Question 1

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) A) and D)

Question 2

In-kind transfers are politically popular because

Accepted Answer

A)  they provide high quality food and shelter.
B)  they provide cash.
C)  allow resale of food stamps for cash, if needed.
D)  the public believes that the aid is not going to support alcohol and drug addiction.E) A) and B)
F) None of the above

Question 3

Based on data from 2011, the top fifth of all families received approximately what percent of all income in the United States?

Accepted Answer

A)  83 percent
B)  49 percent
C)  41 percent
D)  21 percentE) A) and C)
F) A) and B)

Question 4

Table 20-10  *A Gini coefficient is a commonly used measure of income inequality, with values between 0 and 1 (0 corresponds to perfect equality whereby everyone has exactly the same income, and 1 corresponds to perfect inequality where one person has all the income, while everyone else has zero income) .
Source: The World Bank
-Refer to Table 20-10. Which country has the most unequal income distribution?

Accepted Answer

A)  Latvia
B)  Italy
C)  France
D)  SwedenE) B) and C)
F) A) and D)

Question 5

The study by economists Cox and Alm found that the 2006 pre-tax income of the richest fifth of U.S. households is

Accepted Answer

A)  5 times the pre-tax income of the poorest fifth.
B)  10 times the pre-tax income of the poorest fifth.
C)  15 times the pre-tax income of the poorest fifth.
D)  20 times the pre-tax income of the poorest fifth.E) All of the above
F) C) and D)

Question 6

Economic mobility in the United States is

Accepted Answer

A)  uncommon. Over 50 percent of poor families remain poor for 8 or more years.
B)  uncommon. Over 75 percent of poor families remain poor for 8 or more years.
C)  common. Fewer than 3 percent of poor families remain poor for 8 or more years.
D)  common. Fewer than 1 percent of poor families remain poor for 8 or more years.E) A) and B)
F) A) and C)

Question 7

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 8

Utilitarians believe that the proper goal of the government is to maximize the sum of the utilities of everyone in society.

Accepted Answer

A) True 
 B)False

Question 9

The political philosophy that views the redistribution of income as a form of social insurance is

Accepted Answer

A)  utilitarianism
B)  liberalism
C)  libertarianism
D)  welfarismE) A) and B)
F) A) and C)

Question 10

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 11

Poor families are eligible for financial assistance, without having to demonstrate any additional "need,"

Accepted Answer

A)  under the current welfare system and under a negative income tax.
B)  under the current welfare system but not under a negative income tax.
C)  under a negative income tax but not under the current welfare system.
D)  under neither the current welfare system nor under a negative income tax.E) None of the above
F) A) and B)

Question 12

Scenario 20-3
Suppose that a society is made up of five families whose incomes are as follows:
$120,000; $90,000; $30,000; $30,000; and $18,000.
The federal government is considering two potential income tax plans:
Plan A is a negative income tax plan where the taxes owed equal 1/3 of income minus $20,000.
Plan B is a two-tiered plan where families earning less than $35,000 pay no income tax and families earning more than $35,000 pay 10% of their income in taxes. The income tax revenue collected from those families earning over $35,000 is then redistributed equally to those families earning less than $35,000.
-Refer to Scenario 20-3. Assuming that utility is directly proportional to the cash value of after-tax income, which government policy would an advocate of libertarianism prefer?

Accepted Answer

A)  Plan A
B)  Plan B
C)  either Plan A or Plan B
D)  neither Plan A nor Plan B because any plan that forcibly redistributes income is against the philosophyE) A) and C)
F) B) and C)

Question 13

Which of the following programs to alleviate poverty would be most favored by philosopher Robert Nozick and why?

Accepted Answer

A)  A negative income tax because it would maximize the minimum income of members of society.
B)  An Earned Income Tax Credit (EIT
C)   because a policy that rewards the working poor would be the most just.
C)  An in-kind transfer program because it would maximize the total utility of all members of society.
D)  None of the programs would be favored because each of them forcibly redistributes income that was fairly, if not equally, earned.E) B) and C)
F) A) and D)

Question 14

The life-cycle pattern of income variation causes inequality in the distribution of annual income, but it does not necessarily represent .

Accepted Answer

inequality...

Question 15

Which of the following is not a question that economists try to answer when measuring the distribution of income?

