Question 1

In the trade-off between equality and economic efficiency,an increase in equality will lead to a decrease in efficiency.

Accepted Answer

A) True 
 B)False

Question 2

Using the data in the above table,what percentage should be reported in blank B of column 2?

Accepted Answer

A)   6
B)   16
C)   21
D)   25The first step is to identify "C." C is the cumulative percentage of the previous class shown in column 3.It is found by adding the percentage in the relevant class (column 2) to the prior cumulative percentage (column 3) .C = 35 + 16 = 51.The blank in column 2 is then found by subtracting the cumulative percentage in column 3 for the entry $50,000-$74,999 from that in the previous class.B = 72 - 51 = 21.E) A) and C)
F) B) and C)

Question 3

Which statement is correct?

Accepted Answer

A)   The Social Security Act requires all employers to insure their workers against industrial accidents and diseases.
B)   The poor have gotten richer and the rich have gotten poorer in the United States;that is,the degree of income inequality has decreased.
C)   over 90 percent of the workers in the United States are currently covered by Social Security.
D)   about one-fifth of our population is now classified as living in poverty.E) A) and C)
F) None of the above

Question 4

"A more equal distribution of income in the United States would result in greater total consumer satisfaction." This statement is based on the concept that:

Accepted Answer

A)   income inequality is unfair.
B)   income inequality is undemocratic.
C)   income equality stimulates efficiency.
D)   incomes are subject to diminishing marginal utility.E) B) and C)
F) A) and D)

Question 5

The Bureau of Census data on income distribution in the United States take into account trends in lifetime income.

Accepted Answer

A) True 
 B)False

Question 6

The Lorenz curve is helpful in visualizing the:

Accepted Answer

A)   trade-off between unemployment and inflation.
B)   relationship between the prices received and paid by farmers.
C)   degree of inequality in the distribution of income.
D)   relationship between education and income.E) B) and C)
F) None of the above

Question 7

Since its inception in 1996,the Temporary Assistance for Needy Families (TANF) program has:

Accepted Answer

A)   increased,rather than reduced,the number of people on welfare.
B)   reduced the number of people on welfare by more than one-half.
C)   aided the poor by automatically increasing welfare payments when inflation occurs.
D)   greatly increased the unemployment rate.E) A) and B)
F) All of the above

Question 8

Earnings from wealth:

Accepted Answer

A)   contribute to income inequality.
B)   are the major source of family income.
C)   are becoming more equal in the society.
D)   are primarily the result of advanced education.E) A) and B)
F) C) and D)

Question 9

Suppose Rita obtains 10 units of utility from the last dollar of income she receives and David obtains 6 units of utility from his last dollar of income.Assume both David and Rita have the same capacity to derive utility from income with identical marginal-utility-of-income-curves.Those who favor an equal distribution of income would:

Accepted Answer

A)   advocate redistributing income from David to Rita.
B)   advocate redistributing income from Rita to David.
C)   be content with this distribution of income between Rita and David.
D)   argue that any redistribution of income between them would increase total utility.E) All of the above
F) A) and C)

Question 10

Refer to the above diagrams that show identical marginal utility from income curves for Singer and Catalano.If a given income of $20,000 is initially distributed so that Singer receives $15,000 and Catalano $5000,the marginal utility:

Accepted Answer

A)   of the last dollar of income will be greater for Catalano than for Singer.
B)   derived from the last dollar will not be comparable between the two income receivers.
C)   of the last dollar of income will be the same for both Singer and Catalano.
D)   of the last dollar of income will be greater for Singer than for Catalano.E) A) and B)
F) A) and C)

Question 11

The percentage of total before-tax income received by the lowest 20 percent of households in 2009 was about:

Accepted Answer

A)   1.8 percent.
B)   3.4 percent.
C)   8.7 percent.
D)   22.9 percent.E) B) and C)
F) None of the above

Question 12

Which of the following Gini ratios would indicate the least amount of income inequality?

Accepted Answer

A)   0.20
B)   0.40
C)   0.60
D)   0.80E) A) and B)
F) A) and C)

Question 13

A cause of the unequal distribution of income in the United States is:

Accepted Answer

A)   differences in preferences and risks.
B)   differences in noncash transfers.
C)   high expenditures for social insurance.
D)   a low benefit-reduction rate for income.E) A) and B)
F) B) and C)

Question 14

The Temporary Assistance for Needy Families (TANF) program:

Accepted Answer

A)   put a limit on receiving welfare payments and required able-bodied adults to work after receiving assistance for two years.
B)   increased the number of people receiving welfare benefits and the amount of the assistance.
C)   required businesses to monitor low-income workers and used federal funds to supplement their pay.
D)   required the use of food stamps for food purchases by families but permitted cash assistance to be given to the elderly.E) None of the above
F) B) and D)

Question 15

Of the following groups,which had the highest incidence of poverty in 2009?

