Question 1

If anti-poverty programs generate high marginal tax rates they may end up discouraging people from working.

Accepted Answer

A) True 
 B)False

Question 2

Poverty is correlated with race, age and family composition.

Accepted Answer

A) True 
 B)False

Question 3

When incentives to earn income are distorted by income redistribution programs:

Accepted Answer

A)   total income in an economy can fall
B)   total aggregate utility in society can fall
C)   losses can exceed potential gains from greater equality of income
D)   all of the above can occurE) A) and B)
F) B) and D)

Question 4

Suppose a government enacts policies that redistribute income. Which of the following statements is true? (i)  incentives will be distorted
(ii)  people are likely to alter their market behaviour
(iii)  a fair distribution of income is ensured

Accepted Answer

A)   (i)  only
B)   (i)  and (ii) 
C)   (ii)  and (iii) 
D)   (i)  and (iii) E) A) and D)
F) All of the above

Question 5

There are 100 people in society and they have to decide on an income distribution from behind the veil of ignorance. Use the maximin principle to decide which of the following income distributions would be selected by a Rawlsian liberal. Explain your answer.
In state A, 25 people earn $5m, 74 people earn $2m and 1 person earns $1m.
In state B, 5 people earn $5m and 95 people earn $2m.

Accepted Answer

The maximin principle is based on maximi...

Question 6

Evidence suggests that the women's movement has:

Accepted Answer

A)   decreased income inequality across households
B)   increased income inequality across households
C)   had no effect on the distribution of income across households
D)   decreased the importance of traditional measures of income inequalityE) A) and D)
F) All of the above

Question 7

According to the Henderson Commission, the poverty line in Australia was set at:

Accepted Answer

A)   25 per cent of average weekly earnings
B)   56.5 per cent of average weekly earnings
C)   65.5 per cent of average weekly earnings
D)   75 per cent of average weekly earningsE) B) and D)
F) A) and B)

Question 8

A permanent income theory suggests that a person's income is composed of predictable life cycle variation and:

Accepted Answer

A)   permanent changes that reflect the seasonal capacity of the economy
B)   structural change in the economy
C)   aggregate variation resulting from predictable business cycles
D)   random and transitory forces in the economyE) B) and D)
F) C) and D)

Question 9

The maximin criterion suggests that the focus of social policy would be to:

Accepted Answer

A)   elevate the wellbeing of all workers
B)   elevate the wellbeing of those at the bottom of the income distribution
C)   ensure an egalitarian distribution of income
D)   expropriate the factors of production from the capitalist classE) C) and D)
F) All of the above

Question 10

If a time limit is not used on recipient benefits, then the effect may be to: (i)  force mothers to work outside the home
(ii)  encourage child abuse by absent fathers
(iii)  encourage dependency on government programs

Accepted Answer

A)   (i)  and (ii) 
B)   (i)  and (iii) 
C)   (ii)  and (iii) 
D)   (iii)  onlyE) B) and D)
F) C) and D)

Question 11

If cash is transferred to the poor, this is known as an in-kind transfer.

Accepted Answer

A) True 
 B)False

Question 12

What would be the qualification(s)  to receive government assistance under a negative income tax? (i)  being enrolled in job training
(ii)  having preschool children
(iii)  having a low income

Accepted Answer

A)   (i)  and (ii) 
B)   (ii)  and (iii) 
C)   (ii)  only
D)   (iii)  onlyE) All of the above
F) C) and D)

Question 13

Under a negative income tax, it is likely for a person who does not earn income to receive assistance from the government.

Accepted Answer

A) True 
 B)False

Question 14

Suppose the government proposes a negative income tax that calculates taxes owed according to the formula TAXES OWED = (1/3 * INCOME) - 10 000. Suppose a family only earns $12 000. How much tax would they pay?

Accepted Answer

A)   they will pay a tax of $4000
B)   they will pay a tax of $6000
C)   they will receive a net income subsidy of $6000
D)   they will receive a net income subsidy of $4000E) All of the above
F) A) and C)

Question 15

Explain the concept of diminishing marginal utility and describe the role that it plays in the utilitarian argument for redistribution of income.

Accepted Answer

In this context, diminishing marginal ut...

Question 16

Assume that the government proposes a negative income tax that calculates taxes owed by the formula TAXES OWED = (1/3 * INCOME) - $10 000. Compute the tax that would be owed given each of the following levels of income.
a. $120 000
b. $90 000
c. $60 000
d. $30 000
e. zero

Accepted Answer

a. $30 000
b. $20 00...

Question 17

Measuring poverty using an absolute income scale (like the poverty line)  is likely to be deceptive because:

Accepted Answer

A)   income is not correlated with job satisfaction
B)   the poor are not likely to participate in the labour market
C)   income measures don't include the value of in-kind transfers
D)   money is more highly valued by the poor than by the richE) All of the above
F) C) and D)

Question 18

Evidence suggests that:

Accepted Answer

A)   the best way to deter immigrants is to make legal aliens ineligible for many welfare benefits
B)   legislation designed to limit the time a family can be on welfare will never be passed
C)   welfare dependency is embraced by over 80 per cent of new welfare recipients
D)   the longer a family is on welfare, the harder it is to get off welfareE) C) and D)
F) All of the above

Question 19

A school voucher system introduced in the United States has lead to:

Accepted Answer

A)   less low income households sending their children to private schools
B)   more low income households sending their children to private schools
C)   no change in the number of low income households sending their children to private schools
D)   decrease in the number of private school schoolsE) A) and B)
F) None of the above

Question 20

One way to measure the poverty rate is by calculating the percentage of the population whose family income is below the poverty line.

