Question 1

Table 20-13
The following table shows the distribution of income in Widgetapolis.  ​
-Refer to Table 20-13. If the poverty line were $45,141, what would be the poverty rate?

Accepted Answer

A)  less than 20%
B)  between 20% and 40%
C)  between 40% and 60%
D)  between 60% and 80%E) C) and D)
F) B) and D)

Question 2

If a government could successfully achieve the maximin criterion, each member of society would have an equal income.

Accepted Answer

A) True 
 B)False

Question 3

Since 1959 when the official data on the poverty rate began, the poverty rate was at its highest in

Accepted Answer

A)  1959.
B)  1968.
C)  1977.
D)  1986.E) All of the above
F) A) and B)

Question 4

Figure 20-5 o, it is likely to A) increase employment to a level above Qo. B) reduce employment to a level below Qo. C) provide more income to the working poor than they collectively received before the minimum wage was set. D) have no effect on employment." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 20-5. If the government imposes a minimum wage above Wo, it is likely to

Accepted Answer

A)  increase employment to a level above Qo.
B)  reduce employment to a level below Qo.
C)  provide more income to the working poor than they collectively received before the minimum wage was set.
D)  have no effect on employment.E) A) and D)
F) A) and B)

Question 5

Figure 20-4 
-Refer to Figure 20-4. The ratio of female-to-male earnings has increased steadily from about 1980 to 2008 because the earnings of men

Accepted Answer

A)  increased steadily but by approximately half of the increase in the earnings of women.
B)  decreased while the earnings of women increased.
C)  stayed relatively constant while the earnings of women increased.
D)  decreased by substantially more than the decrease in the earnings of women.E) A) and B)
F) All of the above

Question 6

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

Question 7

When the government enacts policies to make the distribution of income more equitable, it distorts incentives, alters behavior, and makes the allocation of resources less efficient.

Accepted Answer

A) True 
 B)False

Question 8

Who said "The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of socialism is the equal sharing of miseries"?

Accepted Answer

The answer of Who said "The inherent vice of capitalism...

Question 9

A utilitarian government has to balance the gains from greater income equality against the losses from distorted work incentives. To maximize total utility, therefore, the government

Accepted Answer

A)  would never tax labor income.
B)  must always achieve a fully egalitarian society.
C)  enacts policies that only benefit the middle class.
D)  stops short of a fully egalitarian society.E) A) and C)
F) C) and D)

Question 10

The poverty line in the country of Dismal is $20,000. The distribution of income for Dismal is as follows:  The poverty rate in Dismal is

Accepted Answer

A)  16.7 percent.
B)  33.3 percent.
C)  50 percent.
D)  83.3 percent.E) B) and C)
F) A) and B)

Question 11

Economists Cox and Alm compared the gap between rich and poor and found that the richest 20% was about 15 times better off than the poorest 20% when they compared what data?

Accepted Answer

The answer of Economists Cox and Alm compared the gap...

Question 12

The distribution of income for Danville is as follows:  If the poverty rate in Danville is 33.3 percent, what is the poverty line in Danville?

Accepted Answer

A)  $15,000.
B)  $20,000.
C)  $25,000.
D)  $30,000.E) C) and D)
F) A) and B)

Question 13

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. A family earning $50,000 before taxes would have how much after-tax income?

Accepted Answer

A)  -$5,000
B)  $40,000
C)  $45,000
D)  $55,000E) C) and D)
F) B) and D)

Question 14

The United States has more income inequality than Brazil and South Africa.

Accepted Answer

A) True 
 B)False

Question 15

The goal of liberalism is to

Accepted Answer

A)  redistribute income based on the assumption of diminishing marginal utility.
B)  redistribute income in order to improve the well-being of the worst-off person in society.
C)  punish crimes and enforce voluntary agreements but not to redistribute income.
D)  measure happiness and satisfaction.E) A) and B)
F) None of the above

Question 16

When the government taxes income as part of a redistribution program,

Accepted Answer

A)  the poor pay higher taxes.
B)  the rich always benefit more than the poor.
C)  the poor are encouraged to work.
D)  incentives to earn income are diminished.E) A) and C)
F) None of the above

Question 17

If a father earns 20% above his generation's average income, his son will most likely earn what percent above his generation's average income? What does this statistic indicate?

Accepted Answer

8% Persistence of economic suc...

Question 18

When designing public policies, which income group would philosopher John Rawls argue needs the most attention?

Accepted Answer

A)  Individuals located in the bottom fifth of the income distribution.
B)  Individuals located at the average income level.
C)  Individuals located in the top fifth of the income distribution.
D)  Individuals located in the top five percent of the income distribution.E) A) and C)
F) B) and D)

Question 19

The elderly represent the largest demographic group in poverty.

Accepted Answer

A) True 
 B)False

Question 20

Which group would be the least upset by wide variation in the income distribution?

Accepted Answer

A)  utilitarians
B)  liberals
C)  libertarians
D)  Each group would be equally upset.E) A) and D)
F) None of the above

Exam 20: Income Inequality and Poverty

The poverty line in the country of Dismal is $20,000. The distribution of income for Dismal is as follows: The poverty rate in Dismal is

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Figure 20-4 -Refer to Figure 20-4. The ratio of female-to-male earnings has increased steadily from about 1980 to 2008 because the earnings of men

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The United States has more income inequality than Brazil and South Africa.

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Since 1959 when the official data on the poverty rate began, the poverty rate was at its highest in

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When the government taxes income as part of a redistribution program,

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The elderly represent the largest demographic group in poverty.

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The poverty line is

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A utilitarian government has to balance the gains from greater income equality against the losses from distorted work incentives. To maximize total utility, therefore, the government

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If a government could successfully achieve the maximin criterion, each member of society would have an equal income.

Correct AnswerverifiedShow Answer

The goal of liberalism is to

Correct AnswerverifiedShow Answer

The distribution of income for Danville is as follows: If the poverty rate in Danville is 33.3 percent, what is the poverty line in Danville?

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Economists Cox and Alm compared the gap between rich and poor and found that the richest 20% was about 15 times better off than the poorest 20% when they compared what data?

Correct AnswerverifiedShow Answer

When the government enacts policies to make the distribution of income more equitable, it distorts incentives, alters behavior, and makes the allocation of resources less efficient.

Correct AnswerverifiedShow Answer

Figure 20-5 -Refer to Figure 20-5. If the government imposes a minimum wage above Wo, it is likely to

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Table 20-13 The following table shows the distribution of income in Widgetapolis. ​ -Refer to Table 20-13. If the poverty line were $45,141, what would be the poverty rate?

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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. A family earning $50,000 before taxes would have how much after-tax income?

Correct AnswerverifiedShow Answer

Who said "The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of socialism is the equal sharing of miseries"?

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If a father earns 20% above his generation's average income, his son will most likely earn what percent above his generation's average income? What does this statistic indicate?

Correct Answerverified8% Persistence of economic suc...View AnswerShow Answer

Which group would be the least upset by wide variation in the income distribution?

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When designing public policies, which income group would philosopher John Rawls argue needs the most attention?

Correct AnswerverifiedShow Answer

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Figure 20-5 -Refer to Figure 20-5. If the government imposes a minimum wage above W_o, it is likely to

Correct Answer
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Table 20-13 The following table shows the distribution of income in Widgetapolis. -Refer to Table 20-13. If the poverty line were $45,141, what would be the poverty rate?

Correct Answer
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8% Persistence of economic suc...
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