Question 1

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) None of the above
F) B) and C)

Question 2

Critics argue that a disadvantage of minimum-wage laws is that they do not effectively target the working poor because many minimum-wage workers are the teenage children of middle-income families.

Accepted Answer

A) True 
 B)False

Question 3

Among all countries in the world, the United States has the most income inequality.

Accepted Answer

A) True 
 B)False

Question 4

The poverty line in the country of Inequalia is $7,800. The distribution of income for Inequalia is as follows: Number of Families Income
  200 less than $5,000
300 between $5,000 and $10,000
500 between $10,000 and $15,000
700 between $15,000 and $20,000
300 over $20,000
 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) A) and D)
F) A) and C)

Question 5

For a typical worker, her income will be lower when she is younger, peak around age 50, and decrease drastically when she retires. This pattern of changes in income for a typical worker is called

Accepted Answer

A)   the life cycle.
B)   permanent income.
C)   transitory income.
D)   in-kind transfers.E) A) and B)
F) A) and C)

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) None of the above
F) B) and D)

Question 7

Which of the following is an advantage of an in-kind transfer in comparison to a cash payment?

Accepted Answer

A)   In-kind transfers cost less to administer than cash transfers.
B)   In-kind transfers restrict the use of the benefit; thus, recipients receive necessities such as food and health care.
C)   In-kind transfers are more efficient than cash transfers.
D)   In-kind transfers give the recipient more utility than cash transfers.E) B) and D)
F) All of the above

Question 8

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) A) and D)
F) B) and D)

Question 9

Since 1970 the United States' income distribution has become more equal.

Accepted Answer

A) True 
 B)False

Question 10

Liberals believe

Accepted Answer

A)   that the government should choose just policies as evaluated by an impartial observer behind a "veil of ignorance."
B)   in the assumption of diminishing marginal utility.
C)   that everyone in society should have equal utility.
D)   that the government should not redistribute income.E) None of the above
F) B) and D)

Question 11

Which of the following formulas is most representative of a negative income tax proposal?

Accepted Answer

A)   Taxes Owed = (1/4 of Income)   $2
B)   Taxes Owed = (1/2 of Income)   3/4
C)   Taxes Owed = (1/2 of Income)  + $10,000
D)   Taxes Owed = (1/3 of Income)  - $10,000
E)   $2F) B) and C)
G) A) and E)

Question 12

Table 20-3
The Distribution of Income in Edgerton
 
-Refer to Table 20-3. According to the table, what percent of families in Edgerton have income levels below $76,000?

Accepted Answer

A)   20 percent.
B)   40 percent.
C)   60 percent.
D)   80 percent.E) A) and B)
F) All of the above

Question 13

In the Temporary Assistance for Needy Families program, most families

Accepted Answer

A)   must have both parents in the home to qualify.
B)   are female head-of-household families in which the father is absent.
C)   have adult children with disabilities living at home.
D)   are ineligible to receive assistance from other support programs.E) A) and C)
F) A) and B)

Question 14

Scenario 20-6
Zooey is a single mother of two young children whose husband died in a tragic car accident. She earns $20,000 per year working as a cashier at a grocery store. The government uses a negative income tax system in which Taxes owed = (1/4 of income)  - $15,000.
-Refer to Scenario 20-6. How much does Zooey owe or receive from the government?

Accepted Answer

A)   She receives $10,000.
B)   She owes $10,000.
C)   She receives $15,000.
D)   She owes $5,000E) A) and B)
F) None of the above

Question 15

Fewer than three percent of families are poor for eight or more years.

Accepted Answer

A) True 
 B)False

Question 16

Figure 20-3 
-Refer to Figure 20-3. Which of the following is consistent with the data reported in the figure?

Accepted Answer

A)   Policies to reduce elderly (65 years and older)  poverty rates since 1959 seem to have been effective.
B)   The age group suffering the highest poverty rate in recent years has been 18 to 64 year olds.
C)   Policies to reduce youth (under 18 years)  poverty rates since 1959 seem to have been effective.
D)   All of the above are correct.E) B) and C)
F) A) and B)

Question 17

Table 20-1
The following table shows the distribution of income in Marysville.
 
-Refer to Table 20-1. If the poverty line were $23,021, what would be the poverty rate?

