Question 1

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 B)
F) A) and C)

Question 2

The poverty rate is the percentage of the population whose family income falls below an absolute level called the .

Accepted Answer

The answer of The poverty rate is the percentage of...

Question 3

Since 1970 the United States' income distribution has become more equal.

Accepted Answer

A) True 
 B)False

Question 4

Suppose the government used the following formula to compute a family's tax liability: Taxes owed = 28% of income - $8,000. How much would a family that earned $20,000 owe?

Accepted Answer

A)   -$8,000
B)   -$2,400
C)   $0
D)   $2,400E) B) and D)
F) All of the above

Question 5

Suppose the government used the following formula to compute a family's tax liability: Taxes owed = 28% of income - $8,000. How much would a family have to earn to owe $0 in taxes?

Accepted Answer

A)   $8,000
B)   $16,283
C)   $28,571
D)   $30,694E) A) and D)
F) A) and C)

Question 6

Table 20-1
The following table shows the distribution of income in Marysville. 
-Refer to Table 20-1. Fifty percent of all families have incomes below what level?

Accepted Answer

A)   $30,000
B)   $60,000
C)   $90,000
D)   There is insufficient information to answer this question.E) B) and D)
F) B) and C)

Question 7

Table 20-5
Distribution of Income in Umakastan 
-Refer to Table 20-5. Approximately what percentage of families in Umakastan have income levels below $74,000?

Accepted Answer

A)   27%
B)   28%
C)   52%
D)   79%E) A) and B)
F) B) and C)

Question 8

"The government should punish crimes and enforce voluntary agreements but not redistribute income." This statement is most closely associated with which political philosophy?

Accepted Answer

A)   liberalism
B)   utilitarianism
C)   libertarianism
D)   welfarismE) None of the above
F) All of the above

Question 9

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

Question 10

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) B) and C)
F) All of the above

Question 11

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 D)
F) A) and C)

Question 12

Table 20-4  Source: U.S. Bureau of Census
-Refer to Table 20-4. In 2011, the bottom 60% of families have

Accepted Answer

A)   about 13% of total income in the U.S.
B)   about 28% of total income in the U.S.
C)   about 51% of total income in the U.S.
D)   about 74% of total income in the U.S.E) B) and C)
F) A) and D)

Question 13

The concept of utility is fundamental to utilitarianism and describes the

Accepted Answer

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

Question 14

Data for the United States suggests that about how many millionaires inherited their fortunes?

Accepted Answer

A)   one in seven
B)   one in five
C)   one in three
D)   one in twoE) B) and C)
F) A) and D)

Question 15

In 2011, the poverty line for a family of four in the U.S. was

Accepted Answer

A)   $60,974.
B)   $23,021.
C)   $20,988.
D)   $17,642.E) C) and D)
F) A) and B)

Question 16

In 2011, the poverty rate in the United States was 15 percent. This means that 15 percent

Accepted Answer

A)   of the population had a total family income that fell below the poverty line.
B)   of the population had a total family income that was above the poverty line.
C)   of the population had a total family income below $10,000.
D)   of the population had a total family income above $50,000.E) C) and D)
F) A) and C)

Question 17

U.S. income data over the last 75 years suggests that the distribution of income

Accepted Answer

A)   has gradually become more equal over the entire time period.
B)   has gradually become less equal over the entire time period.
C)   gradually became less equal until about 1970, then became more equal from 1970 to 2011.
D)   gradually became more equal until about 1970, then became less equal from 1970 to 2011.E) A) and C)
F) A) and D)

Question 18

Table 20-2
Percentage of Before-Tax Income Received by Families in Hapland 
-Refer to Table 20-2. According to the table, from 1950 to 2000, the Hapland income distribution became

Accepted Answer

A)   less equal.
B)   more equal.
C)   more equal at the lowest level of income but less equal at highest level of income.
D)   less equal at the lowest level of income but more equal at highest level of income.E) B) and C)
F) A) and D)

Question 19

Economists who study economic mobility have found that the income of a grandfather and his grandson's income are

Accepted Answer

A)   not closely related.
B)   negatively related.
C)   directly related.
D)   equal.E) A) and B)
F) B) and C)

Question 20

Which political philosophy concludes that equality of opportunities is more important than equality of outcomes?

Accepted Answer

The answer of Which political philosophy concludes that equality of...

Exam 20: Income Inequality and Poverty

Table 20-4 Source: U.S. Bureau of Census -Refer to Table 20-4. In 2011, the bottom 60% of families have

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The concept of utility is fundamental to utilitarianism and describes the

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Table 20-1 The following table shows the distribution of income in Marysville. -Refer to Table 20-1. Fifty percent of all families have incomes below what level?

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In 2011, the poverty rate in the United States was 15 percent. This means that 15 percent

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Which of the following statements is not correct?

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Economists who study economic mobility have found that the income of a grandfather and his grandson's income are

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Table 20-5 Distribution of Income in Umakastan -Refer to Table 20-5. Approximately what percentage of families in Umakastan have income levels below $74,000?

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In 2011, the poverty line for a family of four in the U.S. was

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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?

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Since 1970 the United States' income distribution has become more equal.

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Data for the United States suggests that about how many millionaires inherited their fortunes?

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U.S. income data over the last 75 years suggests that the distribution of income

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The poverty rate is the percentage of the population whose family income falls below an absolute level called the .

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Which political philosophy concludes that equality of opportunities is more important than equality of outcomes?

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"The government should punish crimes and enforce voluntary agreements but not redistribute income." This statement is most closely associated with which political philosophy?

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Table 20-2 Percentage of Before-Tax Income Received by Families in Hapland -Refer to Table 20-2. According to the table, from 1950 to 2000, the Hapland income distribution became

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

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Suppose the government used the following formula to compute a family's tax liability: Taxes owed = 28% of income - $8,000. How much would a family have to earn to owe $0 in taxes?

Correct AnswerverifiedShow Answer

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

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Suppose the government used the following formula to compute a family's tax liability: Taxes owed = 28% of income - $8,000. How much would a family that earned $20,000 owe?

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