Question 1

Economists who study economic mobility have found that,if a father earns 20 percent above his generation's average income,his son will most likely earn

Accepted Answer

A)  an income equal to his generation's average income.
B)  8 percent above his generation's average income.
C)  5 percent below his generation's average income.
D)  3 percent above his generation's average income.E) A) and B)
F) All of the above

Question 2

Income mobility studies suggest that poverty

Accepted Answer

A)  cannot be alleviated by privately sponsored anti-poverty programs.
B)  cannot be alleviated by government sponsored anti-poverty programs.
C)  is a long-term problem for a relatively large number of families.
D)  is not a long-term problem for most families.E) B) and C)
F) C) and D)

Question 3

Explain the relationship between labor earnings and the distribution of income.

Accepted Answer

A person's earnings depend on the supply...

Question 4

The poverty line in the country of Grinnell is $10,000.The distribution of income for Grinnell is as follows: 
The poverty rate in Grinnell is

Accepted Answer

A)  5 percent.
B)  16.7 percent.
C)  50 percent.
D)  83.3 percent.E) A) and B)
F) B) and D)

Question 5

A hail storm would affect a farmer's

Accepted Answer

A)  permanent income.
B)  economic life cycle income.
C)  transitory income.
D)  natural income.E) All of the above
F) A) and C)

Question 6

A commonly-used gauge of poverty is the

Accepted Answer

A)  income inequality rate.
B)  average income rate.
C)  poverty rate.
D)  social inequality rate.E) B) and C)
F) All of the above

Question 7

Critics of welfare reform argue that

Accepted Answer

A)  drug addition has increased among the working poor.
B)  the emphasis on work has forced many mothers into low-paying jobs while not providing adequate child care.
C)  homelessness has increased dramatically.
D)  All of the above are correct.E) B) and C)
F) A) and B)

Question 8

If income were equally distributed among households,

Accepted Answer

A)  each household's relative share of income would increase.
B)  each household's relative share of income would decrease.
C)  50 percent of the households would receive exactly 50 percent of the income.
D)  the rich would become richer, the poor would become poorer.E) A) and C)
F) A) and B)

Question 9

Assume that the government proposes a negative income tax that calculates taxes owed by the formula,Taxes Owed = (a × Income)-
a.What is the value for "a"?
b.What is the value for "b"?
b.A family with an income of $40,000 pays $5,000 in taxes, and a family with an income of $12,000 receives an income subsidy of $2,000.
c.What is the tax liability of a family with an income of $50,000?
d.At what level of income will a family neither pay taxes, nor receive an income subsidy?

Accepted Answer

a. 0.25 or...

Question 10

Diminishing marginal utility suggests that

Accepted Answer

A)  more is always preferred to less.
B)  the well-being of society is maximized when the distribution of income is equal.
C)  the poor are less efficient at spending money than the rich.
D)  the poor receive more satisfaction from the last dollar spent than the rich.E) A) and D)
F) A) and C)

Question 11

According to a utilitarian,total social utility will be maximized when marginal dollars are distributed to the people with the

Accepted Answer

A)  lowest marginal utility of income.
B)  highest marginal utility of income.
C)  highest total utility from their income.
D)  most productive labor resources.E) A) and D)
F) A) and C)

Question 12

Explain how a "leaky bucket" can be used to illustrate the utilitarian argument that governments should not attempt to completely equalize individual incomes.

Accepted Answer

Utilitarians reject complete equalizatio...

Question 13

Liberalism is founded on a premise that behind a "veil of ignorance,"

Accepted Answer

A)  justice cannot be agreed upon.
B)  everyone's income should be equal.
C)  everyone would agree to "just" rules to reallocate income.
D)  society should maximize the sum of individual utilities.E) C) and D)
F) B) and D)

Question 14

The invisible hand of the marketplace acts to allocate resources

Accepted Answer

A)  efficiently but does not necessarily ensure that resources are allocated fairly.
B)  both fairly and efficiently.
C)  fairly but does not necessarily ensure that resources are allocated efficiently.
D)  neither fairly nor efficiently.E) A) and D)
F) C) and D)

Question 15

Which political philosophy believes that the government should equalize the incomes of all members of society?

Accepted Answer

A)  utilitarianism
B)  liberalism
C)  libertarianism
D)  None of the above is correct.E) C) and D)
F) None of the above

Question 16

"Only individual members of society earn income not society itself." This statement is most closely associated with the political philosophy of a

Accepted Answer

A)  utilitarian.
B)  liberal.
C)  libertarian.
D)  None of the above is correct.E) None of the above
F) C) and D)

Question 17

An example of a transitory change in income is the

Accepted Answer

A)  annual cost of living adjustment to your salary.
B)  increase in income that results from a job promotion linked to your education.
C)  increase in income of California orange growers that results from an orange-killing frost in Florida.
D)  All of the above are correct.E) None of the above
F) A) and D)

Question 18

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

Question 19

Compare and contrast the "life cycle" hypothesis and the "permanent income" hypothesis.What are their respective implications for inequality in the income distribution?

Accepted Answer

Life-cycle variation in income suggests ...

