Question 1

What percentage of millionaires in the United States are self-made?

Accepted Answer

A)   about 20 percent
B)   about 40 percent
C)   about 60 percent
D)   about 80 percentE) B) and C)
F) None of the above

Question 2

The typical economic life cycle illustrates how people tend to

Accepted Answer

A)   borrow more when they are younger and save more when they are middle-aged.
B)   earn their peak incomes immediately prior to the typical retirement age of 65.
C)   adjust their consumption based on changes in their transitory income.
D)   All of the above are correct.E) A) and C)
F) All of the above

Question 3

Goods and services given to the poor such as food stamps,housing vouchers,and medical services are called

Accepted Answer

The answer of Goods and services given to the poor...

Question 4

In the United States approximately 80 percent of millionaires did not inherit their wealth.This illustrates the

Accepted Answer

A)   amount of transitory income in the United States.
B)   effectiveness of government anti-poverty programs in the United States.
C)   great economic mobility in the United States.
D)   level of permanent income in the United States.E) A) and B)
F) C) and D)

Question 5

Utilitarianism is

Accepted Answer

A)   a liberal religion that focuses on individual rights.
B)   a political philosophy that believes the government should choose policies deemed to be just by an impartial observer.
C)   a political philosophy that believes the government should not redistribute income.
D)   a political philosophy that believes the government should choose policies to maximize the total utility of society.E) A) and D)
F) C) and D)

Question 6

Table 20-1
The following table shows the distribution of income in Thomasville.
 
-Refer to Table 20-1.Seventy-five percent of all families have incomes below what level?

Accepted Answer

A)   $28,000
B)   $50,000
C)   $85,000
D)   There is insufficient information to answer this question.E) All of the above
F) B) and C)

Question 7

Which of the following statements is not correct?

Accepted Answer

A)   Two key elements of welfare reform are work requirements and limiting the time that recipients can receive benefits.
B)   The Earned Income Tax Credit (EIT
C)  is very similar to a negative income tax.
C)   Minimum wage laws will likely increase unemployment.
D)   The elderly are more likely to be poor than single mothers.E) A) and B)
F) A) and C)

Question 8

Caroline earns more than John.Under a new tax system,some of the taxes paid by Caroline would go to John.A libertarian would

Accepted Answer

A)   support the system because an extra dollar earned by Caroline would be worth less to her than an extra dollar given to John.
B)   oppose the system if it redistributed income in the presence of equal opportunity.
C)   oppose the system because an extra dollar earned by Caroline would be worth more to her than an extra dollar given to John.
D)   support the system if it maximized the well-being of the poorest member of society.E) A) and D)
F) None of the above

Question 9

Which of the following does not explain the rise in income inequality in the United States from 1970 to 2008?

Accepted Answer

A)   Changes in technology.
B)   An increase in minimum wages.
C)   A reduction in the demand for unskilled labor.
D)   Increased international trade with low-wage countries.E) B) and C)
F) C) and D)

Question 10

The maximin criterion is attributed to which political philosophy?

Accepted Answer

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

Question 11

About four out of five millionaires in the United States earned their money rather than inherited it.

Accepted Answer

A) True 
 B)False

Question 12

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 B.Say.
D)   A.Kondratieff and Thomas Malthus.E) All of the above
F) None of the above

Question 13

The Callaway family owns a small bait and tackle shop in a resort town in Wisconsin.An economic recession reduces the number of tourists for one summer,which reduces the family's income for that year.For the Callaway family,their

Accepted Answer

A)   transitory income for the year of the recession likely exceeds their permanent income.
B)   permanent income likely exceeds their transitory income for the year of the recession.
C)   permanent income will be more affected by the recession than their transitory income.
D)   Both a and c are correct.E) A) and C)
F) B) and C)

Question 14

Based on U.S.data for 2008,the poverty rate is the highest for which group of people?

Accepted Answer

A)   children
B)   married couples
C)   female households,no spouse present
D)   the elderlyE) B) and D)
F) B) and C)

Question 15

The table below reflects the levels of total utility received from income for each of four members of a society.

a.Assume that the society has the following income distribution:
Peter $3
Paul $7
Mary $5
Jane $3
Is it possible for the government to increase total aggregate utility by redistributing income among members of society? Explain your answer.
b.Assume that the government has $19 to allocate among the four members of society.(Assume that no one has any income to start with. )If the government is interested in distributing income in a way that maximizes aggregate total utility,how should it distribute the $19 of income?
c.Does the table above describe a situation characterized by diminishing marginal utility? Explain your answer.

Accepted Answer

a.No.If a dollar is taken from anyone,th...

Question 16

When the government redistributes income to achieve greater equality,it

Accepted Answer

A)   distorts incentives.
B)   improves efficiency.
C)   focuses on middle income brackets.
D)   relies on foreign aid to help balance the budget.E) A) and B)
F) A) and C)

Question 17

Anti-poverty programs

Accepted Answer

A)   encourage saving among recipient groups.
B)   impose a very low marginal tax rate on income.
C)   are only made available to those with no other source of income.
D)   may discourage the poor from escaping poverty on their own.E) B) and C)
F) All of the above

Question 18

Which of the following formulas is most representative of a negative income tax proposal?