Accepted Answer

A)   less than 25%
B)   between 25% and 50%
C)   between 50% and 75%
D)   There is insufficient information to answer this question.E) A) and B)
F) C) and D)

Question 18

Of the four countries below, which has the highest degree of income inequality?

Accepted Answer

A)   Germany
B)   Turkey
C)   South Africa
D)   MexicoE) A) and B)
F) A) and D)

Question 19

Which of the following statements is correct?

Accepted Answer

A)   A minimum wage law will result in less additional unemployment if labor demand is elastic rather than inelastic.
B)   An in-kind transfer allows a person to use the benefit to purchase whatever they think they need most.
C)   If a tax policy states that taxes owed equal 1/3 of income less $15,000, a person earning $25,000 per year would owe $6,666.67 in taxes.
D)   Welfare reform enacted in 1996 limited the amount of time recipients could stay on welfare.E) A) and D)
F) B) and D)

Question 20

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

Accepted Answer

The answer of The regular pattern of income variation over...

Exam 20: Income Inequality and Poverty

For a typical worker, her income will be lower when she is younger, peak around age 50, and decrease drastically when she retires. This pattern of changes in income for a typical worker is called

Correct Answer
verified

Which of the following is an advantage of an in-kind transfer in comparison to a cash payment?

Correct Answer
verified

Of the four countries below, which has the highest degree of income inequality?

Correct Answer
verified

Table 20-1 The following table shows the distribution of income in Marysville. -Refer to Table 20-1. If the poverty line were $23,021, what would be the poverty rate?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Table 20-3 The Distribution of Income in Edgerton -Refer to Table 20-3. According to the table, what percent of families in Edgerton have income levels below $76,000?

Correct Answer
verified

The poverty line is

Correct Answer
verified

In the Temporary Assistance for Needy Families program, most families

Correct Answer
verified

Fewer than three percent of families are poor for eight or more years.

Correct Answer
verified

Which of the following formulas is most representative of a negative income tax proposal?

Correct Answer
verified

Which of the following statements illustrates diminishing marginal utility?

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

Figure 20-3 -Refer to Figure 20-3. Which of the following is consistent with the data reported in the figure?

Correct Answer
verified

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

Correct Answer
verified

Liberals believe

Correct Answer
verified

Among all countries in the world, the United States has the most income inequality.

Correct Answer
verified

Since 1970 the United States' income distribution has become more equal.

Correct Answer
verified

Medicaid and food stamps are

Correct Answer
verified

Critics argue that a disadvantage of minimum-wage laws is that they do not effectively target the working poor because many minimum-wage workers are the teenage children of middle-income families.

Correct Answer
verified

Exam 20: Income Inequality and Poverty

For a typical worker, her income will be lower when she is younger, peak around age 50, and decrease drastically when she retires. This pattern of changes in income for a typical worker is called

Correct AnswerverifiedShow Answer

Which of the following is an advantage of an in-kind transfer in comparison to a cash payment?

Correct AnswerverifiedShow Answer

Of the four countries below, which has the highest degree of income inequality?

Correct AnswerverifiedShow Answer

Table 20-1 The following table shows the distribution of income in Marysville. -Refer to Table 20-1. If the poverty line were $23,021, what would be the poverty rate?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 20-3 The Distribution of Income in Edgerton -Refer to Table 20-3. According to the table, what percent of families in Edgerton have income levels below $76,000?

Correct AnswerverifiedShow Answer

The poverty line is

Correct AnswerverifiedShow Answer

In the Temporary Assistance for Needy Families program, most families

Correct AnswerverifiedShow Answer

Fewer than three percent of families are poor for eight or more years.

Correct AnswerverifiedShow Answer

Which of the following formulas is most representative of a negative income tax proposal?

Correct AnswerverifiedShow Answer

Which of the following statements illustrates diminishing marginal utility?

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Figure 20-3 -Refer to Figure 20-3. Which of the following is consistent with the data reported in the figure?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Liberals believe

Correct AnswerverifiedShow Answer

Among all countries in the world, the United States has the most income inequality.

Correct AnswerverifiedShow Answer

Since 1970 the United States' income distribution has become more equal.

Correct AnswerverifiedShow Answer

Medicaid and food stamps are

Correct AnswerverifiedShow Answer

Critics argue that a disadvantage of minimum-wage laws is that they do not effectively target the working poor because many minimum-wage workers are the teenage children of middle-income families.

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