Question 1

Suppose income was equally distributed across all families, then:

Accepted Answer

A)   60 per cent of the families would receive exactly 60 per cent of the income
B)   the relative share of income would decline as the number of families are increased
C)   the relative share of income would increase as the number of families are increased
D)   all families would more likely be rich than poorE) None of the above
F) B) and D)

Question 2

Do Libertarians and Rawlsian liberals agree that governments should redistribute income? Briefly explain your answer.

Accepted Answer

No, a Rawlsian liberal would support som...

Question 3

Opponents of legislation that proposes to limit the time a family can receive welfare benefits are most likely to argue that time limits are undesirable because:

Accepted Answer

A)   children will become innocent victims if parents are forced off welfare
B)   the money saved will be diverted to defence spending
C)   long periods on welfare erode work skills
D)   there is no evidence to suggest a pattern of welfare dependencyE) A) and C)
F) All of the above

Question 4

Under a negative income tax, it is likely for a person who does not earn income to receive assistance from the government.

Accepted Answer

A) True 
 B)False

Question 5

The maximin criterion suggests that the focus of social policy would be to:

Accepted Answer

A)   elevate the wellbeing of all workers
B)   elevate the wellbeing of those at the bottom of the income distribution
C)   ensure an egalitarian distribution of income
D)   expropriate the factors of production from the capitalist classE) B) and C)
F) A) and D)

Question 6

The political philosophy according to which the government should choose policies that maximise the total utility of everyone in society is called:

Accepted Answer

A)   utilitarianism
B)   utility maximisation
C)   libertarianism
D)   rawlsianismE) None of the above
F) All of the above

Question 7

Economic mobility refers to the:

Accepted Answer

A)   ability of families to freely relocate to find good jobs
B)   movement of resources from one industry to another
C)   government's attempt to distribute monetary assistance to areas most in need
D)   movement of people among income classesE) A) and B)
F) B) and D)

Question 8

The income distribution in a society is:

Accepted Answer

A)   mostly determined by government taxation policies
B)   mostly determined by rental income
C)   mostly determined by the geographical location of taxpayers
D)   mostly determined by factors that determine wagesE) B) and C)
F) A) and C)

Question 9

Many policies to help the poor are effective at encouraging the poor to escape from poverty.

Accepted Answer

A) True 
 B)False

Question 10

Evidence suggests that:

Accepted Answer

A)   the best way to deter immigrants is to make legal aliens ineligible for many welfare benefits
B)   legislation designed to limit the time a family can be on welfare will never be passed
C)   welfare dependency is embraced by over 80 per cent of new welfare recipients
D)   the longer a family is on welfare, the harder it is to get off welfareE) None of the above
F) B) and C)

Question 11

Assume that the government proposes a negative income tax that calculates taxes owed by the formula TAXES OWED = (1/3 * INCOME) - $20 000. Compute the tax that would be owed given each of the following levels of income.
a. $180 000
b. $120 000
c. $60 000
d. $30 000
e. zero

Accepted Answer

a. $40 000
b. $20 00...

Question 12

Because people can borrow when they are young, the life cycle theory would suggest that a standard of living depends on:

Accepted Answer

A)   aggregate income rather than annual personal income
B)   income averaged across seasons rather than across years
C)   annual extended family income rather than annual personal income
D)   lifetime income rather than annual incomeE) C) and D)
F) B) and D)

Question 13

Suppose the government proposes a negative income tax that calculates taxes owed according to the formula TAXES OWED = (1/2 * INCOME)  - $5000. A family that earns an income of $30 000 will:

Accepted Answer

A)   pay a tax of $10 000
B)   receive an income subsidy of $10 000
C)   neither pay taxes nor receive an income subsidy
D)   pay $15 000 in taxesE) C) and D)
F) A) and C)

Question 14

A school voucher system introduced in the United States has lead to:

Accepted Answer

A)   less low income households sending their children to private schools
B)   more low income households sending their children to private schools
C)   no change in the number of low income households sending their children to private schools
D)   decrease in the number of private school schoolsE) All of the above
F) A) and B)

Question 15

Out of the following countries, the share of total income going to the richest fifth of the population is highest in:

Accepted Answer

A)   Australia
B)   Japan
C)   USA
D)   BrazilE) None of the above
F) B) and C)

Question 16

Political philosophers agree in their views about the role of government in altering the distribution of income.

