Question 1

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) A) and B)

Question 2

Table 20-14
James, Luke, Peter, Micah, and Sarah are the only five inhabits of Marketsville. The following table shows their income.  ​
​
-Refer to Table 20-14. According to the table, what percentage of individuals in Marketsville have an income above $90,000?

Accepted Answer

A)  40 percent.
B)  60 percent.
C)  80 percent.
D)  100 percent.E) None of the above
F) A) and B)

Question 3

Of the following groups, which group is most likely to live in poverty - children, elderly, married-couple families, female household with no spouse present?

Accepted Answer

female hou...

Question 4

The poverty line in the country of Inequalia is $10,000. The distribution of income for Inequalia is as follows:  The poverty rate in Inequalia is

Accepted Answer

A)  11.1 percent.
B)  16.7 percent.
C)  27.8 percent.
D)  55.5 percent.E) B) and C)
F) None of the above

Question 5

The poverty line in the country of Inequalia is $7,800. The distribution of income for Inequalia is as follows:  The poverty rate in Inequalia is

Accepted Answer

A)  7.8 percent.
B)  between 10 percent and 25 percent.
C)  between 25 percent and 50 percent.
D)  39 percent.E) All of the above
F) None of the above

Question 6

Ms. Spring currently earns $100,000 a year, while her junior partner, Mr. Fall, earns $55,000 a year. From the perspective of a utilitarian, if both of their incomes are subject to diminishing marginal utility, taking a dollar from Ms. Spring and giving it to Mr. Fall will

Accepted Answer

A)  increase society's total utility.
B)  lower Ms. Spring's marginal utility of income.
C)  increase Mr. Fall's marginal utility of income.
D)  lower society's total utility.E) None of the above
F) A) and C)

Question 7

The poverty line is set by the government so that 10 percent of all families fall below that line and are thereby classified as "poor."

Accepted Answer

A) True 
 B)False

Question 8

There is very little economic mobility in the United States, which means that once a family is poor, it is very likely to remain poor for at least a decade.

Accepted Answer

A) True 
 B)False

Question 9

If income were equally distributed among households,

Accepted Answer

A)  each household's relative share of income would increase.
B)  each household's relative share of income would decrease.
C)  the top fifth of households would have 50 percent of the income.
D)  50 percent of the households would receive exactly 50 percent of the income.E) A) and C)
F) C) and D)

Question 10

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

Question 11

The United States has less income inequality than

Accepted Answer

A)  Ethiopia.
B)  United Kingdom.
C)  Vietnam.
D)  Mexico.E) B) and C)
F) B) and D)

Question 12

Which philosopher claimed that the government should aim to maximize the well-being of the worst-off person in society?

Accepted Answer

The answer of Which philosopher claimed that the government should...

Question 13

The United States has greater income disparity than

Accepted Answer

A)  Japan.
B)  India.
C)  South Africa.
D)  Both a and b are correct.E) A) and D)
F) A) and C)

Question 14

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 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 D)
F) None of the above

Question 16

Which of the following is not a characteristic of the Earned Income Tax Credit (EITC) ?

Accepted Answer

A)  It does not discourage recipients from working.
B)  It is less distortionary than other anti-poverty programs.
C)  It helps the disabled who cannot work.
D)  It applies only to the working poor.E) A) and B)
F) C) and D)

Question 17

A society consists of three individuals: Sam, Tristan, and Ulyana. In terms of income and utility, Sam is currently best-off, Tristan ranks in the middle, and Ulyana is worst-off. Which of the following statements is correct?

Accepted Answer

A)  Utilitarianism suggests that government policies should strive to maximize Ulyana's utility.
B)  Liberalism suggests that government policies should strive to increase Ulyana's utility.
C)  Libertarianism suggests that government policies should strive to improve Tristan's utility at the cost of Sam's utility.
D)  Libertarianism suggests that government policies should strive to make Sam, Tristan, and Ulyana equally well off.E) A) and C)
F) B) and C)

Question 18

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

Question 19

The only qualification to receive government assistance under a negative income tax is

Accepted Answer

A)  pre-school children.
B)  to be enrolled in job training.
C)  a working head-of-household.
D)  a low income.E) A) and B)
F) None of the above

Question 20

The U.S. welfare system was revised by a 1996 law that

Accepted Answer

A)  consolidated all of the previous assistance programs into a single program.
B)  limited the amount of time that people could receive assistance.
C)  said it was no longer necessary for poor people to demonstrate an additional "need," such as small children or a disability, to qualify for assistance.
D)  turned all federally-run welfare programs over to the states.E) None of the above
F) A) and C)

Exam 20: Income Inequality and Poverty

The poverty line is set by the government so that 10 percent of all families fall below that line and are thereby classified as "poor."

