Question 1

The distribution of income for Danville is as follows:  If the poverty rate in Danville is 33.3 percent,what is the poverty line in Danville?

Accepted Answer

A)   $15,000.
B)   $20,000.
C)   $25,000.
D)   $30,000.E) B) and C)
F) A) and D)

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

The distribution of income for Inequalia is as follows:  If the poverty rate in Inequalia is 25 percent,what is the poverty line in Inequalia?

Accepted Answer

A)   $5,000
B)   $10,000
C)   $15,000
D)   $20,000E) None of the above
F) A) and C)

Question 4

Approximately what fraction of total income in the US economy comes from labor earnings?

Accepted Answer

The answer of Approximately what fraction of total income in...

Question 5

A government's policy of redistributing income makes the income distribution

Accepted Answer

A)   more equal,distorts incentives,alters behavior,and makes the allocation of resources more efficient.
B)   more equal,distorts incentives,alters behavior,and makes the allocation of resources less efficient.
C)   less equal,distorts incentives,alters behavior,and makes the allocation of resources more efficient.
D)   less equal,distorts incentives,alters behavior,and makes the allocation of resources less efficient.E) A) and D)
F) C) and D)

Question 6

A disadvantage of the Earned Income Tax Credit (EITC)program is that it does not help alleviate poverty due to unemployment,sickness,or other inability to work.

Accepted Answer

A) True 
 B)False

Question 7

Which group would be the least upset by wide variation in the income distribution?

Accepted Answer

A)   utilitarians
B)   liberals
C)   libertarians
D)   Each group would be equally upset.E) A) and D)
F) B) and C)

Question 8

Bill earns more than Donna.A legislator proposes taxing Bill to supplement Donna's income.A libertarian would view this proposal as

Accepted Answer

A)   a way to increase social justice.
B)   a way to enhance Donna's income in a socially responsible way.
C)   validation of the superiority of a libertarian maximin criterion over Rawlsian social justice.
D)   an inappropriate role for government,since government should not redistribute income.E) A) and B)
F) A) and C)

Question 9

Table 20-1
Distribution of Income in Imagination
 
-Refer to Table 20-1.Approximately what percentage of families in Imagination have income levels below $72,000?

Accepted Answer

A)   21%
B)   27%
C)   62%
D)   79%E) None of the above
F) All of the above

Question 10

Liberalism is the political philosophy espoused by

Accepted Answer

A)   Robert Nozick.
B)   John Stuart Mill.
C)   John Rawls.
D)   Jeremy Bentham.E) A) and D)
F) A) and C)

Question 11

Briefly describe the three prominent schools of thought in political philosophy.Identify one of the most well-known philosophers in each school.

Accepted Answer

According to utilitarianism,the governme...

Question 12

Suppose the government used the following formula to compute a family's tax liability: Taxes owed = 28% of income - $8,000.How much would a family that earned $20,000 owe?

Accepted Answer

A)   -$8,000
B)   -$2,400
C)   $0
D)   $2,400E) B) and C)
F) None of the above

Question 13

Explain how a "leaky bucket" can be used to illustrate the utilitarian argument that governments should not attempt to completely equalize individual incomes.

Accepted Answer

Utilitarians reject complete equalizatio...

Question 14

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

Question 15

When we compare the income distribution of the United States to those of other countries,we find that the U.S.

Accepted Answer

A)   has one of the most unequal income distributions.
B)   has one of the most equal income distributions.
C)   ranks around the middle of the group.
D)   is second to China as the most unequal distribution.E) B) and D)
F) B) and C)

Question 16

Figure 20-5 o,it is likely to A)  increase employment to a level above Qo. B)  reduce employment to a level below Qo. C)  provide more income to the working poor than they collectively received before the minimum wage was set. D)  have no effect on employment." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 20-5.If the government imposes a minimum wage above Wo,it is likely to

Accepted Answer

A)   increase employment to a level above Qo.
B)   reduce employment to a level below Qo.
C)   provide more income to the working poor than they collectively received before the minimum wage was set.
D)   have no effect on employment.E) None of the above
F) C) and D)

Question 17

Given the table shown,which country has a more equal income distribution? Explain your answer.

