Question 1

Based on U.S.income data from 2008,the bottom fifth of all families received approximately what percent of all income?

Accepted Answer

A)   48 percent
B)   21 percent
C)   10 percent
D)   4 percentE) A) and B)
F) A) and C)

Question 2

Table 20-6
 
-Refer to Table 20-6.In both 2007 and 2008,approximately 25% of the population earned less than

Accepted Answer

A)   $15,000.
B)   $25,000.
C)   $50,000.
D)   $100,000.E) B) and D)
F) A) and B)

Question 3

Because people can borrow when they are young,the life cycle theory would suggest that one's standard of living depends on

Accepted Answer

A)   lifetime income rather than annual income.
B)   aggregate income rather than annual personal income.
C)   annual extended-family income rather than annual personal income.
D)   income averaged across seasons rather than across years.E) A) and B)
F) None of the above

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

When the government enacts policies to redistribute income,

Accepted Answer

A)   the objective is to enhance efficiency and a side effect is that the allocation of resources becomes more equal.
B)   the objective is to enhance efficiency and a side effect is that the allocation of resources becomes less equal.
C)   the objective is to enhance equality and a side effect is that the allocation of resources becomes more efficient.
D)   the objective is to enhance equality and a side effect is that the allocation of resources becomes less efficient.E) None of the above
F) All of the above

Question 6

Binding minimum-wage laws

Accepted Answer

A)   are most effective at alleviating poverty when labor demand is highly elastic.
B)   force a market imbalance between the supply and demand for labor.
C)   increase the efficiency of labor markets.
D)   are typically associated with a rise in employment among the poor.E) None of the above
F) B) and C)

Question 7

Libertarians believe that the government should enforce individual rights to ensure that all people have the same opportunities to use their talents to achieve success.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following statements is correct?

Accepted Answer

A)   Less than three percent of families are categorized as poor for eight years or more.
B)   In the United States, the grandson of a millionaire is much more likely to be rich than the grandson of an average-income person.
C)   The majority of millionaires in the United States inherited their wealth.
D)   Most workers have about the same income (adjusted for inflation)  when they are young as when they are middle-aged.E) B) and C)
F) A) and D)

Question 9

One existing government program that works much like a negative income tax is the Earned Income Tax Credit.

Accepted Answer

A) True 
 B)False

Question 10

The goal of utilitarians is to

Accepted Answer

A)   punish crimes and enforce voluntary agreements but not to redistribute income.
B)   redistribute income until each person has equal earnings.
C)   redistribute income until the marginal utility of the wealthiest person equals the total utility of the poorest person.
D)   redistribute income based on the assumption of diminishing marginal utility.E) All of the above
F) C) and D)

Question 11

The maximin criterion suggests that social policy should

Accepted Answer

A)   expropriate the factors of production from the capitalist class.
B)   ensure an equal distribution of income.
C)   elevate the well-being of those at the bottom of the income distribution.
D)   elevate the well-being of all workers.E) C) and D)
F) A) and D)

Question 12

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) B) and C)

Question 13

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 $60,000 before taxes would have how much after-tax income?

Accepted Answer

A)   $5,000
B)   $15,000
C)   $55,000
D)   $65,000E) A) and D)
F) A) and C)

Question 14

The life cycle effect characterizes a lifetime income profile in which income

Accepted Answer

A)   tends to follow a seasonal pattern.
B)   rises as a worker gains maturity and experience.
C)   rises and falls in conjunction with the business cycle.
D)   falls during the early years of market activity and peaks at retirement.E) A) and D)
F) A) and B)

Question 15

In the United States in 2008,the bottom fifth of the income distribution had incomes below $19,250.

Accepted Answer

A) True 
 B)False

Question 16

Government vouchers to purchase food,also known as food stamps,are an example of

Accepted Answer

A)   an in-kind transfer.
B)   life-cycle income.
C)   a negative income tax.
D)   permanent income.E) A) and B)
F) C) and D)

Question 17

Which of the following groups has the highest poverty rate?

