Question 1

Liberalism is the political philosophy espoused by

Accepted Answer

A)  Robert Nozick.
B)  John Stuart Mill.
C)  John Rawls.
D)  Jeremy Bentham.E) A) and D)
F) C) and D)

Question 2

Scenario 20-5
Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability:
Taxes owed = (1/4 of income)  - $10,000
-Refer to Scenario 20-5. A family earning $70,000 before taxes would have how much after-tax income?

Accepted Answer

A)  $7,500
B)  $52,500
C)  $62,500
D)  $77,500E) A) and B)
F) A) and C)

Question 3

Table 20-12
Income Inequality in 2010 in the United States by Race
The values in the table reflect the percentages of pre-tax-and-transfer income.  Source: US Census Bureau
-Refer to Table 20-12. According to the information in the table, which race had the most income inequality in 2010?

Accepted Answer

A)  Asian
B)  Black
C)  Hispanic
D)  WhiteE) None of the above
F) B) and C)

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 $18,000 owe?

Accepted Answer

The answer of Suppose the government used the following formula...

Question 5

An income distribution may not give an accurate picture of the standard of living for the poor because it does not include in-kind transfers.

Accepted Answer

A) True 
 B)False

Question 6

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) None of the above
F) B) and C)

Question 7

Jermaine believes that it is important to maximize the well-being of the worst-off person in society. He believes in the principle called the .

Accepted Answer

The answer of Jermaine believes that it is important to...

Question 8

Scenario 20-7
Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability:
Taxes owed = (1/6 of income)  - $24,000
-Refer to Scenario 20-7. This negative income tax would guarantee what minimum level of income to every family?

Accepted Answer

A)  $24,000
B)  $50,000
C)  $144,000
D)  $150,000E) A) and C)
F) A) and D)

Question 9

What is the primary problem in comparing income inequality in the US with income inequality in other countries?

Accepted Answer

difference...

Question 10

Explain the relationship between labor earnings and the distribution of income.

Accepted Answer

A person's earnings depend on the supply...

Question 11

In 2011 the top 20% of income earners accounted for over 80% of all income received by United States' families.

Accepted Answer

A) True 
 B)False

Question 12

Figure 20-3 
-Refer to Figure 20-3. Which of the following best describes the poverty rates by age from 1965 to 2011?

Accepted Answer

A)  The poverty rates by age have declined for all age groups.
B)  The percentage of people living in poverty has consistently been highest for the elderly aged 65 and over and lowest for adults aged 18 to 64.
C)  The percentage of children under age 18 and the percentage of adults aged 18 to 64 have maintained a similar trend while the percentage of elderly aged 65 and over has decreased significantly.
D)  The poverty rates by age have increased for all age groups.E) A) and D)
F) B) and C)

Question 13

Which of the following programs to alleviate poverty would be most favored by philosopher Robert Nozick?

Accepted Answer

A)  a negative income tax
B)  an Earned Income Tax Credit (EIT
C)  
C)  an in-kind transfer program
D)  None of the programs would be favored by Nozick.E) C) and D)
F) All of the above

Question 14

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

Question 15

Liberals believe

Accepted Answer

A)  that the government should choose just policies as evaluated by an impartial observer behind a "veil of ignorance."
B)  in the assumption of diminishing marginal utility.
C)  that everyone in society should have equal utility.
D)  that the government should not redistribute income.E) B) and D)
F) A) and B)

Question 16

The typical economic life cycle illustrates how people tend to

Accepted Answer

A)  borrow more when they are younger and save more when they are middle-aged.
B)  earn their peak incomes immediately prior to the typical retirement age of 65.
C)  adjust their consumption based on changes in their transitory income.
D)  All of the above are correct.E) C) and D)
F) A) and C)

Question 17

The English philosophers Jeremy Bentham and John Stuart Mill founded the school of thought called

Accepted Answer

A)  liberalism.
B)  libertarianism.
C)  mobilism.
D)  utilitarianism.E) A) and D)
F) A) and C)

Question 18

In 2011, what percentage of U.S. families had income levels below $75,000?

Accepted Answer

A)  20 percent
B)  40 percent
C)  60 percent
D)  80 percentE) A) and B)
F) A) and C)

Question 19

With a minimum wage law, the workers who remain employed benefit from a .

Accepted Answer

The answer of With a minimum wage law, the workers...

Question 20

A government's policy of redistributing income makes the income distribution

Accepted Answer

A)  more equal, distorts incentives, alters behavior, and makes the allocation of resources more efficient.
B)  more equal, distorts incentives, alters behavior, and makes the allocation of resources less efficient.
C)  less equal, distorts incentives, alters behavior, and makes the allocation of resources more efficient.
D)  less equal, distorts incentives, alters behavior, and makes the allocation of resources less efficient.E) B) and C)
F) None of the above

Exam 20: Income Inequality and Poverty

A government's policy of redistributing income makes the income distribution

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Which of the following programs to alleviate poverty would be most favored by philosopher Robert Nozick?

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In 2011 the top 20% of income earners accounted for over 80% of all income received by United States' families.

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An income distribution may not give an accurate picture of the standard of living for the poor because it does not include in-kind transfers.

Correct AnswerverifiedShow Answer

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 $18,000 owe?

Correct AnswerverifiedShow Answer

Scenario 20-7 Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability: Taxes owed = (1/6 of income) - $24,000 -Refer to Scenario 20-7. This negative income tax would guarantee what minimum level of income to every family?

Correct AnswerverifiedShow Answer

In 2011, what percentage of U.S. families had income levels below $75,000?

Correct AnswerverifiedShow Answer

The English philosophers Jeremy Bentham and John Stuart Mill founded the school of thought called

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Explain the relationship between labor earnings and the distribution of income.

Correct AnswerverifiedA person's earnings depend on the supply...View AnswerShow Answer

What is the primary problem in comparing income inequality in the US with income inequality in other countries?

Correct Answerverifieddifference...View AnswerShow Answer

Figure 20-3 -Refer to Figure 20-3. Which of the following best describes the poverty rates by age from 1965 to 2011?

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Scenario 20-5 Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability: Taxes owed = (1/4 of income) - $10,000 -Refer to Scenario 20-5. A family earning $70,000 before taxes would have how much after-tax income?

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Table 20-12 Income Inequality in 2010 in the United States by Race The values in the table reflect the percentages of pre-tax-and-transfer income. Source: US Census Bureau -Refer to Table 20-12. According to the information in the table, which race had the most income inequality in 2010?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Jermaine believes that it is important to maximize the well-being of the worst-off person in society. He believes in the principle called the .

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The typical economic life cycle illustrates how people tend to

Correct AnswerverifiedShow Answer

With a minimum wage law, the workers who remain employed benefit from a .

Correct AnswerverifiedShow Answer

Liberals believe

Correct AnswerverifiedShow Answer

Liberalism is the political philosophy espoused by

Correct AnswerverifiedShow Answer

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A person's earnings depend on the supply...
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difference...
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