Question 1

Figure 20-1
 
-Refer to Figure 20-1.The ratio of female-to-male earnings has increased steadily from about 1980 to 2008 because the earnings of men

Accepted Answer

A)   increased steadily but by approximately half of the increase in the earnings of women.
B)   decreased while the earnings of women increased.
C)   stayed relatively constant while the earnings of women increased.
D)   decreased by substantially more than the decrease in the earnings of women.E) A) and D)
F) A) and C)

Question 2

Table 20-3
The Distribution of Income in Hapland
 
-Refer to Table 20-3.If the poverty rate is 23%,where is the poverty line in Hapland?

Accepted Answer

A)   under $45,000
B)   between $45,000 and $59,999
C)   between $60,000 and $89,999
D)   between $90,000 and $119,999E) B) and C)
F) A) and D)

Question 3

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 B)
F) None of the above

Question 4

The poverty rate is

Accepted Answer

A)   a measure of income inequality across families.
B)   the percentage of the population whose family income falls below a specified level.
C)   an absolute level of income set by the federal government for each family size.
D)   measured by the number of in-kind transfers that a family receives.E) A) and B)
F) A) and C)

Question 5

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

Question 6

A utilitarian government must

Accepted Answer

A)   calculate the utility of each individual in society.
B)   avoid enacting any policies that redistribute income from the rich to the poor.
C)   balance the gains from greater equality against the losses from distorted incentives.
D)   pursue policies that do not affect the middle class.E) All of the above
F) B) and C)

Question 7

Critics of the minimum wage argue that

Accepted Answer

A)   labor demand is inelastic so firms can adjust production.
B)   too many older employees benefit at the expense of teenage workers.
C)   many minimum-wage earners are teenagers from middle-class families.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 8

Which of the following is not correct?

Accepted Answer

A)   A negative income tax only applies to working people, so it encourages people to get full-time work.
B)   Supporters advocate the use of the Earned Income Tax Credit as a way to help the working poor.
C)   A negative income tax subsidizes the incomes of poor people.
D)   An advantage of a negative income tax is that it is not based on the number of children, so it does not provide incentives for unmarried women to have children.E) A) and C)
F) A) and D)

Question 9

The English philosophers Jeremy Bentham and John Stuart Mill founded the school of thought called

Accepted Answer

A)   liberalism.
B)   libertarianism.
C)   mobilism.
D)   utilitarianism.E) A) and C)
F) All of the above

Question 10

Which group (or groups) would be the most upset by wide variation in the income distribution?

Accepted Answer

A)   utilitarians
B)   utilitarians and liberals
C)   libertarians
D)   liberals and libertariansE) A) and B)
F) A) and D)

Question 11

In 2008,the poverty line for a family of four in the U.S.was

Accepted Answer

A)   $56,194.
B)   $22,025.
C)   $19,971.
D)   $12,603.E) A) and B)
F) B) and D)

Question 12

Figure 20-2
Number of Poor
 
-Refer to Figure 20-2.Between 1965 and 2001,during recessions (the shaded bars) the number of individuals in poverty has

Accepted Answer

A)   increased.
B)   decreased.
C)   not changed.
D)   decreased and then increased.E) All of the above
F) A) and B)

Question 13

The poverty rate is a measure of the percentage of people whose incomes fall below

Accepted Answer

A)   a relative level of income.
B)   an absolute level of income.
C)   the median income for a family of three.
D)   the bottom 20 percent of the income distribution.E) B) and C)
F) All of the above

Question 14

Which of the following statements is correct?

Accepted Answer

A)   The poverty line is a relative standard.
B)   More families are pushed above the poverty line as economic growth pushes the entire income distribution upward.
C)   Increasing income inequality reduces poverty.
D)   Economic growth, by definition, affects all families equally.E) A) and D)
F) A) and C)

Question 15

About half of black and Hispanic children in female-headed households live in poverty.

Accepted Answer

A) True 
 B)False

Question 16

A typical worker's normal or average income is called

Accepted Answer

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

Question 17

When the government enacts policies to make the distribution of income more equitable,it distorts incentives,alters behavior,and makes the allocation of resources less efficient.

Accepted Answer

A) True 
 B)False

Question 18

A binding minimum wage

Accepted Answer

A)   affects employees but not employers.
B)   lowers the productivity of workers.
C)   raises the cost of labor to firms.
D)   All of the above are correct.E) A) and D)
F) B) and C)

Question 19

Table 20-9
Poverty Thresholds in 2002, by Size of Family and Number of Related Children Under 18 Years
[Dollars]
  
Source: U. S. Bureau of the Census, Current Population Survey.
-Refer to Table 20-9.What is the poverty line for a family of six with three children?

Accepted Answer

A)   $21,469
B)   $24,797
C)   $25,738
D)   $28,718E) A) and D)
F) None of the above

Question 20

Governments enact policies to

Accepted Answer

A)   make the distribution of income more efficient.
B)   make the distribution of income more equal.
C)   maximize the use of the welfare system.
D)   minimize the use of in-kind transfers.E) B) and D)
F) C) and D)

Exam 20: Income Inequality and Poverty.

The English philosophers Jeremy Bentham and John Stuart Mill founded the school of thought called

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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

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The poverty rate is a measure of the percentage of people whose incomes fall below

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A binding minimum wage

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Figure 20-2 Number of Poor -Refer to Figure 20-2.Between 1965 and 2001,during recessions (the shaded bars) the number of individuals in poverty has

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Table 20-3 The Distribution of Income in Hapland -Refer to Table 20-3.If the poverty rate is 23%,where is the poverty line in Hapland?

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When the government enacts policies to make the distribution of income more equitable,it distorts incentives,alters behavior,and makes the allocation of resources less efficient.

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Table 20-9 Poverty Thresholds in 2002, by Size of Family and Number of Related Children Under 18 Years [Dollars] Source: U. S. Bureau of the Census, Current Population Survey. -Refer to Table 20-9.What is the poverty line for a family of six with three children?

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Governments enact policies to

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Critics of the minimum wage argue that

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Figure 20-1 -Refer to Figure 20-1.The ratio of female-to-male earnings has increased steadily from about 1980 to 2008 because the earnings of men

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Which of the following is not correct?

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About half of black and Hispanic children in female-headed households live in poverty.

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A utilitarian government must

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The poverty rate is

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Which group (or groups) would be the most upset by wide variation in the income distribution?

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Medicaid and food stamps are

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A typical worker's normal or average income is called

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In 2008,the poverty line for a family of four in the U.S.was

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Which of the following statements is correct?

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