Question 1

Assume that the government proposes a negative income tax that calculates the taxes owed as follows: Taxes Owed = (1/3 Income) - 10,000.A family that earns an income of $30,000 will

Accepted Answer

A)   neither pay taxes nor receive an income subsidy.
B)   receive an income subsidy of $500.
C)   pay $1,000 in taxes.
D)   pay $600 in taxes.E) A) and B)
F) None of the above

Question 2

The 2008 U.S.distribution of income shows that the top 20 percent of families have approximately what share of income?

Accepted Answer

A)   20 percent
B)   35 percent
C)   50 percent
D)   80 percentE) A) and C)
F) All of the above

Question 3

The statement that "measures of the distribution of income are based on money income" relates to which problem in measuring inequality?

Accepted Answer

A)   in-kind transfers
B)   economic life cycle
C)   transitory versus permanent income
D)   economic mobilityE) B) and C)
F) B) and D)

Question 4

A family's ability to buy goods and services depends largely on its

Accepted Answer

A)   permanent income, which is its normal, or average, income.
B)   permanent income, which is the lowest annual income the family has received over a 10-year period.
C)   transitory income, which is the measure of income used by the government to analyze the distribution of income and the poverty rate.
D)   transitory income, which is its money income plus any in-kind transfers it receives.E) None of the above
F) B) and C)

Question 5

Table 20-3
The Distribution of Income in Hapland
 
-Refer to Table 20-3.According to the table,what percent of families in Hapland have income levels above $60,000?

Accepted Answer

A)   80 percent
B)   60 percent
C)   50 percent
D)   40 percentE) C) and D)
F) A) and B)

Question 6

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

Accepted Answer

A)   a negative income tax
B)   an Earned Income Tax Credit (EIT
C)  
C)   an in-kind transfer program
D)   None of the programs would be favored by Nozick.E) A) and D)
F) A) and C)

Question 7

Scenario 20-3
Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability:
Taxes owed = (1/3 of income)  - $15,000
-Refer to Scenario 20-3.A family earning $90,000 before taxes would have how much after-tax income?

Accepted Answer

A)   $65,000
B)   $75,000
C)   $85,000
D)   $105,000E) All of the above
F) C) and D)

Question 8

The poverty line is based on the percentage of people who cannot afford an adequate diet.

Accepted Answer

A) True 
 B)False

Question 9

Scenario 20-2
Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability:
Taxes owed = (1/4 of income)  - $20,000
-Refer to Scenario 20-2.Below what level of income would families start to receive a subsidy from this negative income tax?

Accepted Answer

A)   $20,000
B)   $60,000
C)   $80,000
D)   $90,000E) None of the above
F) C) and D)

Question 10

The founders of utilitarianism include

Accepted Answer

A)   A. C. Pigou and John Maynard Keynes.
B)   Jeremy Bentham and John Stuart Mill.
C)   Augustin Cournot and Jean B. Say.
D)   A. Kondratieff and Thomas Malthus.E) A) and B)
F) All of the above

Question 11

Figure 20-3
Panel A
  
Source: U.S. Bureau of the Census
Panel B
  
Source: U.S. Bureau of the Census
-Refer to Figure 20-3.Which of the following would be consistent with the data reported in Panel A?

Accepted Answer

A)   Policies that attempted to reduce female poverty rates were relatively successful.
B)   Policies that attempted to narrow the gap between male and female poverty rates were relatively successful.
C)   Both a and b are correct.
D)   Neither a nor b is correct.E) C) and D)
F) A) and C)

Question 12

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

Question 13

The United States has a more equal income distribution than many developing economies such as Mexico,South Africa,and Brazil.

Accepted Answer

A) True 
 B)False

Question 14

Which political philosophy believes that the government should equalize the incomes of all members of society?

Accepted Answer

A)   Utilitarianism.
B)   Liberalism.
C)   Libertarianism.
D)   None of the above is correct.E) All of the above
F) B) and C)

Question 15

Diminishing marginal utility suggests that

Accepted Answer

A)   more is always preferred to less.
B)   the well-being of society is maximized when the distribution of income is equal.
C)   the poor are less efficient at spending money than the rich.
D)   the poor receive more satisfaction from the last dollar spent than the rich.E) B) and D)
F) A) and B)

Question 16

The poverty rate is the percentage of the population whose family income falls below the poverty line..

Accepted Answer

A) True 
 B)False

Question 17

Table 20-5
  
*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 20-5.Which of the following statements is correct?

Accepted Answer

A)   Latvia has the most unequal distribution of income.
B)   France has a more equal distribution of income than Italy.
C)   Sweden has the most equal distribution of income.
D)   All of the above are correct.E) A) and B)
F) C) and D)

Question 18

Libertarians believe that in considering economic fairness,one should primarily consider the

Accepted Answer

A)   outcome of the system.
B)   process by which outcomes arise.
C)   maximin criterion.
D)   maximization total social utility.E) All of the above
F) C) and D)

Question 19

Which of the following is correct?