Accepted Answer

A)   Taxes Owed = (1/4 of Income) $2
B)   Taxes Owed = (1/2 of Income) 3/4
C)   Taxes Owed = (1/2 of Income) + $10,000
D)   Taxes Owed = (1/3 of Income) - $10,000E) None of the above
F) A) and C)

Question 19

The United States has more income inequality than Brazil and South Africa.

Accepted Answer

A) True 
 B)False

Question 20

If a government could successfully achieve the maximin criterion,each member of society would have an equal income.

Accepted Answer

A) True 
 B)False

Exam 20: Income Inequality and Poverty

Goods and services given to the poor such as food stamps,housing vouchers,and medical services are called

Correct Answer
verified

When the government redistributes income to achieve greater equality,it

Correct Answer
verified

Table 20-1 The following table shows the distribution of income in Thomasville. -Refer to Table 20-1.Seventy-five percent of all families have incomes below what level?

Correct Answer
verified

The founders of utilitarianism include

Correct Answer
verified

Which of the following formulas is most representative of a negative income tax proposal?

Correct Answer
verified

The Callaway family owns a small bait and tackle shop in a resort town in Wisconsin.An economic recession reduces the number of tourists for one summer,which reduces the family's income for that year.For the Callaway family,their

Correct Answer
verified

Which of the following does not explain the rise in income inequality in the United States from 1970 to 2008?

Correct Answer
verified

What percentage of millionaires in the United States are self-made?

Correct Answer
verified

Based on U.S.data for 2008,the poverty rate is the highest for which group of people?

Correct Answer
verified

The maximin criterion is attributed to which political philosophy?

Correct Answer
verified

Correct Answer
verified
a.No.If a dollar is taken from anyone,th...
View Answer

Utilitarianism is

Correct Answer
verified

Which of the following statements is not correct?

Correct Answer
verified

Caroline earns more than John.Under a new tax system,some of the taxes paid by Caroline would go to John.A libertarian would

Correct Answer
verified

If a government could successfully achieve the maximin criterion,each member of society would have an equal income.

Correct Answer
verified

In the United States approximately 80 percent of millionaires did not inherit their wealth.This illustrates the

Correct Answer
verified

Anti-poverty programs

Correct Answer
verified

The United States has more income inequality than Brazil and South Africa.

Correct Answer
verified

The typical economic life cycle illustrates how people tend to

Correct Answer
verified

About four out of five millionaires in the United States earned their money rather than inherited it.

Correct Answer
verified

Exam 20: Income Inequality and Poverty

Goods and services given to the poor such as food stamps,housing vouchers,and medical services are called

Correct AnswerverifiedShow Answer

When the government redistributes income to achieve greater equality,it

Correct AnswerverifiedShow Answer

Table 20-1 The following table shows the distribution of income in Thomasville. -Refer to Table 20-1.Seventy-five percent of all families have incomes below what level?

Correct AnswerverifiedShow Answer

The founders of utilitarianism include

Correct AnswerverifiedShow Answer

Which of the following formulas is most representative of a negative income tax proposal?

Correct AnswerverifiedShow Answer

The Callaway family owns a small bait and tackle shop in a resort town in Wisconsin.An economic recession reduces the number of tourists for one summer,which reduces the family's income for that year.For the Callaway family,their

Correct AnswerverifiedShow Answer

Which of the following does not explain the rise in income inequality in the United States from 1970 to 2008?

Correct AnswerverifiedShow Answer

What percentage of millionaires in the United States are self-made?

Correct AnswerverifiedShow Answer

Based on U.S.data for 2008,the poverty rate is the highest for which group of people?

Correct AnswerverifiedShow Answer

The maximin criterion is attributed to which political philosophy?

Correct AnswerverifiedShow Answer

Correct Answerverifieda.No.If a dollar is taken from anyone,th...View AnswerShow Answer

Utilitarianism is

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

Caroline earns more than John.Under a new tax system,some of the taxes paid by Caroline would go to John.A libertarian would

Correct AnswerverifiedShow Answer

If a government could successfully achieve the maximin criterion,each member of society would have an equal income.

Correct AnswerverifiedShow Answer

In the United States approximately 80 percent of millionaires did not inherit their wealth.This illustrates the

Correct AnswerverifiedShow Answer

Anti-poverty programs

Correct AnswerverifiedShow Answer

The United States has more income inequality than Brazil and South Africa.

Correct AnswerverifiedShow Answer

The typical economic life cycle illustrates how people tend to

Correct AnswerverifiedShow Answer

About four out of five millionaires in the United States earned their money rather than inherited it.

Correct AnswerverifiedShow Answer

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a.No.If a dollar is taken from anyone,th...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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