Accepted Answer

A)  How many people live in poverty?
B)  How often do people receive a raise at work?
C)  How often do people move among income classes?
D)  What problems arise in measuring the amount of inequality?E) A) and C)
F) All of the above

Question 16

Liberalism suggests that public policies should aim to

Accepted Answer

A)  maximize the sum of utility of everyone in society.
B)  maximize the well-being of the average person in society.
C)  maximize the well-being of the worst-off person in society.
D)  minimize the difference between the utility of the best-off person in the society and the utility of the worst-off person in society.E) B) and C)
F) A) and D)

Question 17

Table 20-14
Income Inequality in the United States
The values in the table reflect the percentages of pre-tax-and transfer income.  Source: US Census Bureau
-Refer to Table 20-14. The trend in income inequality from 1980 to 2010 is .

Accepted Answer

The answer of Table 20-14
Income Inequality in the United States
The...

Question 18

Aniella believes that the demand for unskilled labor is relatively inelastic. Carmella believes that the demand for unskilled labor is relatively elastic. Which is an advocate of minimum-wage laws?

Accepted Answer

The answer of Aniella believes that the demand for unskilled...

Question 19

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 20

If the U.S. government determines that the cost of feeding an urban family of four is $5,200 per year, then the official poverty line for a family of that type is

Accepted Answer

A)  $10,400.
B)  $15,600.
C)  $20,800.
D)  $26,000.E) A) and B)
F) C) and D)

Exam 20: Income Inequality and Poverty

Table 20-14 Income Inequality in the United States The values in the table reflect the percentages of pre-tax-and transfer income. Source: US Census Bureau -Refer to Table 20-14. The trend in income inequality from 1980 to 2010 is .

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

The study by economists Cox and Alm found that the 2006 pre-tax income of the richest fifth of U.S. households is

Correct Answer
verified

Poor families are eligible for financial assistance, without having to demonstrate any additional "need,"

Correct Answer
verified

Correct Answer
verified

Which of the following programs to alleviate poverty would be most favored by philosopher Robert Nozick and why?

Correct Answer
verified

Liberalism suggests that public policies should aim to

Correct Answer
verified

Utilitarians believe that the proper goal of the government is to maximize the sum of the utilities of everyone in society.

Correct Answer
verified

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

Correct Answer
verified

Aniella believes that the demand for unskilled labor is relatively inelastic. Carmella believes that the demand for unskilled labor is relatively elastic. Which is an advocate of minimum-wage laws?

Correct Answer
verified

Correct Answer
verified

The political philosophy that views the redistribution of income as a form of social insurance is

Correct Answer
verified

If the U.S. government determines that the cost of feeding an urban family of four is $5,200 per year, then the official poverty line for a family of that type 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

Based on data from 2011, the top fifth of all families received approximately what percent of all income in the United States?

Correct Answer
verified

Which of the following is not a question that economists try to answer when measuring the distribution of income?

Correct Answer
verified

In-kind transfers are politically popular because

Correct Answer
verified

The life-cycle pattern of income variation causes inequality in the distribution of annual income, but it does not necessarily represent .

Correct Answer
verified
inequality...
View Answer

Economic mobility in the United States is

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

Exam 20: Income Inequality and Poverty

Table 20-14 Income Inequality in the United States The values in the table reflect the percentages of pre-tax-and transfer income. Source: US Census Bureau -Refer to Table 20-14. The trend in income inequality from 1980 to 2010 is .

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

The study by economists Cox and Alm found that the 2006 pre-tax income of the richest fifth of U.S. households is

Correct AnswerverifiedShow Answer

Poor families are eligible for financial assistance, without having to demonstrate any additional "need,"

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following programs to alleviate poverty would be most favored by philosopher Robert Nozick and why?

Correct AnswerverifiedShow Answer

Liberalism suggests that public policies should aim to

Correct AnswerverifiedShow Answer

Utilitarians believe that the proper goal of the government is to maximize the sum of the utilities of everyone in society.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Aniella believes that the demand for unskilled labor is relatively inelastic. Carmella believes that the demand for unskilled labor is relatively elastic. Which is an advocate of minimum-wage laws?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The political philosophy that views the redistribution of income as a form of social insurance is

Correct AnswerverifiedShow Answer

If the U.S. government determines that the cost of feeding an urban family of four is $5,200 per year, then the official poverty line for a family of that type 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

Based on data from 2011, the top fifth of all families received approximately what percent of all income in the United States?

Correct AnswerverifiedShow Answer

Which of the following is not a question that economists try to answer when measuring the distribution of income?

Correct AnswerverifiedShow Answer

In-kind transfers are politically popular because

Correct AnswerverifiedShow Answer

The life-cycle pattern of income variation causes inequality in the distribution of annual income, but it does not necessarily represent .

Correct Answerverifiedinequality...View AnswerShow Answer

Economic mobility in the United States is

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

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inequality...
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female hou...
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