Question 1

Table 20-6
 
-Refer to Table 20-6. In both 2011 and 2012, approximately 25% of the population earned less than

Accepted Answer

A)   $15,000.
B)   $25,000.
C)   $50,000.
D)   $100,000.E) None of the above
F) A) and B)

Question 2

A utilitarian government has to balance the gains from greater income equality against the losses from distorted work incentives. To maximize total utility, therefore, the government

Accepted Answer

A)   would never tax labor income.
B)   must always achieve a fully egalitarian society.
C)   enacts policies that only benefit the middle class.
D)   stops short of a fully egalitarian society.E) A) and D)
F) C) and D)

Question 3

"An extra dollar of income gives more additional satisfaction to a poor person than to a rich person." This is an important assumption of which political philosophy?

Accepted Answer

A)   utilitarianism
B)   liberalism
C)   libertarianism
D)   republicanismE) A) and B)
F) A) and C)

Question 4

Scenario 20-3
Suppose that a society is made up of five families whose incomes are as follows:
$120,000; $90,000; $30,000; $30,000; and $18,000.
The federal government is considering two potential income tax plans:
Plan A is a negative income tax plan where the taxes owed equal 1/3 of income minus $20,000.
Plan B is a two-tiered plan where families earning less than $35,000 pay no income tax and families earning more than $35,000 pay 10% of their income in taxes. The income tax revenue collected from those families earning over
$35,000 is then redistributed equally to those families earning less than $35,000.
-Refer to Scenario 20-3. Assuming that utility is directly proportional to the cash value of after-tax income, which government policy would an advocate of libertarianism prefer?

Accepted Answer

A)   Plan A
B)   Plan B
C)   either Plan A or Plan B
D)   neither Plan A nor Plan B because any plan that forcibly redistributes income is against the philosophyE) A) and B)
F) None of the above

Question 5

Economic mobility in the United States is

Accepted Answer

A)   great, so many of those below the poverty line are there only temporarily.
B)   rare, so most of those below the poverty line are there for decades.
C)   rare, yet many of those below the poverty line are there only temporarily.
D)   unrelated to poverty.E) All of the above
F) None of the above

Question 6

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) None of the above
F) All of the above

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

When the government provides poor families with antipoverty programs such as welfare, Medicaid, food stamps, and the Earned Income Tax Credit which are all tied to income,

Accepted Answer

A)   the government creates an egalitarian distribution of income.
B)   the recipients can usually receive benefits for an unlimited amount of time.
C)   it is common for families to face very high effective marginal tax rates.
D)   the incentive to work and earn more income remains unchanged.E) A) and C)
F) A) and B)

Question 9

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 c. Say.
D)   A. Kondratieff and Thomas Malthus.E) A) and D)
F) A) and C)

Question 10

Which of the following represents a problem in measuring inequality?

Accepted Answer

A)   Measurements of income distributions typically include in-kind transfers, which distort the measure of inequality.
B)   A normal life-cycle pattern causes inequality in the income distribution but may not reflect inequality in living standards.
C)   Transitory income is a better measure of inequality than permanent income.
D)   Both a and b are correct.E) C) and D)
F) None of the above

Question 11

Table 20-10
  *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 20-10. 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) None of the above
F) All of the above

Question 12

The calculation of the poverty line includes adjustments for

Accepted Answer

A)   energy costs.
B)   child care costs.
C)   the level of prices.
D)   the Earned Income Tax Credit.E) A) and D)
F) B) and C)

Question 13

Poor families are eligible for financial assistance, without having to demonstrate any additional "need,"

Accepted Answer

A)   under the current welfare system and under a negative income tax.
B)   under the current welfare system but not under a negative income tax.
C)   under a negative income tax but not under the current welfare system.
D)   under neither the current welfare system nor under a negative income tax.E) All of the above
F) C) and D)

Question 14

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

Accepted Answer

A)   a way to improve the welfare of all in society.
B)   a way to enhance Antonio's income in a socially responsible way.
C)   validation of the role of diminishing marginal utility over the maximin criterion.
D)   an inappropriate role for government, since government should not redistribute income.E) A) and B)
F) None of the above

Question 15

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

Accepted Answer

A)   economic mobility.
B)   place in the economic life cycle.
C)   transitory income.
D)   permanent income.E) C) and D)
F) B) and D)

Question 16

Which political philosophy argues that the government should choose policies to maximize the total utility of everyone in society?

Accepted Answer

The answer of Which political philosophy argues that the government...