Accepted Answer

A) True 
 B)False

Exam 21: Income Inequity and Poverty

If anti-poverty programs generate high marginal tax rates they may end up discouraging people from working.

Correct Answer
verified

Explain the concept of diminishing marginal utility and describe the role that it plays in the utilitarian argument for redistribution of income.

Correct Answer
verified
In this context, diminishing marginal ut...
View Answer

If a time limit is not used on recipient benefits, then the effect may be to: (i) force mothers to work outside the home (ii) encourage child abuse by absent fathers (iii) encourage dependency on government programs

Correct Answer
verified

When incentives to earn income are distorted by income redistribution programs:

Correct Answer
verified

Poverty is correlated with race, age and family composition.

Correct Answer
verified

If cash is transferred to the poor, this is known as an in-kind transfer.

Correct Answer
verified

Under a negative income tax, it is likely for a person who does not earn income to receive assistance from the government.

Correct Answer
verified

A permanent income theory suggests that a person's income is composed of predictable life cycle variation and:

Correct Answer
verified

Evidence suggests that:

Correct Answer
verified

Assume that the government proposes a negative income tax that calculates taxes owed by the formula TAXES OWED = (1/3 * INCOME) - $10 000. Compute the tax that would be owed given each of the following levels of income. a. $120 000 b. $90 000 c. $60 000 d. $30 000 e. zero

Correct Answer
verified
a. $30 000
b. $20 00...
View Answer

Suppose a government enacts policies that redistribute income. Which of the following statements is true? (i) incentives will be distorted (ii) people are likely to alter their market behaviour (iii) a fair distribution of income is ensured

Correct Answer
verified

One way to measure the poverty rate is by calculating the percentage of the population whose family income is below the poverty line.

Correct Answer
verified

What would be the qualification(s) to receive government assistance under a negative income tax? (i) being enrolled in job training (ii) having preschool children (iii) having a low income

Correct Answer
verified

The maximin criterion suggests that the focus of social policy would be to:

Correct Answer
verified

A school voucher system introduced in the United States has lead to:

Correct Answer
verified

Correct Answer
verified
The maximin principle is based on maximi...
View Answer

According to the Henderson Commission, the poverty line in Australia was set at:

Correct Answer
verified

Evidence suggests that the women's movement has:

Correct Answer
verified

Measuring poverty using an absolute income scale (like the poverty line) is likely to be deceptive because:

Correct Answer
verified

Suppose the government proposes a negative income tax that calculates taxes owed according to the formula TAXES OWED = (1/3 * INCOME) - 10 000. Suppose a family only earns $12 000. How much tax would they pay?

Correct Answer
verified

Exam 21: Income Inequity and Poverty

If anti-poverty programs generate high marginal tax rates they may end up discouraging people from working.

Correct AnswerverifiedShow Answer

Explain the concept of diminishing marginal utility and describe the role that it plays in the utilitarian argument for redistribution of income.

Correct AnswerverifiedIn this context, diminishing marginal ut...View AnswerShow Answer

If a time limit is not used on recipient benefits, then the effect may be to: (i) force mothers to work outside the home (ii) encourage child abuse by absent fathers (iii) encourage dependency on government programs

Correct AnswerverifiedShow Answer

When incentives to earn income are distorted by income redistribution programs:

Correct AnswerverifiedShow Answer

Poverty is correlated with race, age and family composition.

Correct AnswerverifiedShow Answer

If cash is transferred to the poor, this is known as an in-kind transfer.

Correct AnswerverifiedShow Answer

Under a negative income tax, it is likely for a person who does not earn income to receive assistance from the government.

Correct AnswerverifiedShow Answer

A permanent income theory suggests that a person's income is composed of predictable life cycle variation and:

Correct AnswerverifiedShow Answer

Evidence suggests that:

Correct AnswerverifiedShow Answer

Assume that the government proposes a negative income tax that calculates taxes owed by the formula TAXES OWED = (1/3 * INCOME) - $10 000. Compute the tax that would be owed given each of the following levels of income. a. $120 000 b. $90 000 c. $60 000 d. $30 000 e. zero

Correct Answerverifieda. $30 000b. $20 00...View AnswerShow Answer

Suppose a government enacts policies that redistribute income. Which of the following statements is true? (i) incentives will be distorted (ii) people are likely to alter their market behaviour (iii) a fair distribution of income is ensured

Correct AnswerverifiedShow Answer

One way to measure the poverty rate is by calculating the percentage of the population whose family income is below the poverty line.

Correct AnswerverifiedShow Answer

What would be the qualification(s) to receive government assistance under a negative income tax? (i) being enrolled in job training (ii) having preschool children (iii) having a low income

Correct AnswerverifiedShow Answer

The maximin criterion suggests that the focus of social policy would be to:

Correct AnswerverifiedShow Answer

A school voucher system introduced in the United States has lead to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe maximin principle is based on maximi...View AnswerShow Answer

According to the Henderson Commission, the poverty line in Australia was set at:

Correct AnswerverifiedShow Answer

Evidence suggests that the women's movement has:

Correct AnswerverifiedShow Answer

Measuring poverty using an absolute income scale (like the poverty line) is likely to be deceptive because:

Correct AnswerverifiedShow Answer

Suppose the government proposes a negative income tax that calculates taxes owed according to the formula TAXES OWED = (1/3 * INCOME) - 10 000. Suppose a family only earns $12 000. How much tax would they pay?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
In this context, diminishing marginal ut...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
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a. $30 000
b. $20 00...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified
The maximin principle is based on maximi...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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