Accepted Answer

A)   Governments can never improve market outcomes.
B)   Governments can sometimes improve market outcomes.
C)   Governments can always improve market outcomes.
D)   Government can never make the income distribution more equal.E) A) and D)
F) C) and D)

Question 20

Standard measurements of the degree of income inequality take both money income and in-kind transfers into account.

Accepted Answer

A) True 
 B)False

Exam 20: Income Inequality and Poverty.

Which of the following is correct?

Correct Answer
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Correct Answer
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The statement that "measures of the distribution of income are based on money income" relates to which problem in measuring inequality?

Correct Answer
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The founders of utilitarianism include

Correct Answer
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The poverty line is based on the percentage of people who cannot afford an adequate diet.

Correct Answer
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Figure 20-3 Panel A Source: U.S. Bureau of the Census Panel B Source: U.S. Bureau of the Census -Refer to Figure 20-3.Which of the following would be consistent with the data reported in Panel A?

Correct Answer
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Which political philosophy believes that the government should equalize the incomes of all members of society?

Correct Answer
verified

Standard measurements of the degree of income inequality take both money income and in-kind transfers into account.

Correct Answer
verified

The poverty rate is the percentage of the population whose family income falls below the poverty line..

Correct Answer
verified

The study by economists Cox and Alm found

Correct Answer
verified

The United States has a more equal income distribution than many developing economies such as Mexico,South Africa,and Brazil.

Correct Answer
verified

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

Correct Answer
verified

Assume that the government proposes a negative income tax that calculates the taxes owed as follows: Taxes Owed = (1/3 Income) - 10,000.A family that earns an income of $30,000 will

Correct Answer
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The 2008 U.S.distribution of income shows that the top 20 percent of families have approximately what share of income?

Correct Answer
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Table 20-3 The Distribution of Income in Hapland -Refer to Table 20-3.According to the table,what percent of families in Hapland have income levels above $60,000?

Correct Answer
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Correct Answer
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Scenario 20-3 Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability: Taxes owed = (1/3 of income) - $15,000 -Refer to Scenario 20-3.A family earning $90,000 before taxes would have how much after-tax income?

Correct Answer
verified

Libertarians believe that in considering economic fairness,one should primarily consider the

Correct Answer
verified

Diminishing marginal utility suggests that

Correct Answer
verified

A family's ability to buy goods and services depends largely on its

Correct Answer
verified

Exam 20: Income Inequality and Poverty.

Which of the following is correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The statement that "measures of the distribution of income are based on money income" relates to which problem in measuring inequality?

Correct AnswerverifiedShow Answer

The founders of utilitarianism include

Correct AnswerverifiedShow Answer

The poverty line is based on the percentage of people who cannot afford an adequate diet.

Correct AnswerverifiedShow Answer

Figure 20-3 Panel A Source: U.S. Bureau of the Census Panel B Source: U.S. Bureau of the Census -Refer to Figure 20-3.Which of the following would be consistent with the data reported in Panel A?

Correct AnswerverifiedShow Answer

Which political philosophy believes that the government should equalize the incomes of all members of society?

Correct AnswerverifiedShow Answer

Standard measurements of the degree of income inequality take both money income and in-kind transfers into account.

Correct AnswerverifiedShow Answer

The poverty rate is the percentage of the population whose family income falls below the poverty line..

Correct AnswerverifiedShow Answer

The study by economists Cox and Alm found

Correct AnswerverifiedShow Answer

The United States has a more equal income distribution than many developing economies such as Mexico,South Africa,and Brazil.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Assume that the government proposes a negative income tax that calculates the taxes owed as follows: Taxes Owed = (1/3 Income) - 10,000.A family that earns an income of $30,000 will

Correct AnswerverifiedShow Answer

The 2008 U.S.distribution of income shows that the top 20 percent of families have approximately what share of income?

Correct AnswerverifiedShow Answer

Table 20-3 The Distribution of Income in Hapland -Refer to Table 20-3.According to the table,what percent of families in Hapland have income levels above $60,000?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Scenario 20-3 Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability: Taxes owed = (1/3 of income) - $15,000 -Refer to Scenario 20-3.A family earning $90,000 before taxes would have how much after-tax income?

Correct AnswerverifiedShow Answer

Libertarians believe that in considering economic fairness,one should primarily consider the

Correct AnswerverifiedShow Answer

Diminishing marginal utility suggests that

Correct AnswerverifiedShow Answer

A family's ability to buy goods and services depends largely on its

Correct AnswerverifiedShow Answer

Correct Answer
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