Question 1

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

Accepted Answer

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

Question 2

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

Accepted Answer

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

Question 3

Which of the following is an example of a welfare program?

Accepted Answer

A)   Temporary Assistance for Needy Families (TANF) .
B)   Capital Gains Tax (CGT) .
C)   Life Cycle Transfers (LCT) .
D)   North American Free Trade Agreement (NAFT
A)  .E) B) and D)
F) None of the above

Question 4

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) B) and C)
F) A) and C)

Question 5

Minimum wage laws

Accepted Answer

A)   benefit all unskilled workers.
B)   create unemployment,but if demand is relatively elastic,the unemployment effects will be minor.
C)   may help the nonpoor,such as teenagers from wealthy families.
D)   reduce poverty by reducing unemployment.E) All of the above
F) B) and C)

Question 6

Binding minimum-wage laws

Accepted Answer

A)   are most effective at alleviating poverty when labor demand is highly elastic.
B)   force a market imbalance between the supply and demand for labor.
C)   increase the efficiency of labor markets.
D)   are typically associated with a rise in employment among the poor.E) A) and B)
F) A) and C)

Question 7

About half of black and Hispanic children in female-headed households live in poverty.

Accepted Answer

A) True 
 B)False

Question 8

Government programs that take money from high-income people and give it to low-income people typically

Accepted Answer

A)   improve economic efficiency by reducing poverty.
B)   reduce economic efficiency because they distort incentives.
C)   have no effect on economic efficiency because they both reduce poverty and distort incentives.
D)   sometimes improve,sometimes reduce,and sometimes have no effect on economic efficiency.E) A) and B)
F) A) and C)

Question 9

Which of the following statements is correct?

Accepted Answer

A)   A disadvantage of a minimum-wage law is that it may benefit unskilled workers who are not low-income workers.
B)   A disadvantage of a negative income tax program is that a poor person who chooses not to work many hours would receive a cash benefit.
C)   A disadvantage of an Earned Income Tax Credit (EIT
C)  is that a person who is unable to work due to a disability does not benefit from the program.
D)   All of the above are correct.E) B) and C)
F) B) and D)

Question 10

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) All of the above

Question 11

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) None of the above
F) All of the above

Question 12

For which of the following programs can a person qualify solely by having a low income?

Accepted Answer

A)   both Temporary Assistance for Needy Families (TANF) and Supplemental Security Income (SSI) 
B)   Temporary Assistance for Needy Families (TANF) but not Supplemental Security Income (SSI) 
C)   Supplemental Security Income (SSI) but not Temporary Assistance for Needy Families (TANF) 
D)   neither Temporary Assistance for Needy Families (TANF) nor Supplemental Security Income (SSI) E) A) and D)
F) None of the above

Question 13

Assume that the government proposes a negative income tax that calculates the taxes owed as follows: Taxes Owed = (1/3   Income) - 10,000.If a family doesn't earn any income,how does the negative income tax affect it?

Accepted Answer

A)   It will receive an income subsidy of $1,000.
B)   It will receive an income subsidy of $3,000.
C)   It will receive an income subsidy of $10,000.
D)   It will not be affected at all,since the negative income tax requires a family to earn income.E) B) and C)
F) A) and C)

Question 14

Suppose a society consists of only two people,John and Jane.A utilitarian would say that the proper role of government in this society is to

Accepted Answer

A)   equalize the incomes of John and Jane.
B)   equalize John's utility and Jane's utility.
C)   equalize John's marginal utility and Jane's marginal utility.
D)   maximize the sum of John's utility and Jane's utility.E) None of the above
F) A) and B)

Question 15

The marketplace allocates resources

Accepted Answer

A)   fairly.
B)   efficiently.
C)   to those desiring them least.
D)   both efficiently and equitably.E) C) and D)
F) None of the above

Question 16

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 17

The United States has more income inequality than Japan,Germany,and Canada.

Accepted Answer

A) True 
 B)False

Question 18

A common criticism of government programs that are designed to assist the poor is that

Accepted Answer

A)   those who receive assistance rarely meet the criterion for eligibility.
B)   the majority of those below the poverty line refuse to accept government assistance.
C)   they create incentives for people to become "needy."
D)   they typically account for a majority of annual government expenditures.E) None of the above
F) C) and D)

Question 19

Refer to Scenario 20-1.Assuming that utility is directly proportional to the cash value of after-tax income,which government policy would an advocate of liberalism 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 C)
F) A) and B)

Question 20

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 above $60,000?

Accepted Answer

A)   80 percent
B)   60 percent
C)   50 percent
D)   40 percentE) B) and C)
F) All of the above

Exam 20: Income Inequality and Poverty

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

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Assume that the government proposes a negative income tax that calculates the taxes owed as follows: Taxes Owed = (1/3 Income) - 10,000.If a family doesn't earn any income,how does the negative income tax affect it?

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A common criticism of government programs that are designed to assist the poor is that

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The marketplace allocates resources

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Refer to Scenario 20-1.Assuming that utility is directly proportional to the cash value of after-tax income,which government policy would an advocate of liberalism prefer?

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The United States has more income inequality than Japan,Germany,and Canada.

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

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Binding minimum-wage laws

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Suppose a society consists of only two people,John and Jane.A utilitarian would say that the proper role of government in this society is to

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For which of the following programs can a person qualify solely by having a low income?

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Government programs that take money from high-income people and give it to low-income people typically

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Minimum wage laws

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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 above $60,000?

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Income mobility studies suggest that poverty

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About half of black and Hispanic children in female-headed households live in poverty.

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

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

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Which of the following is an example of a welfare program?

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Which of the following statements is correct?

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The invisible hand of the marketplace acts to allocate resources

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