Question 1

Scenario 20-7
Zooey is a single mother of two young children whose husband died in a tragic car accident. She earns $20,000 per year working as a cashier at a grocery store. The government uses a negative income tax system in which
Taxes owed = (1/4 of income) - $15,000.
-Refer to Scenario 20-7. Zooey's friend Alfredo owes $0 in taxes. How much does he earn?

Accepted Answer

The answer of Scenario 20-7
Zooey is a single mother of...

Question 2

The philosopher John Rawls argued that

Accepted Answer

A)  people would choose a more equal distribution of income if they had to determine an economic distribution system before knowing their place in it.
B)  people would choose income inequality to allow the maximum use of their individual talents.
C)  government has a role to ensure income equality to prevent social unrest.
D)  people would choose equal opportunity because it is morally right.E) B) and D)
F) B) and C)

Question 3

Which of the following is an advantage of an in-kind transfer in comparison to a cash payment?

Accepted Answer

A)  In-kind transfers cost less to administer than cash transfers.
B)  In-kind transfers restrict the use of the benefit; thus, recipients receive necessities such as food and health care.
C)  In-kind transfers are more efficient than cash transfers.
D)  In-kind transfers give the recipient more utility than cash transfers.E) B) and C)
F) None of the above

Question 4

Assume that the government proposes a negative income tax that calculates the taxes owed as follows: taxes owed equal 30% of income less $12,000. A family that earns an income of $40,000 will

Accepted Answer

A)  neither pay taxes nor receive an income subsidy.
B)  receive an income subsidy of $3,600.
C)  pay $3,600 in taxes.
D)  pay $12,000 in taxes.E) A) and D)
F) None of the above

Question 5

Based on U.S. income data from 2011, the bottom fifth of all families received approximately what percent of all income?

Accepted Answer

A)  48.9 percent
B)  21.3 percent
C)  8.6 percent
D)  3.8 percentE) A) and B)
F) None of the above

Question 6

Ms. Spring currently earns $100,000 a year, while her junior partner, Mr. Fall, earns $55,000 a year. From the perspective of a utilitarian, if both of their incomes are subject to diminishing marginal utility, taking a dollar from Ms. Spring and giving it to Mr. Fall will

Accepted Answer

A)  increase society's total utility.
B)  lower Ms. Spring's marginal utility of income.
C)  increase Mr. Fall's marginal utility of income.
D)  lower society's total utility.E) B) and C)
F) A) and C)

Question 7

Scenario 20-2
The government is proposing switching from a progressive tax system, in which families pay 15% of the first $40,000 earned, 30% of the next $40,000 earned, and 45% of any income over $80,000 to a tax system in which every family pays 1/4 of its income regardless of how much they earn and all income redistribution is eliminated. That is, the tax revenue generated is used only for infrastructure, public administration, and national defense.
-Refer to Scenario 20-2. Which philosopher would be most in favor of the proposed change in tax policy?

Accepted Answer

A)  Jeremy Bentham
B)  John Stuart Mill
C)  John Rawls
D)  Robert NozickE) A) and C)
F) A) and B)

Question 8

The percentage of families with incomes below the poverty line

Accepted Answer

A)  is defined as the 10 percent of U.S.households with the lowest incomes.
B)  is known as the poverty rate.
C)  is known as the unemployment rate.
D)  rises as the general income level rises.E) B) and D)
F) A) and C)

Question 9

In the United States in 2011, the bottom fifth of the income distribution had incomes below $27,218.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements about the minimum wage is correct?

Accepted Answer

A)  An increase in the minimum wage enhances the well-being of all unskilled workers.
B)  An increase in the minimum wage has no effect on the well-being of middle-class families.
C)  Advocates of the minimum wage argue that the demand for labor is relatively inelastic.
D)  Critics of the minimum wage argue that it is an undesirable way of helping the poor because it is costly to the government.E) B) and D)
F) B) and C)

Question 11

Which of the following statements is not correct?

Accepted Answer

A)  An advantage of the Earned Income Tax Credit (EIT
C)   is that it targets the working poor better than the minimum wage because it does not benefit teenagers from middle-class families who work summer jobs at the minimum wage.
B)  A disadvantage of in-kind transfer programs such as food stamps is that they force recipients to purchase from a restricted set of items which may not include things that the poor need the most such as diapers or cleaning supplies.
C)  A disadvantage of minimum wage laws is that they are expensive for state and local governments to fund.
D)  Effective minimum wage laws create a surplus of labor.E) A) and D)
F) A) and B)

Question 12

Which philosopher claimed that the government should aim to maximize the well-being of the worst-off person in society?

Accepted Answer

The answer of Which philosopher claimed that the government should...

Question 13

Libertarians believe that in considering economic fairness, one should primarily consider the

Accepted Answer

A)  outcome of the system.
B)  process by which outcomes arise.
C)  maximin criterion.
D)  maximization total social utility.E) C) and D)
F) B) and C)

Question 14

A follower of liberalism would not support a redistribution of income but rather would focus on equalizing opportunities.

Accepted Answer

A) True 
 B)False

Question 15

Table 20-5
Distribution of Income in Umakastan 
-Refer to Table 20-5. Where would the government of Umakastan have to set the poverty line to have a poverty rate of about 28%?

Accepted Answer

A)  $20,000
B)  $34,690
C)  $38,000
D)  $56,000E) All of the above
F) A) and C)

Question 16

Table 20-11
Poverty Thresholds in 2011, by Size of Family and Number of Related Children Under 18 Years
[Dollars]  Source: U. S. Bureau of the Census, Current Population Survey.
-Refer to Table 20-11. What is the poverty line for a 75-year-old individual?