Accepted Answer

A) True 
 B)False

Question 17

Explain the concept of diminishing marginal utility and describe the role that it plays in the utilitarian argument for redistribution of income.

Accepted Answer

In this context, diminishing marginal ut...

Question 18

The concept of utility is fundamental to utilitarianism and describes the:

Accepted Answer

A)   method whereby wealth is stored
B)   method by which society chooses to allocate resources
C)   optimal distribution of wealth in society
D)   level of satisfaction derived from a person's circumstancesE) A) and B)
F) B) and D)

Question 19

The invisible hand of the marketplace acts to allocate resources efficiently as well as equitably.

Accepted Answer

A) True 
 B)False

Question 20

What is meant by a perfectly equal distribution of income? Use a graph to depict such a situation.

Accepted Answer

If income were equally distributed acros...

Exam 21: Income Inequity and Poverty

The maximin criterion suggests that the focus of social policy would be to:

Correct AnswerverifiedShow Answer

The political philosophy according to which the government should choose policies that maximise the total utility of everyone in society is called:

Correct AnswerverifiedShow Answer

Political philosophers agree in their views about the role of government in altering the distribution of income.

Correct AnswerverifiedShow Answer

Do Libertarians and Rawlsian liberals agree that governments should redistribute income? Briefly explain your answer.

Correct AnswerverifiedNo, a Rawlsian liberal would support som...View AnswerShow Answer

Many policies to help the poor are effective at encouraging the poor to escape from poverty.

Correct AnswerverifiedShow Answer

Suppose the government proposes a negative income tax that calculates taxes owed according to the formula TAXES OWED = (1/2 * INCOME) - $5000. A family that earns an income of $30 000 will:

Correct AnswerverifiedShow Answer

A school voucher system introduced in the United States has lead to:

Correct AnswerverifiedShow Answer

Under a negative income tax, it is likely for a person who does not earn income to receive assistance from the government.

Correct AnswerverifiedShow Answer

Explain the concept of diminishing marginal utility and describe the role that it plays in the utilitarian argument for redistribution of income.

Correct AnswerverifiedIn this context, diminishing marginal ut...View AnswerShow Answer

Out of the following countries, the share of total income going to the richest fifth of the population is highest in:

Correct AnswerverifiedShow Answer

Opponents of legislation that proposes to limit the time a family can receive welfare benefits are most likely to argue that time limits are undesirable because:

Correct AnswerverifiedShow Answer

Assume that the government proposes a negative income tax that calculates taxes owed by the formula TAXES OWED = (1/3 * INCOME) - $20 000. Compute the tax that would be owed given each of the following levels of income. a. $180 000 b. $120 000 c. $60 000 d. $30 000 e. zero

Correct Answerverifieda. $40 000b. $20 00...View AnswerShow Answer

What is meant by a perfectly equal distribution of income? Use a graph to depict such a situation.

Correct AnswerverifiedIf income were equally distributed acros...View AnswerShow Answer

Evidence suggests that:

Correct AnswerverifiedShow Answer

Economic mobility refers to the:

Correct AnswerverifiedShow Answer

Because people can borrow when they are young, the life cycle theory would suggest that a standard of living depends on:

Correct AnswerverifiedShow Answer

The invisible hand of the marketplace acts to allocate resources efficiently as well as equitably.

Correct AnswerverifiedShow Answer

Suppose income was equally distributed across all families, then:

Correct AnswerverifiedShow Answer

The income distribution in a society is:

Correct AnswerverifiedShow Answer

The concept of utility is fundamental to utilitarianism and describes the:

Correct AnswerverifiedShow Answer

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No, a Rawlsian liberal would support som...
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In this context, diminishing marginal ut...
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a. $40 000
b. $20 00...
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If income were equally distributed acros...
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