Accepted Answer

Country A has a more equal income distri...

Question 18

Figure 20-4
Poverty Rates by Age 
-Refer to Figure 20-4.In 2001,the percent of adults between ages 18 and 64 in poverty is

Accepted Answer

A)   higher than both the percentage of children under age 18 and the percentage of elderly aged 65 and over in poverty.
B)   higher than the percentage of children under age 18 but is lower than the percentage of elderly aged 65 and over in poverty.
C)   is lower than both the percentage of children under age 18 and the percentage of elderly aged 65 and over in poverty.
D)   is lower than the percentage of children under age 18 and is equal to the percentage of elderly aged 65 and over in poverty.E) C) and D)
F) None of the above

Question 19

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

Question 20

Pietro is 40 years old and is laid off from his job at the paper plant and borrows from his savings for 8 months until he finds a new job.Pietro's

Accepted Answer

A)   transitory income likely exceeds his permanent income for that year.
B)   borrowing is representative of a normal economic life cycle.
C)   permanent income is largely unaffected by this one time change to his income.
D)   economic mobility during this year is highly unusual,as US workers tend to stay in a particular income class.E) B) and C)
F) B) and D)

Exam 20: Income Inequality and Poverty

Explain how a "leaky bucket" can be used to illustrate the utilitarian argument that governments should not attempt to completely equalize individual incomes.

Correct AnswerverifiedUtilitarians reject complete equalizatio...View AnswerShow Answer

Briefly describe the three prominent schools of thought in political philosophy.Identify one of the most well-known philosophers in each school.

Correct AnswerverifiedAccording to utilitarianism,the governme...View AnswerShow 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

Bill earns more than Donna.A legislator proposes taxing Bill to supplement Donna's income.A libertarian would view this proposal as

Correct AnswerverifiedShow Answer

The distribution of income for Danville is as follows: If the poverty rate in Danville is 33.3 percent,what is the poverty line in Danville?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 20-4 Poverty Rates by Age -Refer to Figure 20-4.In 2001,the percent of adults between ages 18 and 64 in poverty is

Correct AnswerverifiedShow Answer

Suppose the government used the following formula to compute a family's tax liability: Taxes owed = 28% of income - $8,000.How much would a family that earned $20,000 owe?

Correct AnswerverifiedShow Answer

A typical worker's normal or average income is called

Correct AnswerverifiedShow Answer

A disadvantage of the Earned Income Tax Credit (EITC)program is that it does not help alleviate poverty due to unemployment,sickness,or other inability to work.

Correct AnswerverifiedShow Answer

Figure 20-5 -Refer to Figure 20-5.If the government imposes a minimum wage above Wo,it is likely to

Correct AnswerverifiedShow Answer

Table 20-1 Distribution of Income in Imagination -Refer to Table 20-1.Approximately what percentage of families in Imagination have income levels below $72,000?

Correct AnswerverifiedShow Answer

Liberalism is the political philosophy espoused by

Correct AnswerverifiedShow Answer

Given the table shown,which country has a more equal income distribution? Explain your answer.

Correct AnswerverifiedCountry A has a more equal income distri...View AnswerShow Answer

The distribution of income for Inequalia is as follows: If the poverty rate in Inequalia is 25 percent,what is the poverty line in Inequalia?

Correct AnswerverifiedShow Answer

Approximately what fraction of total income in the US economy comes from labor earnings?

Correct AnswerverifiedShow Answer

Which group would be the least upset by wide variation in the income distribution?

Correct AnswerverifiedShow Answer

Pietro is 40 years old and is laid off from his job at the paper plant and borrows from his savings for 8 months until he finds a new job.Pietro's

Correct AnswerverifiedShow Answer

A government's policy of redistributing income makes the income distribution

Correct AnswerverifiedShow Answer

When we compare the income distribution of the United States to those of other countries,we find that the U.S.

Correct AnswerverifiedShow Answer

Correct Answer
verified
Utilitarians reject complete equalizatio...
View Answer

Correct Answer
verified
According to utilitarianism,the governme...
View 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

Figure 20-5 -Refer to Figure 20-5.If the government imposes a minimum wage above W_o,it is likely to

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Country A has a more equal income distri...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified