Question 1

When we examine historical data on income inequality in the U.S. ,we see that the distribution of income gradually became

Accepted Answer

A)   more equal between 1935 and 2008.
B)   more equal between 1935 and 1973,but that trend reversed itself between 1973 and 2008.
C)   more unequal between 1935 and 1973,but that trend reversed itself between 1973 and 2008.
D)   more unequal between 1935 and 2008.E) A) and B)
F) B) and C)

Question 2

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) B) and D)
F) All of the above

Question 3

Table 20-8
  Source: U.S.Bureau of Census
-Refer to Table 20-8.In 2008,the bottom 60% of families has

Accepted Answer

A)   about 14% of total income in the U.S.
B)   about 29% of total income in the U.S.
C)   about 50% of total income in the U.S.
D)   about 73% of total income in the U.S.E) A) and D)
F) B) and D)

Question 4

If the imposition of a binding minimum wage results in much higher unemployment among workers seeking minimum wage jobs,

Accepted Answer

A)   firms will respond by demanding more labor.
B)   those workers who are employed will be worse off than before the minimum wage law.
C)   labor demand is relatively elastic.
D)   labor demand is relatively inelastic.E) A) and D)
F) A) and B)

Question 5

Which of the following is not an example of a welfare program?

Accepted Answer

A)   Supplemental Security Income (SSI) 
B)   Temporary Assistance for Needy Families (TANF) 
C)   food stamps
D)   minimum wage lawsE) B) and D)
F) A) and B)

Question 6

For a typical worker,her income will be lower when she is younger,peak around age 50,and decrease drastically when she retires.This pattern of changes in income for a typical worker is called

Accepted Answer

A)   the life cycle.
B)   permanent income.
C)   transitory income.
D)   in-kind transfers.E) A) and B)
F) A) and D)

Question 7

What is the primary problem in comparing income inequality in the US with income inequality in other countries?

Accepted Answer

difference...

Question 8

Since 1970,has the distribution of income in the US become more equal,less equal,or remained unchanged?

Accepted Answer

The answer of Since 1970,has the distribution of income in...

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Figure 20-2
Number of Poor 
-Refer to Figure 20-2.Between 1965 and 2001,during recessions (the shaded bars) the number of individuals in poverty has

Accepted Answer

A)   increased.
B)   decreased.
C)   not changed.
D)   decreased and then increased.E) A) and B)
F) A) and C)

Question 11

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 below $60,000?

Accepted Answer

A)   80 percent
B)   60 percent
C)   50 percent
D)   40 percentE) None of the above
F) C) and D)

Question 12

Which of the following is not correct?

Accepted Answer

A)   Toys for Tots,a program that collects new toys to distribute to poor children at Christmas,is an example of an in-kind transfer.
B)   Supporters advocate the use of in-kind transfers because they restrict the ability of recipients to purchase alcohol and drugs.
C)   Critics argue that in-kind transfers are inefficient and disrespectful.
D)   In order for a program to qualify as an in-kind transfer,it must have government approval.E) A) and D)
F) B) and C)

Question 13

In-kind transfers are

Accepted Answer

A)   obtained only by those who have political connections.
B)   provided only by the U.S.government.
C)   non-monetary items given to the poor.
D)   obtained primarily through soup kitchens and private charities.E) A) and B)
F) A) and C)

Question 14

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 $75,000 owe?

Accepted Answer

The answer of Suppose the government used the following formula...

Question 15

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

Accepted Answer

Diminishing marginal utility refers to t...

Question 16

Table 20-1
Distribution of Income in Imagination
 
-Refer to Table 20-1.The Human Development Report computes a measure of inequality by dividing the income of the richest 10% of the population by the income of the poorest 10%.What is the value for this measure of inequality in Imagination?

Accepted Answer

The answer of Table 20-1
Distribution of Income in Imagination
 
-Refer...

Question 17

Which of the following statements is correct?

Accepted Answer

A)   Followers of the liberalism political philosophy believe that society should maximize the total of individual utilities.
B)   The poverty line is adjusted for regional differences in the costs of raising children.
C)   One advantage to the Earned Income Tax Credit (EIT
C)  is that it benefits the working poor.
D)   Libertarians pursue policies to redistribute income from the rich to the poor.E) B) and D)
F) A) and D)

Question 18

In-kind transfers are politically popular because

Accepted Answer

A)   they provide high quality food and shelter.
B)   they provide cash.
C)   allow resale of food stamps for cash,if needed.
D)   the public believes that the aid is not going to support alcohol and drug addiction.E) A) and B)
F) C) and D)

Question 19

The poverty rate is an absolute level of income set by the federal government for each family size.A family with income below this rate is deemed to be in poverty.

Accepted Answer

A) True 
 B)False

Question 20

Economists who study economic mobility have found that the income of a grandfather and his grandson's income are

Accepted Answer

A)   not closely related.
B)   negatively related.
C)   directly related.
D)   equal.E) All of the above
F) None of the above

Exam 20: Income Inequality and Poverty

Figure 20-2 Number of Poor -Refer to Figure 20-2.Between 1965 and 2001,during recessions (the shaded bars) the number of individuals in poverty has

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

Correct AnswerverifiedDiminishing marginal utility refers to t...View AnswerShow Answer

Which of the following statements is correct?

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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 $75,000 owe?

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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 below $60,000?

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The poverty rate is an absolute level of income set by the federal government for each family size.A family with income below this rate is deemed to be in poverty.

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For a typical worker,her income will be lower when she is younger,peak around age 50,and decrease drastically when she retires.This pattern of changes in income for a typical worker is called

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Table 20-1 Distribution of Income in Imagination -Refer to Table 20-1.The Human Development Report computes a measure of inequality by dividing the income of the richest 10% of the population by the income of the poorest 10%.What is the value for this measure of inequality in Imagination?

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In-kind transfers are

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Which of the following represents a problem in measuring inequality?

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Table 20-8 Source: U.S.Bureau of Census -Refer to Table 20-8.In 2008,the bottom 60% of families has

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Economists who study economic mobility have found that the income of a grandfather and his grandson's income are

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In-kind transfers are politically popular because

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When we examine historical data on income inequality in the U.S. ,we see that the distribution of income gradually became

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Which of the following is not an example of a welfare program?

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If the imposition of a binding minimum wage results in much higher unemployment among workers seeking minimum wage jobs,

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Which of the following is not correct?

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What is the primary problem in comparing income inequality in the US with income inequality in other countries?

Correct Answerverifieddifference...View AnswerShow Answer

Since 1970,has the distribution of income in the US become more equal,less equal,or remained unchanged?

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

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Diminishing marginal utility refers to t...
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difference...
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