Accepted Answer

A)  $10,788
B)  $11,702
C)  $13,596
D)  $15,446E) A) and B)
F) A) and C)

Question 17

In the United States, long-term poverty affects

Accepted Answer

A)  more families than short-term poverty.
B)  an equal number of families as short-term poverty.
C)  slightly fewer families than short-term poverty.
D)  many fewer families than short-term poverty.E) None of the above
F) C) and D)

Question 18

Over the past 50 years, the U.S. poverty rate was at its lowest level in

Accepted Answer

A)  1973.
B)  1980.
C)  1990.
D)  2008.E) A) and C)
F) C) and D)

Question 19

Based on U.S. income data from 2011, the top fifth of all families received

Accepted Answer

A)  about 3.8 percent more than the bottom fifth.
B)  about 49 percent more than the bottom fifth.
C)  approximately 5 times more income than the bottom fifth.
D)  more than 12 times more income than the bottom fifth.E) A) and C)
F) B) and C)

Question 20

The percentage of the population whose family income falls below an absolute level is call the

Accepted Answer

The answer of The percentage of the population whose family...

Exam 20: Income Inequality and Poverty

The percentage of the population whose family income falls below an absolute level is call the

Correct Answer
verified

Based on U.S. income data from 2011, the top fifth of all families received

Correct Answer
verified

Which philosopher claimed that the government should aim to maximize the well-being of the worst-off person in society?

Correct Answer
verified

The philosopher John Rawls argued that

Correct Answer
verified

Correct Answer
verified

Which of the following statements is not correct?

Correct Answer
verified

Table 20-11 Poverty Thresholds in 2011, by Size of Family and Number of Related Children Under 18 Years [Dollars] Source: U. S. Bureau of the Census, Current Population Survey. -Refer to Table 20-11. What is the poverty line for a 75-year-old individual?

Correct Answer
verified

Assume that the government proposes a negative income tax that calculates the taxes owed as follows: taxes owed equal 30% of income less $12,000. A family that earns an income of $40,000 will

Correct Answer
verified

Based on U.S. income data from 2011, the bottom fifth of all families received approximately what percent of all income?

Correct Answer
verified

A follower of liberalism would not support a redistribution of income but rather would focus on equalizing opportunities.

Correct Answer
verified

Which of the following statements about the minimum wage is correct?

Correct Answer
verified

In the United States, long-term poverty affects

Correct Answer
verified

Libertarians believe that in considering economic fairness, one should primarily consider the

Correct Answer
verified

In the United States in 2011, the bottom fifth of the income distribution had incomes below $27,218.

Correct Answer
verified

Ms. Spring currently earns $100,000 a year, while her junior partner, Mr. Fall, earns $55,000 a year. From the perspective of a utilitarian, if both of their incomes are subject to diminishing marginal utility, taking a dollar from Ms. Spring and giving it to Mr. Fall will

Correct Answer
verified

Over the past 50 years, the U.S. poverty rate was at its lowest level in

Correct Answer
verified

Which of the following is an advantage of an in-kind transfer in comparison to a cash payment?

Correct Answer
verified

Correct Answer
verified

Table 20-5 Distribution of Income in Umakastan -Refer to Table 20-5. Where would the government of Umakastan have to set the poverty line to have a poverty rate of about 28%?

Correct Answer
verified

The percentage of families with incomes below the poverty line

Correct Answer
verified

Exam 20: Income Inequality and Poverty

The percentage of the population whose family income falls below an absolute level is call the

Correct AnswerverifiedShow Answer

Based on U.S. income data from 2011, the top fifth of all families received

Correct AnswerverifiedShow Answer

Which philosopher claimed that the government should aim to maximize the well-being of the worst-off person in society?

Correct AnswerverifiedShow Answer

The philosopher John Rawls argued that

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

Table 20-11 Poverty Thresholds in 2011, by Size of Family and Number of Related Children Under 18 Years [Dollars] Source: U. S. Bureau of the Census, Current Population Survey. -Refer to Table 20-11. What is the poverty line for a 75-year-old individual?

Correct AnswerverifiedShow Answer

Assume that the government proposes a negative income tax that calculates the taxes owed as follows: taxes owed equal 30% of income less $12,000. A family that earns an income of $40,000 will

Correct AnswerverifiedShow Answer

Based on U.S. income data from 2011, the bottom fifth of all families received approximately what percent of all income?

Correct AnswerverifiedShow Answer

A follower of liberalism would not support a redistribution of income but rather would focus on equalizing opportunities.

Correct AnswerverifiedShow Answer

Which of the following statements about the minimum wage is correct?

Correct AnswerverifiedShow Answer

In the United States, long-term poverty affects

Correct AnswerverifiedShow Answer

Libertarians believe that in considering economic fairness, one should primarily consider the

Correct AnswerverifiedShow Answer

In the United States in 2011, the bottom fifth of the income distribution had incomes below $27,218.

Correct AnswerverifiedShow Answer

Ms. Spring currently earns $100,000 a year, while her junior partner, Mr. Fall, earns $55,000 a year. From the perspective of a utilitarian, if both of their incomes are subject to diminishing marginal utility, taking a dollar from Ms. Spring and giving it to Mr. Fall will

Correct AnswerverifiedShow Answer

Over the past 50 years, the U.S. poverty rate was at its lowest level in

Correct AnswerverifiedShow Answer

Which of the following is an advantage of an in-kind transfer in comparison to a cash payment?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 20-5 Distribution of Income in Umakastan -Refer to Table 20-5. Where would the government of Umakastan have to set the poverty line to have a poverty rate of about 28%?

Correct AnswerverifiedShow Answer

The percentage of families with incomes below the poverty line

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified