Question 1

In 2011 the top 20% of income earners accounted for over 80% of all income received by United States' families.

Accepted Answer

A) True 
 B)False

Question 2

Figure 20-3 
-Refer to Figure 20-3. In 1968, the percent of adults aged 18 to 64 years in poverty is

Accepted Answer

A)  higher than both the percentage of children under age 18 and the percentage of elderly aged 65 and over in poverty.
B)  higher than the percentage of children under age 18 but is lower than the percentage of elderly aged 65 and over in poverty.
C)  lower than both the percentage of children under age 18 and the percentage of elderly aged 65 and over in poverty.
D)  lower than the percentage of children under age 18 but is higher than the percentage of elderly aged 65 and over in poverty.E) None of the above
F) All of the above

Question 3

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) All of the above

Question 4

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)  the top fifth of households would have 50 percent of the income.
D)  50 percent of the households would receive exactly 50 percent of the income.E) A) and C)
F) B) and D)

Question 5

The maximin criterion for government policies is associated with

Accepted Answer

A)  the school of thought called utilitarianism.
B)  the school of thought called liberalism.
C)  the school of thought called libertarianism.
D)  the school of thought called stoicism.E) A) and B)
F) B) and C)

Question 6

Most economists believe that a family bases its spending decisions on its transitory income.

Accepted Answer

A) True 
 B)False

Question 7

In the Temporary Assistance for Needy Families program, most families

Accepted Answer

A)  must have both parents in the home to qualify.
B)  are female head-of-household families in which the father is absent.
C)  have adult children with disabilities living at home.
D)  are ineligible to receive assistance from other support programs.E) A) and B)
F) A) and C)

Question 8

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) C) and D)
F) A) and D)

Question 9

An advantage of a negative income tax is that it does not encourage the breakup of families because the only criterion for assistance is family income.

Accepted Answer

A) True 
 B)False

Question 10

Which political philosophy argues that the government should choose policies deemed just, as evaluated by an impartial observer?

Accepted Answer

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

Question 11

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) A) and B)
F) None of the above

Question 12

Economists study poverty and income inequality to answer which of the following questions?

Accepted Answer

A)  What are people's wages?
B)  How does labor-force experience affect wages?
C)  How much inequality is there in society?
D)  How do people adjust their behavior due to taxation?E) A) and B)
F) A) and C)

Question 13

Table 20-8  Source: U.S. Bureau of Census
-Refer to Table 20-8. Comparing data from 2000 and 2011, which of the following statements is correct?

Accepted Answer

A)  The bottom 40% of the population had a greater share of the income in 2011 than it did in 2001.
B)  The top 40% of the population had a greater share of the income in 2011 than it did in 2001.
C)  The middle 60% of the population had a greater share of the income in 2011 than it did in 2001.
D)  All of the above are correct.E) A) and B)
F) B) and C)

Question 14

Since the early 1970s, welfare benefits have declined,

Accepted Answer

A)  which is largely due to the success of the negative income tax program.
B)  which is largely due to the success of private charities.
C)  yet the percentage of children living with only one parent has increased.
D)  and the percentage of children living with only one parent has decreased.E) B) and C)
F) B) and D)

Question 15

If society chose to maximize total utility rather than minimum utility,

Accepted Answer

A)  society would achieve perfect income equality.
B)  society would achieve the maximin objective.
C)  its justice would be more utilitarian than Rawlsian.
D)  its justice would be more Rawlsian than utilitarian.E) C) and D)
F) B) and D)

Question 16

Table 20-9
Income Inequality in the United States
The values in the table reflect the percentages of pre-tax-and transfer income.  Source: US Census Bureau
-Refer to Table 20-9. In 2010, the top fifth of the US population had

Accepted Answer

A)  50.2% more income than the remainder of the population.
B)  a lower share of income than the top fifth in 1980.
C)  about 15 times as much income as the bottom fifth.
D)  about 6 times as much income as the middle fifth.E) A) and B)
F) C) and D)

Question 17

A negative income tax system would

Accepted Answer

A)  make taxes more regressive.
B)  sever the link between tax policy and income distribution.
C)  collect from high-income households and give transfers to low-income households.
D)  eliminate progressive tax rates.E) A) and D)
F) A) and C)

Question 18

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 19

Since the early 1970s, average incomes have

Accepted Answer

A)  increased, which has reduced the poverty rate.
B)  increased, while the poverty rate increased slightly.
C)  decreased, while the poverty rate has remained unchanged.
D)  remained unchanged, while the poverty rate has decreased.E) None of the above
F) A) and B)

Question 20

The regular pattern of income variation over a person's life is called the .

Accepted Answer

The answer of The regular pattern of income variation over...

Exam 20: Income Inequality and Poverty

Table 20-8 Source: U.S. Bureau of Census -Refer to Table 20-8. Comparing data from 2000 and 2011, which of the following statements is correct?

Correct AnswerverifiedShow Answer

Since the early 1970s, welfare benefits have declined,

Correct AnswerverifiedShow Answer

If society chose to maximize total utility rather than minimum utility,

Correct AnswerverifiedShow Answer

Most economists believe that a family bases its spending decisions on its transitory income.

Correct AnswerverifiedShow Answer

An advantage of a negative income tax is that it does not encourage the breakup of families because the only criterion for assistance is family income.

Correct AnswerverifiedShow Answer

In the Temporary Assistance for Needy Families program, most families

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Economists study poverty and income inequality to answer which of the following questions?

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Economic mobility in the United States is

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If income were equally distributed among households,

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Figure 20-3 -Refer to Figure 20-3. In 1968, the percent of adults aged 18 to 64 years in poverty is

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The regular pattern of income variation over a person's life is called the .

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Which political philosophy argues that the government should choose policies deemed just, as evaluated by an impartial observer?

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

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Since the early 1970s, average incomes have

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Table 20-9 Income Inequality in the United States The values in the table reflect the percentages of pre-tax-and transfer income. Source: US Census Bureau -Refer to Table 20-9. In 2010, the top fifth of the US population had

Correct AnswerverifiedShow Answer

In 2011 the top 20% of income earners accounted for over 80% of all income received by United States' families.

Correct AnswerverifiedShow Answer

A negative income tax system would

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The maximin criterion for government policies is associated with

Correct AnswerverifiedShow Answer

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