Accepted Answer

A)   blacks
B)   Asians
C)   children (under age 18) 
D)   female households, no spouse presentE) B) and D)
F) A) and B)

Question 18

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.Below what level of income would families start to receive a subsidy from this negative income tax?

Accepted Answer

A)   $15,000
B)   $30,000
C)   $45,000
D)   $60,000E) All of the above
F) A) and C)

Question 19

Over the past 50 years,the U.S.poverty rate was at its lowest level in

Accepted Answer

A)   1973.
B)   1980.
C)   1990.
D)   2008.E) C) and D)
F) A) and D)

Question 20

Since the early 1970s,welfare benefits have declined,

Accepted Answer

A)   which is largely due to the success of the negative income tax program.
B)   which is largely due to the success of private charities.
C)   yet the percentage of children living with only one parent has increased.
D)   and the percentage of children living with only one parent has decreased.E) B) and C)
F) A) and B)

Exam 20: Income Inequality and Poverty.

The goal of utilitarians is to

Correct Answer
verified

Which of the following groups has the highest poverty rate?

Correct Answer
verified

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

Correct Answer
verified

When the government enacts policies to redistribute income,

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

The maximin criterion suggests that social policy should

Correct Answer
verified

Over the past 50 years,the U.S.poverty rate was at its lowest level in

Correct Answer
verified

Table 20-6 -Refer to Table 20-6.In both 2007 and 2008,approximately 25% of the population earned less than

Correct Answer
verified

Correct Answer
verified

Based on U.S.income data from 2008,the bottom fifth of all families received approximately what percent of all income?

Correct Answer
verified

One existing government program that works much like a negative income tax is the Earned Income Tax Credit.

Correct Answer
verified

Government vouchers to purchase food,also known as food stamps,are an example of

Correct Answer
verified

The life cycle effect characterizes a lifetime income profile in which income

Correct Answer
verified

Libertarians believe that the government should enforce individual rights to ensure that all people have the same opportunities to use their talents to achieve success.

Correct Answer
verified

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 $60,000 before taxes would have how much after-tax income?

Correct Answer
verified

In the United States in 2008,the bottom fifth of the income distribution had incomes below $19,250.

Correct Answer
verified

Because people can borrow when they are young,the life cycle theory would suggest that one's standard of living depends on

Correct Answer
verified

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

Correct Answer
verified

Binding minimum-wage laws

Correct Answer
verified

Since the early 1970s,welfare benefits have declined,

Correct Answer
verified

Exam 20: Income Inequality and Poverty.

The goal of utilitarians is to

Correct AnswerverifiedShow Answer

Which of the following groups has the highest poverty rate?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When the government enacts policies to redistribute income,

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

The maximin criterion suggests that social policy should

Correct AnswerverifiedShow Answer

Over the past 50 years,the U.S.poverty rate was at its lowest level in

Correct AnswerverifiedShow Answer

Table 20-6 -Refer to Table 20-6.In both 2007 and 2008,approximately 25% of the population earned less than

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Based on U.S.income data from 2008,the bottom fifth of all families received approximately what percent of all income?

Correct AnswerverifiedShow Answer

One existing government program that works much like a negative income tax is the Earned Income Tax Credit.

Correct AnswerverifiedShow Answer

Government vouchers to purchase food,also known as food stamps,are an example of

Correct AnswerverifiedShow Answer

The life cycle effect characterizes a lifetime income profile in which income

Correct AnswerverifiedShow Answer

Libertarians believe that the government should enforce individual rights to ensure that all people have the same opportunities to use their talents to achieve success.

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 $60,000 before taxes would have how much after-tax income?

Correct AnswerverifiedShow Answer

In the United States in 2008,the bottom fifth of the income distribution had incomes below $19,250.

Correct AnswerverifiedShow Answer

Because people can borrow when they are young,the life cycle theory would suggest that one's standard of living depends on

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Binding minimum-wage laws

Correct AnswerverifiedShow Answer

Since the early 1970s,welfare benefits have declined,

Correct AnswerverifiedShow Answer

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