Question 1

Which of the following groups has the lowest poverty rate?

Accepted Answer

A)   blacks
B)   Asians
C)   children (under age 18) 
D)   female households, no spouse presentE) None of the above
F) A) and B)

Question 2

"Only individual members of society earn income, not society itself." This statement is most closely associated with the political philosophy of a

Accepted Answer

A)   utilitarian.
B)   liberal.
C)   libertarian.
D)   None of the above is correct.E) A) and B)
F) A) and D)

Question 3

A negative income tax system is designed to

Accepted Answer

A)   provide in-kind benefits to the poor.
B)   provide a minimum income to the poor.
C)   reduce taxes on the rich when their incomes surpass the maximum income tax bracket.
D)   subsidize food consumption in poor families.E) B) and C)
F) A) and D)

Question 4

Which of the following is not correct?

Accepted Answer

A)   Poverty is long-term problem for relatively few families.
B)   Measurements of income inequality usually do not include in-kind transfers.
C)   Measurements of income inequality use lifetime incomes rather than annual incomes.
D)   Measurements of income inequality would be more meaningful if they reflected permanent rather than current income.E) A) and D)
F) A) and C)

Question 5

One existing government program that works much like a negative income tax is Medicaid.

Accepted Answer

A) True 
 B)False

Question 6

Despite continued growth in average income since the early 1970s, the poverty rate has not declined below the level reached in 1973.

Accepted Answer

A) True 
 B)False

Question 7

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

Question 8

Figure 20-3 
-Refer to Figure 20-3. In 2011, the percent of elderly aged 65 and over in poverty is

Accepted Answer

A)   higher than both the percentage of adults aged 18 to 64 and the percentage of children under age 18 in poverty.
B)   higher than the percentage of adults aged 18 to 64 but is lower than the percentage of children under age 18 in poverty.
C)   lower than both the percentage of adults aged 18 to 64 and the percentage of children under age 18 in poverty.
D)   lower than the percentage of children under age 18 but is equal to the percentage of adults aged 18 to 64 in poverty.E) A) and B)
F) C) and D)

Question 9

Which of the following is not correct?

Accepted Answer

A)   Critics argue that minimum-wage laws hurt the very people they are intended to help.
B)   Minimum-wage laws may increase unemployment among the groups of workers affected by the minimum wage.
C)   If the demand for unskilled labor is relatively inelastic, the higher wage will produce more unemployment than if the demand for unskilled labor is relatively elastic.
D)   Minimum-wage laws may benefit teenagers from middle-class families, so the policy is not a precise way to help the poor.E) A) and D)
F) None of the above

Question 10

Which of the three political philosophies discussed in the textbook, if any, think the government should not take from some individuals and give to others to achieve any particular distribution of income?

Accepted Answer

The answer of Which of the three political philosophies discussed...

Question 11

What is one argument made by proponents of in-kind transfers over cash payments to the needy?

Accepted Answer

In-kind payments ens...

Question 12

Table 20-6 
-Refer to Table 20-6. In both 2011 and 2012, approximately 25% of the population earned less than

Accepted Answer

A)   $15,000.
B)   $25,000.
C)   $50,000.
D)   $100,000.E) None of the above
F) B) and C)

Question 13

The Hicks family owns a blueberry farm in Maine. The Ward family owns a blueberry farm in Massachusetts. A drought in Massachusetts destroys half of the Ward family's harvest for one year. For the Ward family, their

Accepted Answer

A)   transitory income for the year of the drought likely exceeds their permanent income.
B)   permanent income likely exceeds their transitory income for the year of the drought.
C)   transitory income likely will be affected but the permanent income of the Hicks family will increase.
D)   permanent income likely will be affected but the permanent income of the Hicks family will not be affected.E) None of the above
F) A) and B)

Question 14

Liberalism aims to raise the welfare of the worst-off person in society. This rule is called the

Accepted Answer

A)   minimax regret criterion.
B)   conservative approach.
C)   Nozick criterion.
D)   maximin criterion.E) None of the above
F) All of the above

Question 15

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) A) and B)

Question 16

The study by economists Cox and Alm found

Accepted Answer

A)   the gap between rich and poor shrinks greatly if using after-tax income compared with pre-tax income.
B)   the gap between rich and poor shrinks slightly if using after-tax income compared with pre-tax income.
C)   the gap between rich and poor widens slightly if using after-tax income compared with pre-tax income.
D)   the gap between rich and poor widens greatly if using after-tax income compared with pre-tax income.E) None of the above
F) All of the above

Question 17

The distribution of income for Abbyville is as follows: Number of Families Income   300 less than $15,000
500 between $15,000 and $20,000
900 between $20,000 and $25,000
600 between $25,000 and $30,000
200 over $30,000  If the poverty rate in Abbyville is 12 percent, what is the poverty line in Abbyville?

