Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements about the minimum wage is correct?

Accepted Answer

A)   An increase in the minimum wage enhances the well-being of all unskilled workers.
B)   An increase in the minimum wage has no effect on the well-being of middle-class families.
C)   Advocates of the minimum wage argue that the demand for labor is relatively inelastic.
D)   Critics of the minimum wage argue that it is an undesirable way of helping the poor because it is costly to the government.E) A) and C)
F) B) and C)

Question 3

Assume that the government proposes a negative income tax that calculates the taxes owed as follows: Taxes Owed = (1/3*Income) - 10,000.A family that earns an income of $60,000 will

Accepted Answer

A)   pay $10,000 in taxes.
B)   receive an income subsidy of $3,000.
C)   receive an income subsidy of $10,000.
D)   neither pay taxes nor receive an income subsidy.E) A) and D)
F) A) and C)

Question 4

Poverty is found to be correlated with

Accepted Answer

A)   age and race but not family composition.
B)   race only.
C)   race and family composition but not age.
D)   age,race,and family composition.E) All of the above
F) C) and D)

Question 5

Medicaid and food stamps are

Accepted Answer

A)   available only to the elderly.
B)   forms of in-kind assistance.
C)   forms of cash assistance.
D)   transfer payments.E) None of the above
F) A) and B)

Question 6

A common criticism of government programs that are designed to assist the poor is that

Accepted Answer

A)   those who receive assistance rarely meet the criterion for eligibility.
B)   the majority of those below the poverty line refuse to accept government assistance.
C)   they create incentives for people to become "needy."
D)   they typically account for a majority of annual government expenditures.E) B) and D)
F) B) and C)

Question 7

The economic life cycle describes how young people usually have higher savings rates than middle-aged people.

Accepted Answer

A) True 
 B)False

Question 8

Which political philosophy believes in balancing the gains from greater equality against the losses from distorted incentives?

Accepted Answer

A)   Utilitarianism.
B)   Liberalism.
C)   Libertarianism.
D)   Secularism.E) None of the above
F) All of the above

Question 9

In 2005,what percentage of U.S.families had income levels below $103,100?

Accepted Answer

A)   5 percent
B)   20 percent
C)   80 percent
D)   95 percentE) B) and D)
F) B) and C)

Question 10

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

Question 11

Whether or not policymakers should try to make our society more egalitarian is largely a matter of

Accepted Answer

A)   economic efficiency.
B)   political philosophy.
C)   egalitarian principles.
D)   enhanced opportunity.E) All of the above
F) B) and D)

Question 12

Which political philosophy believes that the government should equalize the incomes of all members of society?

Accepted Answer

A)   Utilitarianism.
B)   Liberalism.
C)   Libertarianism.
D)   None of the above is correct.E) C) and D)
F) A) and D)

Question 13

Suppose that young people often borrow and then repay the loans when they are older.These actions relate to which problem in measuring inequality?

Accepted Answer

A)   In-kind transfers.
B)   Economic life cycle.
C)   Negative income tax.
D)   Economic mobility.E) None of the above
F) C) and D)

Question 14

U.S.income data over the last seventy years suggests that the distribution of income

Accepted Answer

A)   has gradually become more equal over the entire time period.
B)   has gradually become less equal over the entire time period.
C)   gradually became less equal until about 1970,then became more equal from 1970 to 2005.
D)   gradually became more equal until about 1970,then became less equal from 1970 to 2005.E) B) and C)
F) A) and D)

Question 15

Which of the following statements illustrates diminishing marginal utility?

Accepted Answer

A)   An extra dollar of income to a poor person provides that person with more additional utility than does an extra dollar to a rich person.
B)   An extra dollar of income to a poor person provides that person with less additional utility than does an extra dollar to a rich person.
C)   An extra dollar of income to a poor person provides that person with the same additional utility as does an extra dollar to a rich person.
D)   An extra dollar of income to a poor person provides that person with the same total utility as does an extra dollar to a rich person.E) A) and B)
F) All of the above

Question 16

The calculation of the poverty line includes adjustments for

Accepted Answer

A)   energy costs.
B)   child care costs.
C)   the level of prices.
D)   the Earned Income Tax Credit.E) B) and D)
F) B) and C)

Question 17

The distribution of income for Abbyville is as follows:

Where would the government in Abbyville set the poverty line to generate a poverty rate of 12 percent?

Accepted Answer

A)   $15,000.
B)   $20,000.
C)   $25,000.
D)   $30,000.E) B) and C)
F) None of the above

Question 18

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) B) and C)

Question 19

If society chose to maximize average utility rather than minimum utility,

Accepted Answer

A)   society would achieve perfect income equality.
B)   society would achieve the maximin objective.
C)   its justice would be more utilitarian than Rawlsian.
D)   its justice would be more Rawlsian than utilitarian.E) A) and B)
F) A) and C)

Question 20

Which of the following is correct?

Accepted Answer

A)   Governments can never improve market outcomes.
B)   Governments can sometimes improve market outcomes.
C)   Governments can always improve market outcomes.
D)   Government can never make the income distribution more equal.E) All of the above
F) B) and C)

Exam 20: Income Inequality and Poverty

In 2005,what percentage of U.S.families had income levels below $103,100?

Correct AnswerverifiedShow Answer

U.S.income data over the last seventy years suggests that the distribution of income

Correct AnswerverifiedShow Answer

Suppose that young people often borrow and then repay the loans when they are older.These actions relate to which problem in measuring inequality?

Correct AnswerverifiedShow Answer

Which political philosophy believes that the government should equalize the incomes of all members of society?

Correct AnswerverifiedShow Answer

Medicaid and food stamps are

Correct AnswerverifiedShow Answer

The distribution of income for Abbyville is as follows: Where would the government in Abbyville set the poverty line to generate a poverty rate of 12 percent?

Correct AnswerverifiedShow Answer

The country that has the most income equality is

Correct AnswerverifiedShow Answer

Whether or not policymakers should try to make our society more egalitarian is largely a matter of

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

Which of the following statements illustrates diminishing marginal utility?

Correct AnswerverifiedShow Answer

The economic life cycle describes how young people usually have higher savings rates than middle-aged people.

Correct AnswerverifiedShow Answer

Assume that the government proposes a negative income tax that calculates the taxes owed as follows: Taxes Owed = (1/3*Income) - 10,000.A family that earns an income of $60,000 will

Correct AnswerverifiedShow Answer

If society chose to maximize average utility rather than minimum utility,

Correct AnswerverifiedShow Answer

A common criticism of government programs that are designed to assist the poor is that

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following statements about the minimum wage is correct?

Correct AnswerverifiedShow Answer

Poverty is found to be correlated with

Correct AnswerverifiedShow Answer

Which political philosophy believes in balancing the gains from greater equality against the losses from distorted incentives?

Correct AnswerverifiedShow Answer

The calculation of the poverty line includes adjustments for

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified