Question 1

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 2

Liberalism is founded on a premise that behind a "veil of ignorance,"

Accepted Answer

A)   justice cannot be agreed upon.
B)   everyone's income should be equal.
C)   everyone would agree to "just" rules to reallocate income.
D)   society should maximize the sum of individual utilities.E) B) and D)
F) A) and B)

Question 3

When we examine historical data on income inequality in the U.S.,we see that the distribution of income gradually became

Accepted Answer

A)   more equal between 1935 and 2008.
B)   more equal between 1935 and 1973, but that trend reversed itself between 1973 and 2008.
C)   more unequal between 1935 and 1973, but that trend reversed itself between 1973 and 2008.
D)   more unequal between 1935 and 2008.E) C) and D)
F) A) and B)

Question 4

Bill earns more than Donna.A legislator proposes taxing Bill to supplement Donna's income.A libertarian would view this proposal as

Accepted Answer

A)   a way to increase social justice.
B)   a way to enhance Donna's income in a socially responsible way.
C)   validation of the superiority of a libertarian maximin criterion over Rawlsian social justice.
D)   an inappropriate role for government, since government should not redistribute income.E) A) and B)
F) All of the above

Question 5

The United States has a more unequal income distribution than many other developed countries such as Japan and Canada.

Accepted Answer

A) True 
 B)False

Question 6

The United States has less income inequality than

Accepted Answer

A)   Japan.
B)   Canada.
C)   Germany.
D)   South Africa.E) B) and C)
F) A) and D)

Question 7

The typical economic life cycle illustrates how people tend to

Accepted Answer

A)   borrow more when they are younger and save more when they are middle-aged.
B)   earn their peak incomes immediately prior to the typical retirement age of 65.
C)   adjust their consumption based on changes in their transitory income.
D)   All of the above are correct.E) All of the above
F) A) and D)

Question 8

Which of the following does not explain why data on income distribution and the poverty rate give an incomplete picture of inequality?

Accepted Answer

A)   in-kind transfers
B)   economic life cycle
C)   transitory income
D)   All of the above contribute to an incomplete picture of inequality.E) B) and D)
F) C) and D)

Question 9

Which of the following is most likely to occur when the government enacts policies to make the distribution of income more equal?

Accepted Answer

A)   a more efficient allocation of resources
B)   a distortion of incentives
C)   unchanged behavior
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 10

In 2008,what percentage of U.S.families had income levels below $113,205?

Accepted Answer

A)   5 percent
B)   20 percent
C)   80 percent
D)   95 percentE) All of the above
F) B) and C)

Question 11

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) B) and C)

Question 12

Of the four countries below,the country that has the most income equality is

Accepted Answer

A)   Japan.
B)   Brazil.
C)   South Africa.
D)   the United States.E) A) and B)
F) A) and C)

Question 13

Figure 20-5
 
-Refer to Figure 20-5.An effective minimum wage would be set at a level

Accepted Answer

A)   above Wo, and employment would rise above Qo.
B)   above Wo, and employment would fall below Qo.
C)   below Wo, and employment would rise above Qo.
D)   below Wo, and employment would fall below Qo.E) A) and B)
F) All of the above

Question 14

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

Accepted Answer

A)   the earned income cycle.
B)   the substitution effect.
C)   the life cycle.
D)   the pattern of change.E) A) and C)
F) None of the above

Question 15

Suppose that Family A borrows money when its car breaks down and saves money when the wife receives a holiday bonus from her employer.Suppose that Family B borrows money to buy elaborate birthday presents for the children and spends the husband's holiday bonus on a vacation to Florida.Which of the following is correct?

Accepted Answer

A)   Both Family A's and Family B's spending habits suggest that they base their purchasing decisions on transitory income.
B)   Family A's spending habits suggest that it bases its purchasing decisions on transitory income rather than permanent income. Family B's spending habits suggest that it bases its purchasing decisions on permanent income rather than transitory income.
C)   Family A's spending habits suggest that it bases its purchasing decisions on permanent income rather than transitory income. Family B's spending habits suggest that it bases its purchasing decisions on transitory income rather than permanent income.
D)   Both Family A's and Family B's spending habits suggest that they base their purchasing decisions on permanent income.E) A) and B)
F) A) and C)

Question 16

The current measure of poverty,roughly three times the cost of providing an adequate diet,was established in

Accepted Answer

A)   1935.
B)   1964.
C)   1973.
D)   1996.E) A) and B)
F) None of the above

Question 17

Outline the possible work disincentives created by anti-poverty programs.Is there a way to solve this problem without causing other forms of inefficiency to arise? Explain your answer.

