer

The poverty rate is the percentage of th...

Question 9

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 D)
F) None of the above

Question 10

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) C) and D)
F) A) and B)

Question 11

The regular pattern of income variation over a person's life is called the

Accepted Answer

A)  earned income cycle.
B)  substitution effect.
C)  life cycle.
D)  pattern of change.E) A) and B)
F) A) and C)

Question 12

"An extra dollar of income gives more additional satisfaction to a poor person than to a rich person." This is an important assumption of which political philosophy?

Accepted Answer

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

Question 13

Winston Churchill once said

Accepted Answer

A)  "The inherent virtue of capitalism is the unequal sharing of blessings. The inherent virtue of socialism is the equal sharing of miseries."
B)  "The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of socialism is the equal sharing of miseries."
C)  "The inherent vice of capitalism is the unequal sharing of blessings. The inherent vice of socialism is the equal sharing of miseries."
D)  "The inherent virtue of capitalism is the unequal sharing of blessings. The inherent vice of socialism is the equal sharing of miseries."E) B) and C)
F) B) and D)

Question 14

A disadvantage associated with an Earned Income Tax Credit (EITC)  program to reduce poverty is that it

Accepted Answer

A)  encourages illegitimate births because single women with children receive higher payments.
B)  rewards laziness because it provides payments to those with low incomes regardless of their work effort.
C)  does not help the poor who are unemployed.
D)  creates unemployment by increasing the wage paid to unskilled workers above the equilibrium wage.E) A) and B)
F) None of the above

Question 15

Economists who study economic mobility have found that, if a father earns 20 percent above his generation's average income, his son will most likely earn

Accepted Answer

A)  an income equal to his generation's average income.
B)  8 percent above his generation's average income.
C)  5 percent below his generation's average income.
D)  3 percent above his generation's average income.E) A) and B)
F) B) and C)

Question 16

For a typical worker, her income will be lower when she is younger, peak around age 50, and decrease drastically when she retires. This pattern of changes in income for a typical worker is called

Accepted Answer

A)  the life cycle.
B)  permanent income.
C)  transitory income.
D)  in-kind transfers.E) B) and D)
F) All of the above

Question 17

Liberals believe

Accepted Answer

A)  that the government should choose just policies as evaluated by an impartial observer behind a "veil of ignorance."
B)  in the assumption of diminishing marginal utility.
C)  that everyone in society should have equal utility.
D)  that the government should not redistribute income.E) A) and C)
F) All of the above

Question 18

Which of the following programs to alleviate poverty would be most favored by philosopher Robert Nozick?

Accepted Answer

A)  a negative income tax
B)  an Earned Income Tax Credit (EIT
C)  
C)  an in-kind transfer program
D)  None of the programs would be favored by Nozick.E) None of the above
F) All of the above

Question 19

Many Democrats support raising the U.S. minimum wage. Critics of raising the minimum wage argue that minimum-wage laws are

Accepted Answer

A)  too expensive for local governments to fund.
B)  too expensive for local governments to administer.
C)  imprecise in their ability to help the working poor.
D)  easy for businesses to pay.E) A) and D)
F) A) and C)

Question 20

In-kind transfers

Accepted Answer

A)  are cash payments given to the poor from the government.
B)  are available to citizens of all income levels, but usually only sought by the poor.
C)  are non-monetary items given to the poor.
D)  include food stamps, but not housing vouchers or medical services.E) A) and D)
F) C) and D)

Exam 20: Income Inequality and Poverty

Which of the following statements is characteristic of utilitarianism?

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Which of the following does not explain the rise in income inequality in the United States from 1970 to 2011?

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In the United States, a typical worker's income peaks around age

Correct AnswerverifiedShow Answer

Since about 1970 in the U.S.,

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In-kind transfers

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The regular pattern of income variation over a person's life is called the

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Economists who study economic mobility have found that, if a father earns 20 percent above his generation's average income, his son will most likely earn

Correct AnswerverifiedShow Answer

Liberals believe

Correct AnswerverifiedShow Answer

Explain what information is contained in the poverty rate statistic. Are there problems in using an absolute scale to measure poverty? If so, explain them.

Correct AnswerverifiedThe poverty rate is the percentage of th...View AnswerShow Answer

What measure does the federal government use when setting the official poverty line in the US?

Correct Answerverifiedthree times the cost...View AnswerShow Answer

"An extra dollar of income gives more additional satisfaction to a poor person than to a rich person." This is an important assumption of which political philosophy?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Many Democrats support raising the U.S. minimum wage. Critics of raising the minimum wage argue that minimum-wage laws are

Correct AnswerverifiedShow Answer

Which of the following programs to alleviate poverty would be most favored by philosopher Robert Nozick?

Correct AnswerverifiedShow Answer

A disadvantage associated with an Earned Income Tax Credit (EITC) program to reduce poverty is that it

Correct AnswerverifiedShow Answer

Winston Churchill once said

Correct AnswerverifiedShow Answer

"The government should choose policies to maximize the total utility of society." This statement is most closely associated with which political philosophy?

Correct AnswerverifiedShow Answer

Supporters of raising the minimum wage argue that minimum-wage laws are

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

For a typical worker, her income will be lower when she is younger, peak around age 50, and decrease drastically when she retires. This pattern of changes in income for a typical worker is called

Correct AnswerverifiedShow Answer

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The poverty rate is the percentage of th...
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three times the cost...
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