Question 20

Figure 20-2
Poverty Rates by Age
 
-Refer to Figure 20-2.From 1969 to 2001,the percent of elderly aged 64 and over in poverty has

Accepted Answer

A)  declined, while the percentage of children under age 18 in poverty has also declined.
B)  declined, while the percentage of children under age 18 in poverty has increased.
C)  increased, while the percentage of children under age 18 in poverty has declined.
D)  increased, while the percentage of children under age 18 in poverty has also increased.E) A) and B)
F) None of the above

Exam 20: Income Inequality and Poverty

According to a utilitarian,total social utility will be maximized when marginal dollars are distributed to the people with the

Correct Answer
verified

Figure 20-2 Poverty Rates by Age -Refer to Figure 20-2.From 1969 to 2001,the percent of elderly aged 64 and over in poverty has

Correct Answer
verified

Critics of welfare reform argue that

Correct Answer
verified

A commonly-used gauge of poverty is the

Correct Answer
verified

If income were equally distributed among households,

Correct Answer
verified

Which political philosophy believes that the government should equalize the incomes of all members of society?

Correct Answer
verified

Income mobility studies suggest that poverty

Correct Answer
verified

The poverty line in the country of Grinnell is $10,000.The distribution of income for Grinnell is as follows: The poverty rate in Grinnell is

Correct Answer
verified

Correct Answer
verified
a. 0.25 or...
View Answer

Economists who study economic mobility have found that,if a father earns 20 percent above his generation's average income,his son will most likely earn

Correct Answer
verified

Diminishing marginal utility suggests that

Correct Answer
verified

Compare and contrast the "life cycle" hypothesis and the "permanent income" hypothesis.What are their respective implications for inequality in the income distribution?

Correct Answer
verified
Life-cycle variation in income suggests ...
View Answer

Liberalism is founded on a premise that behind a "veil of ignorance,"

Correct Answer
verified

A hail storm would affect a farmer's

Correct Answer
verified

In-kind transfers are

Correct Answer
verified

Explain the relationship between labor earnings and the distribution of income.

Correct Answer
verified
A person's earnings depend on the supply...
View Answer

The invisible hand of the marketplace acts to allocate resources

Correct Answer
verified

Explain how a "leaky bucket" can be used to illustrate the utilitarian argument that governments should not attempt to completely equalize individual incomes.

Correct Answer
verified
Utilitarians reject complete equalizatio...
View Answer

An example of a transitory change in income is the

Correct Answer
verified

"Only individual members of society earn income not society itself." This statement is most closely associated with the political philosophy of a

Correct Answer
verified

Exam 20: Income Inequality and Poverty

According to a utilitarian,total social utility will be maximized when marginal dollars are distributed to the people with the

Correct AnswerverifiedShow Answer

Figure 20-2 Poverty Rates by Age -Refer to Figure 20-2.From 1969 to 2001,the percent of elderly aged 64 and over in poverty has

Correct AnswerverifiedShow Answer

Critics of welfare reform argue that

Correct AnswerverifiedShow Answer

A commonly-used gauge of poverty is the

Correct AnswerverifiedShow Answer

If income were equally distributed among households,

Correct AnswerverifiedShow Answer

Which political philosophy believes that the government should equalize the incomes of all members of society?

Correct AnswerverifiedShow Answer

Income mobility studies suggest that poverty

Correct AnswerverifiedShow Answer

The poverty line in the country of Grinnell is $10,000.The distribution of income for Grinnell is as follows: The poverty rate in Grinnell is

Correct AnswerverifiedShow Answer

Correct Answerverifieda. 0.25 or...View AnswerShow Answer

Economists who study economic mobility have found that,if a father earns 20 percent above his generation's average income,his son will most likely earn

Correct AnswerverifiedShow Answer

Diminishing marginal utility suggests that

Correct AnswerverifiedShow Answer

Compare and contrast the "life cycle" hypothesis and the "permanent income" hypothesis.What are their respective implications for inequality in the income distribution?

Correct AnswerverifiedLife-cycle variation in income suggests ...View AnswerShow Answer

Liberalism is founded on a premise that behind a "veil of ignorance,"

Correct AnswerverifiedShow Answer

A hail storm would affect a farmer's

Correct AnswerverifiedShow Answer

In-kind transfers are

Correct AnswerverifiedShow Answer

Explain the relationship between labor earnings and the distribution of income.

Correct AnswerverifiedA person's earnings depend on the supply...View AnswerShow Answer

The invisible hand of the marketplace acts to allocate resources

Correct AnswerverifiedShow Answer

Explain how a "leaky bucket" can be used to illustrate the utilitarian argument that governments should not attempt to completely equalize individual incomes.

Correct AnswerverifiedUtilitarians reject complete equalizatio...View AnswerShow Answer

An example of a transitory change in income is the

Correct AnswerverifiedShow Answer

"Only individual members of society earn income not society itself." This statement is most closely associated with the political philosophy of a

Correct AnswerverifiedShow Answer

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a. 0.25 or...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Life-cycle variation in income suggests ...
View Answer

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Correct Answer
verified

Correct Answer
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Correct Answer
verified
A person's earnings depend on the supply...
View Answer

Correct Answer
verified

Correct Answer
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Utilitarians reject complete equalizatio...
View Answer

Correct Answer
verified

Correct Answer
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