Accepted Answer

A high marginal tax rate exists on welfa...

Question 18

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) All of the above
F) B) and D)

Question 19

In-kind transfers are

Accepted Answer

A)   obtained only by those who have political connections.
B)   provided only by the U. S. government.
C)   non-monetary items given to the poor.
D)   obtained primarily through soup kitchens and private charities.E) A) and B)
F) A) and C)

Question 20

Suppose a society consists of only two people,John and Jane.A utilitarian would say that the proper role of government in this society is to

Accepted Answer

A)   equalize the incomes of John and Jane.
B)   equalize John's utility and Jane's utility.
C)   equalize John's marginal utility and Jane's marginal utility.
D)   maximize the sum of John's utility and Jane's utility.E) B) and D)
F) None of the above

Exam 20: Income Inequality and Poverty.

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

Correct Answer
verified

Liberalism is founded on a premise that behind a "veil of ignorance,"

Correct Answer
verified

In 2008,what percentage of U.S.families had income levels below $113,205?

Correct Answer
verified

When we examine historical data on income inequality in the U.S.,we see that the distribution of income gradually became

Correct Answer
verified

Suppose a society consists of only two people,John and Jane.A utilitarian would say that the proper role of government in this society is to

Correct Answer
verified

Correct Answer
verified

The current measure of poverty,roughly three times the cost of providing an adequate diet,was established in

Correct Answer
verified

Which of the following is most likely to occur when the government enacts policies to make the distribution of income more equal?

Correct Answer
verified

The typical economic life cycle illustrates how people tend to

Correct Answer
verified

Figure 20-5 -Refer to Figure 20-5.An effective minimum wage would be set at a level

Correct Answer
verified

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

Correct Answer
verified

Outline the possible work disincentives created by anti-poverty programs.Is there a way to solve this problem without causing other forms of inefficiency to arise? Explain your answer.

Correct Answer
verified
A high marginal tax rate exists on welfa...
View Answer

The United States has less income inequality than

Correct Answer
verified

Bill earns more than Donna.A legislator proposes taxing Bill to supplement Donna's income.A libertarian would view this proposal as

Correct Answer
verified

The United States has a more unequal income distribution than many other developed countries such as Japan and Canada.

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

In-kind transfers are

Correct Answer
verified

Of the four countries below,the country that has the most income equality is

Correct Answer
verified

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

Correct Answer
verified

Which of the following does not explain why data on income distribution and the poverty rate give an incomplete picture of inequality?

Correct Answer
verified

Exam 20: Income Inequality and Poverty.

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

Correct AnswerverifiedShow Answer

Liberalism is founded on a premise that behind a "veil of ignorance,"

Correct AnswerverifiedShow Answer

In 2008,what percentage of U.S.families had income levels below $113,205?

Correct AnswerverifiedShow Answer

When we examine historical data on income inequality in the U.S.,we see that the distribution of income gradually became

Correct AnswerverifiedShow Answer

Suppose a society consists of only two people,John and Jane.A utilitarian would say that the proper role of government in this society is to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The current measure of poverty,roughly three times the cost of providing an adequate diet,was established in

Correct AnswerverifiedShow Answer

Which of the following is most likely to occur when the government enacts policies to make the distribution of income more equal?

Correct AnswerverifiedShow Answer

The typical economic life cycle illustrates how people tend to

Correct AnswerverifiedShow Answer

Figure 20-5 -Refer to Figure 20-5.An effective minimum wage would be set at a level

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Outline the possible work disincentives created by anti-poverty programs.Is there a way to solve this problem without causing other forms of inefficiency to arise? Explain your answer.

Correct AnswerverifiedA high marginal tax rate exists on welfa...View AnswerShow Answer

The United States has less income inequality than

Correct AnswerverifiedShow Answer

Bill earns more than Donna.A legislator proposes taxing Bill to supplement Donna's income.A libertarian would view this proposal as

Correct AnswerverifiedShow Answer

The United States has a more unequal income distribution than many other developed countries such as Japan and Canada.

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

In-kind transfers are

Correct AnswerverifiedShow Answer

Of the four countries below,the country that has the most income equality is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following does not explain why data on income distribution and the poverty rate give an incomplete picture of inequality?

Correct AnswerverifiedShow Answer

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A high marginal tax rate exists on welfa...
View Answer

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