Correct Answer
verified

The poverty line in the country of Inequalia is $7,800. The distribution of income for Inequalia is as follows: The poverty rate in Inequalia is

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 U.S. welfare system was revised by a 1996 law that

Correct Answer
verified

Correct Answer
verified

The United States has greater income disparity than

Correct Answer
verified

The United States has less income inequality than

Correct Answer
verified

Of the following groups, which group is most likely to live in poverty - children, elderly, married-couple families, female household with no spouse present?

Correct Answer
verified
female hou...
View Answer

The poverty line in the country of Inequalia is $10,000. The distribution of income for Inequalia is as follows: The poverty rate in Inequalia is

Correct Answer
verified

If income were equally distributed among households,

Correct Answer
verified

Which of the following is not a characteristic of the Earned Income Tax Credit (EITC) ?

Correct Answer
verified

The calculation of the poverty line includes adjustments for

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Ms. Spring currently earns $100,000 a year, while her junior partner, Mr. Fall, earns $55,000 a year. From the perspective of a utilitarian, if both of their incomes are subject to diminishing marginal utility, taking a dollar from Ms. Spring and giving it to Mr. Fall will

Correct Answer
verified

A society consists of three individuals: Sam, Tristan, and Ulyana. In terms of income and utility, Sam is currently best-off, Tristan ranks in the middle, and Ulyana is worst-off. Which of the following statements is correct?

Correct Answer
verified

There is very little economic mobility in the United States, which means that once a family is poor, it is very likely to remain poor for at least a decade.

Correct Answer
verified

Which philosopher claimed that the government should aim to maximize the well-being of the worst-off person in society?

Correct Answer
verified

The only qualification to receive government assistance under a negative income tax is

Correct Answer
verified

Table 20-14 James, Luke, Peter, Micah, and Sarah are the only five inhabits of Marketsville. The following table shows their income. -Refer to Table 20-14. According to the table, what percentage of individuals in Marketsville have an income above $90,000?

Correct Answer
verified

Exam 20: Income Inequality and Poverty

The poverty line is set by the government so that 10 percent of all families fall below that line and are thereby classified as "poor."

Correct AnswerverifiedShow Answer

The poverty line in the country of Inequalia is $7,800. The distribution of income for Inequalia is as follows: The poverty rate in Inequalia is

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 U.S. welfare system was revised by a 1996 law that

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The United States has greater income disparity than

Correct AnswerverifiedShow Answer

The United States has less income inequality than

Correct AnswerverifiedShow Answer

Of the following groups, which group is most likely to live in poverty - children, elderly, married-couple families, female household with no spouse present?

Correct Answerverifiedfemale hou...View AnswerShow Answer

The poverty line in the country of Inequalia is $10,000. The distribution of income for Inequalia is as follows: The poverty rate in Inequalia is

Correct AnswerverifiedShow Answer

If income were equally distributed among households,

Correct AnswerverifiedShow Answer

Which of the following is not a characteristic of the Earned Income Tax Credit (EITC) ?

Correct AnswerverifiedShow Answer

The calculation of the poverty line includes adjustments for

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Ms. Spring currently earns $100,000 a year, while her junior partner, Mr. Fall, earns $55,000 a year. From the perspective of a utilitarian, if both of their incomes are subject to diminishing marginal utility, taking a dollar from Ms. Spring and giving it to Mr. Fall will

Correct AnswerverifiedShow Answer

A society consists of three individuals: Sam, Tristan, and Ulyana. In terms of income and utility, Sam is currently best-off, Tristan ranks in the middle, and Ulyana is worst-off. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

There is very little economic mobility in the United States, which means that once a family is poor, it is very likely to remain poor for at least a decade.

Correct AnswerverifiedShow Answer

Which philosopher claimed that the government should aim to maximize the well-being of the worst-off person in society?

Correct AnswerverifiedShow Answer

The only qualification to receive government assistance under a negative income tax is

Correct AnswerverifiedShow Answer

Table 20-14 James, Luke, Peter, Micah, and Sarah are the only five inhabits of Marketsville. The following table shows their income. ​ ​ -Refer to Table 20-14. According to the table, what percentage of individuals in Marketsville have an income above $90,000?

Correct AnswerverifiedShow Answer

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female hou...
View Answer

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Table 20-14 James, Luke, Peter, Micah, and Sarah are the only five inhabits of Marketsville. The following table shows their income. -Refer to Table 20-14. According to the table, what percentage of individuals in Marketsville have an income above $90,000?

Correct Answer
verified