Accepted Answer

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

Question 18

The poverty line in the country of Abbyville is $15,000. The distribution of income for Abbyville is as follows: Number of Families Income   300 less than $15,000
500 between $15,000 and $20,000
900 between $20,000 and $25,000
600 between $25,000 and $30,000
200 over $30,000  The poverty rate in Abbyville is

Accepted Answer

A)   12 percent.
B)   32 percent.
C)   50 percent.
D)   68 percent.E) B) and D)
F) A) and C)

Question 19

Assume that the government proposes a negative income tax that calculates the taxes owed as follows: taxes owed equal 30% of income less $12,000. A family that earns an income of $40,000 will

Accepted Answer

A)   neither pay taxes nor receive an income subsidy.
B)   receive an income subsidy of $3,600.
C)   pay $3,600 in taxes.
D)   pay $12,000 in taxes.E) C) and D)
F) A) and B)

Question 20

Comparing the US to other countries ranked by inequality,

Accepted Answer

A)   the US has a less equal distribution of income than some countries, but a more equal distribution of income than others.
B)   the US has one of the most equal distributions of income.
C)   the US has one of the least equal distributions of income.
D)   the US has a more equal distribution of income than other economically advanced countries such as Japan, Germany, and France.E) None of the above
F) All of the above

Exam 20: Income Inequality and Poverty

Liberalism aims to raise the welfare of the worst-off person in society. This rule is called the

Correct Answer
verified

Correct Answer
verified

Table 20-6 -Refer to Table 20-6. In both 2011 and 2012, approximately 25% of the population earned less than

Correct Answer
verified

The Hicks family owns a blueberry farm in Maine. The Ward family owns a blueberry farm in Massachusetts. A drought in Massachusetts destroys half of the Ward family's harvest for one year. For the Ward family, their

Correct Answer
verified

Correct Answer
verified

Assume that the government proposes a negative income tax that calculates the taxes owed as follows: taxes owed equal 30% of income less $12,000. A family that earns an income of $40,000 will

Correct Answer
verified

Which of the three political philosophies discussed in the textbook, if any, think the government should not take from some individuals and give to others to achieve any particular distribution of income?

Correct Answer
verified

One existing government program that works much like a negative income tax is Medicaid.

Correct Answer
verified

"Only individual members of society earn income, not society itself." This statement is most closely associated with the political philosophy of a

Correct Answer
verified

Poverty is found to be correlated with

Correct Answer
verified

Figure 20-3 -Refer to Figure 20-3. In 2011, the percent of elderly aged 65 and over in poverty is

Correct Answer
verified

Despite continued growth in average income since the early 1970s, the poverty rate has not declined below the level reached in 1973.

Correct Answer
verified

Correct Answer
verified

Which of the following is not correct?

Correct Answer
verified

Comparing the US to other countries ranked by inequality,

Correct Answer
verified

Which of the following is not correct?

Correct Answer
verified

What is one argument made by proponents of in-kind transfers over cash payments to the needy?

Correct Answer
verified
In-kind payments ens...
View Answer

A negative income tax system is designed to

Correct Answer
verified

Which of the following groups has the lowest poverty rate?

Correct Answer
verified

The study by economists Cox and Alm found

Correct Answer
verified

Exam 20: Income Inequality and Poverty

Liberalism aims to raise the welfare of the worst-off person in society. This rule is called the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 20-6 -Refer to Table 20-6. In both 2011 and 2012, approximately 25% of the population earned less than

Correct AnswerverifiedShow Answer

The Hicks family owns a blueberry farm in Maine. The Ward family owns a blueberry farm in Massachusetts. A drought in Massachusetts destroys half of the Ward family's harvest for one year. For the Ward family, their

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Assume that the government proposes a negative income tax that calculates the taxes owed as follows: taxes owed equal 30% of income less $12,000. A family that earns an income of $40,000 will

Correct AnswerverifiedShow Answer

Which of the three political philosophies discussed in the textbook, if any, think the government should not take from some individuals and give to others to achieve any particular distribution of income?

Correct AnswerverifiedShow Answer

One existing government program that works much like a negative income tax is Medicaid.

Correct AnswerverifiedShow Answer

"Only individual members of society earn income, not society itself." This statement is most closely associated with the political philosophy of a

Correct AnswerverifiedShow Answer

Poverty is found to be correlated with

Correct AnswerverifiedShow Answer

Figure 20-3 -Refer to Figure 20-3. In 2011, the percent of elderly aged 65 and over in poverty is

Correct AnswerverifiedShow Answer

Despite continued growth in average income since the early 1970s, the poverty rate has not declined below the level reached in 1973.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

Comparing the US to other countries ranked by inequality,

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

What is one argument made by proponents of in-kind transfers over cash payments to the needy?

Correct AnswerverifiedIn-kind payments ens...View AnswerShow Answer

A negative income tax system is designed to

Correct AnswerverifiedShow Answer

Which of the following groups has the lowest poverty rate?

Correct AnswerverifiedShow Answer

The study by economists Cox and Alm found

Correct AnswerverifiedShow Answer

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In-kind payments ens...
View Answer

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Correct Answer
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Correct Answer
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