Question 1

The income level below which families are considered to be in poverty is the

Accepted Answer

The poverty threshold is the official measure used to determine the income level below which a family is considered to be living in poverty. It varies by family size and composition.

Question 2

In a negative income tax program,

Accepted Answer

A negative income tax program is designed to ensure that families have a minimum level of income by providing financial assistance from the government, which supplements their earnings to reach a certain threshold.

Question 3

Suppose a negative income tax program is established at 25 percent, and a poverty threshold minimum of $15,000 is guaranteed for a family of four. If no income is earned by this family, its total income would equal

Accepted Answer

Under a negative income tax program with a 25 percent rate and a $15,000 poverty threshold, a family of four earning no income would receive $15,000 to meet the threshold.

Question 4

Suppose a negative income tax program is established at 25 percent, and a poverty threshold minimum of $15,000 is guaranteed for a family of four. If the family earns $10,000 through working, its total income would equal

Accepted Answer

The answer of Suppose a negative income tax program is...

Question 5

Suppose a negative income tax program is established at 25 percent, and a poverty threshold minimum of $15,000 is guaranteed for a family of four. What is the highest income a family could earn in the workplace before being cut out of the governmentprogram?

Accepted Answer

The answer of Suppose a negative income tax program is...

Question 6

Suppose a negative income tax program is established at 25 percent, and a povertythreshold minimum of $15,000 is guaranteed for a family of four. If this family earned $50,000 in the workplace, the government payment to the family under this programwould equal

Accepted Answer

The answer of Suppose a negative income tax program is...

Question 7

Which of the following is an economic argument that supports income inequality?

Accepted Answer

Income inequality can be supported by the argument that people's incomes should reflect their contribution to society, suggesting that differences in income are justified by differences in effort, skill, or responsibility.

Question 8

Suppose Fred's marginal utility of an extra dollar of income is 56, and Sally's is 34. If a dollar is taken from

Accepted Answer

When a dollar is taken from Sally and given to Fred, Fred's utility increases by 56, and Sally's utility decreases by 34. The net increase in utility is 56 - 34 = 22 units.

Question 9

The poor in the United States are disproportionately people who

Accepted Answer

People with less than a high school education often have limited job opportunities and lower earning potential, contributing to higher poverty rates among this group.

Question 10

A Lorenz curve based on the percentage of wealth held by different quintiles of the population, when compared to one based on income shares, shows a

Accepted Answer

Wealth distribution typically exhibits a higher degree of inequality than income distribution. This is because wealth can accumulate over generations and is often concentrated in the hands of a smaller percentage of the population, whereas income is more broadly distributed across the workforce.

Question 11

Consider two countries, A and B. Country A has a more egalitarian distribution ofincomes if

Accepted Answer

A lower Gini coefficient indicates a more equal distribution of income, which means country A is more egalitarian if its Gini coefficient is lower than that of country B.

Question 12

The U.S. Gini coefficient shows that income inequality

Accepted Answer

The U.S. Gini coefficient, which measures income inequality, remained fairly stable during the 1970s but then began to increase steadily through the 1980s and 1990s, reflecting a growing disparity in income distribution.

Question 13

A case for equality of income distribution can be based on

Accepted Answer

The randomness of personal misfortune supports the case for income equality as it highlights that individuals may face hardships beyond their control, justifying a more equitable distribution of income to mitigate these effects.

Question 14

Philosopher John Rawls's theory of justice presents an argument in favor of income equality that relies on the

Accepted Answer

Rawls's theory of justice, particularly the idea of the "original position" and the "veil of ignorance," suggests that people would choose a system of income distribution that minimizes the risks of being worst off, favoring a more equal distribution of income to ensure a fairer society. This is because, under the veil of ignorance, individuals do not know their place in society and would prefer a system that guarantees a decent minimum standard of living for all, rather than risking being in a disadvantaged position.

Question 15

Which of the following statements is true about the Marxist's argument in favor of an egalitarian income distribution?

Accepted Answer

Marxists argue that private property, which they believe originates from theft or exploitation, is a fundamental cause of income inequality. This perspective is rooted in the belief that the accumulation of private property by a few leads to an unequal distribution of wealth and resources in society.

Question 16

Economist A. P. Lerner's idea that equality of income maximizes society's welfare is based on the assumption that

Accepted Answer

Lerner's idea is based on the assumption that individuals have identical utility functions, meaning that each additional unit of income would provide the same marginal utility to any individual, thus maximizing overall welfare through equal distribution.

Question 17

According to many economists who emphasize the connection between productive contribution and economic reward, income inequality

Accepted Answer

Economists who emphasize the connection between productive contribution and economic reward argue that income inequality can incentivize individuals to work harder and innovate, potentially leading to economic growth that benefits everyone, including the poor, in the long run.

Question 18

According to economists who emphasize the connection between productive contribution and economic reward, a more equal income distribution

Accepted Answer

Economists who focus on the link between productive contribution and economic reward often argue that a more equal income distribution can lead to inefficiency by reducing incentives for individuals to work harder or innovate, as rewards are not aligned with contributions.

Question 19

The definition of poverty that is based on percentage of median income recognizes that

Accepted Answer

The definition of poverty based on a percentage of median income is inherently relative, as it measures poverty in relation to the overall income distribution of a society, rather than using an absolute threshold.

Question 20

Which one of the following is not true about poverty in the United States?

Accepted Answer

The answer of Which one of the following is not...

Quiz 18: Income Distribution and Poverty

The income level below which families are considered to be in poverty is the

In a negative income tax program,

Suppose a negative income tax program is established at 25 percent, and a poverty threshold minimum of $15,000 is guaranteed for a family of four. If no income is earned by this family, its total income would equal

Suppose a negative income tax program is established at 25 percent, and a poverty threshold minimum of $15,000 is guaranteed for a family of four. If the family earns $10,000 through working, its total income would equal

Suppose a negative income tax program is established at 25 percent, and a poverty threshold minimum of $15,000 is guaranteed for a family of four. What is the highest income a family could earn in the workplace before being cut out of the governmentprogram?

Suppose a negative income tax program is established at 25 percent, and a povertythreshold minimum of $15,000 is guaranteed for a family of four. If this family earned $50,000 in the workplace, the government payment to the family under this programwould equal

Which of the following is an economic argument that supports income inequality?

Suppose Fred's marginal utility of an extra dollar of income is 56, and Sally's is 34. If a dollar is taken from

The poor in the United States are disproportionately people who

A Lorenz curve based on the percentage of wealth held by different quintiles of the population, when compared to one based on income shares, shows a

Consider two countries, A and B. Country A has a more egalitarian distribution ofincomes if

The U.S. Gini coefficient shows that income inequality

A case for equality of income distribution can be based on

Philosopher John Rawls's theory of justice presents an argument in favor of income equality that relies on the

Which of the following statements is true about the Marxist's argument in favor of an egalitarian income distribution?

Economist A. P. Lerner's idea that equality of income maximizes society's welfare is based on the assumption that

According to many economists who emphasize the connection between productive contribution and economic reward, income inequality

According to economists who emphasize the connection between productive contribution and economic reward, a more equal income distribution

The definition of poverty that is based on percentage of median income recognizes that

Which one of the following is not true about poverty in the United States?