Question 17

Suppose society consists of four individuals: Andy, Bill, Carl, and David. Andy has $20,000 of income, Bill has $40,000 of income, Carl has $60,000 of income, and David has $80,000 of income. A utilitarian would argue that

Accepted Answer

A)   taking $1 from Bill and giving it to Carl would increase society's total utility.
B)   taking $1 from Carl and giving it to Andy would increase society's total utility.
C)   taking $1 from Carl and giving it to David would increase society's total utility.
D)   taking $1 from Bill and giving it to David would increase society's total utility.E) All of the above
F) B) and C)

Question 18

If the U.S. government determines that the cost of feeding an urban family of four is $5,200 per year, then the official poverty line for a family of that type is

Accepted Answer

A)   $10,400.
B)   $15,600.
C)   $20,800.
D)   $26,000.E) A) and B)
F) A) and C)

Question 19

The poverty line is an absolute standard and is based on the cost of providing an adequate diet.

Accepted Answer

A) True 
 B)False

Question 20

What measure does the federal government use when setting the official poverty line in the US?

Accepted Answer

three times the cost...

Exam 20: Income Inequality and Poverty

A utilitarian government has to balance the gains from greater income equality against the losses from distorted work incentives. To maximize total utility, therefore, the government

Correct Answer
verified

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

Correct Answer
verified

"An extra dollar of income gives more additional satisfaction to a poor person than to a rich person." This is an important assumption of which political philosophy?

Correct Answer
verified

Correct Answer
verified

The founders of utilitarianism include

Correct Answer
verified

Poor families are eligible for financial assistance, without having to demonstrate any additional "need,"

Correct Answer
verified

The calculation of the poverty line includes adjustments for

Correct Answer
verified

Table 20-6 -Refer to Table 20-6. In both 2011 and 2012, approximately 25% of the population earned less than

Correct Answer
verified

Economic mobility in the United States is

Correct Answer
verified

Suppose society consists of four individuals: Andy, Bill, Carl, and David. Andy has $20,000 of income, Bill has $40,000 of income, Carl has $60,000 of income, and David has $80,000 of income. A utilitarian would argue that

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

If the U.S. government determines that the cost of feeding an urban family of four is $5,200 per year, then the official poverty line for a family of that type is

Correct Answer
verified

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

Correct Answer
verified

What measure does the federal government use when setting the official poverty line in the US?

Correct Answer
verified
three times the cost...
View Answer

Which of the following represents a problem in measuring inequality?

Correct Answer
verified

When the government provides poor families with antipoverty programs such as welfare, Medicaid, food stamps, and the Earned Income Tax Credit which are all tied to income,

Correct Answer
verified

The poverty line is an absolute standard and is based on the cost of providing an adequate diet.

Correct Answer
verified

Which political philosophy argues that the government should choose policies to maximize the total utility of everyone in society?

Correct Answer
verified

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

Correct Answer
verified

Exam 20: Income Inequality and Poverty

A utilitarian government has to balance the gains from greater income equality against the losses from distorted work incentives. To maximize total utility, therefore, the government

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

"An extra dollar of income gives more additional satisfaction to a poor person than to a rich person." This is an important assumption of which political philosophy?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The founders of utilitarianism include

Correct AnswerverifiedShow Answer

Poor families are eligible for financial assistance, without having to demonstrate any additional "need,"

Correct AnswerverifiedShow Answer

The calculation of the poverty line includes adjustments for

Correct AnswerverifiedShow Answer

Table 20-6 -Refer to Table 20-6. In both 2011 and 2012, approximately 25% of the population earned less than

Correct AnswerverifiedShow Answer

Economic mobility in the United States is

Correct AnswerverifiedShow Answer

Suppose society consists of four individuals: Andy, Bill, Carl, and David. Andy has $20,000 of income, Bill has $40,000 of income, Carl has $60,000 of income, and David has $80,000 of income. A utilitarian would argue that

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the U.S. government determines that the cost of feeding an urban family of four is $5,200 per year, then the official poverty line for a family of that type is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What measure does the federal government use when setting the official poverty line in the US?

Correct Answerverifiedthree times the cost...View AnswerShow Answer

Which of the following represents a problem in measuring inequality?

Correct AnswerverifiedShow Answer

When the government provides poor families with antipoverty programs such as welfare, Medicaid, food stamps, and the Earned Income Tax Credit which are all tied to income,

Correct AnswerverifiedShow Answer

The poverty line is an absolute standard and is based on the cost of providing an adequate diet.

Correct AnswerverifiedShow Answer

Which political philosophy argues that the government should choose policies to maximize the total utility of everyone in society?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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three times the cost...
View Answer

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