Accepted Answer

A)   Whites
B)   Hispanics
C)   Children under 18
D)   Persons 65 or olderE) A) and B)
F) A) and D)

Question 16

Medicaid:

Accepted Answer

A)   helps finance medical expenses for those participating in the TANF and Supplemental Security Income programs.
B)   has been abandoned in favor of privately provided medical insurance.
C)   is a program of medical insurance for the aged and retired.
D)   is a compulsory national health insurance program that covers all adult Americans.E) None of the above
F) All of the above

Question 17

Suppose that Teresa Thomas obtains 12 units of utility from the last dollar of income she receives,while Richard Voote obtains 7 units of utility from the last dollar of his income.Both have identical marginal-utility-of-income-curves.Those who:

Accepted Answer

A)   favor an equal distribution of income would advocate redistributing income from Richard to Teresa.
B)   favor an equal distribution of income would advocate redistributing income from Teresa to Richard.
C)   favor an equal distribution of income would be content with the distribution of income between Teresa and Richard.
D)   do not favor an equal distribution of income would argue that any redistribution between Teresa and Richard would increase total utility.E) B) and C)
F) All of the above

Question 18

Suppose that Jane earns $10,000 in year 1 and $100,000 in year 2,while Jim earns $100,000 in year 1 and $10,000 in year 2.Is there income equality for the two individuals?

Accepted Answer

A)   The annual data indicate equality,but the two-year data indicate inequality.
B)   The annual data indicate inequality,but the two-year data indicate equality.
C)   Both the annual and the two-year data indicate equality.
D)   Both the annual and the two-year data indicate inequality.E) None of the above
F) A) and C)

Exam 11: Income Inequality and Poverty

Which statement is correct?

Correct Answer
verified

Earnings from wealth:

Correct Answer
verified

In the trade-off between equality and economic efficiency,an increase in equality will lead to a decrease in efficiency.

Correct Answer
verified

"A more equal distribution of income in the United States would result in greater total consumer satisfaction." This statement is based on the concept that:

Correct Answer
verified

Since its inception in 1996,the Temporary Assistance for Needy Families (TANF) program has:

Correct Answer
verified

Medicaid:

Correct Answer
verified

Suppose that Jane earns $10,000 in year 1 and $100,000 in year 2,while Jim earns $100,000 in year 1 and $10,000 in year 2.Is there income equality for the two individuals?

Correct Answer
verified

The Bureau of Census data on income distribution in the United States take into account trends in lifetime income.

Correct Answer
verified

Which of the following Gini ratios would indicate the least amount of income inequality?

Correct Answer
verified

The Temporary Assistance for Needy Families (TANF) program:

Correct Answer
verified

Refer to the above diagrams that show identical marginal utility from income curves for Singer and Catalano.If a given income of $20,000 is initially distributed so that Singer receives $15,000 and Catalano $5000,the marginal utility:

Correct Answer
verified

The percentage of total before-tax income received by the lowest 20 percent of households in 2009 was about:

Correct Answer
verified

Of the following groups,which had the highest incidence of poverty in 2009?

Correct Answer
verified

Using the data in the above table,what percentage should be reported in blank B of column 2?

Correct Answer
verified

A cause of the unequal distribution of income in the United States is:

Correct Answer
verified

The Lorenz curve is helpful in visualizing the:

Correct Answer
verified

Suppose that Teresa Thomas obtains 12 units of utility from the last dollar of income she receives,while Richard Voote obtains 7 units of utility from the last dollar of his income.Both have identical marginal-utility-of-income-curves.Those who:

Correct Answer
verified

Correct Answer
verified

Exam 11: Income Inequality and Poverty

Which statement is correct?

Correct AnswerverifiedShow Answer

Earnings from wealth:

Correct AnswerverifiedShow Answer

In the trade-off between equality and economic efficiency,an increase in equality will lead to a decrease in efficiency.

Correct AnswerverifiedShow Answer

"A more equal distribution of income in the United States would result in greater total consumer satisfaction." This statement is based on the concept that:

Correct AnswerverifiedShow Answer

Since its inception in 1996,the Temporary Assistance for Needy Families (TANF) program has:

Correct AnswerverifiedShow Answer

Medicaid:

Correct AnswerverifiedShow Answer

Suppose that Jane earns $10,000 in year 1 and $100,000 in year 2,while Jim earns $100,000 in year 1 and $10,000 in year 2.Is there income equality for the two individuals?

Correct AnswerverifiedShow Answer

The Bureau of Census data on income distribution in the United States take into account trends in lifetime income.

Correct AnswerverifiedShow Answer

Which of the following Gini ratios would indicate the least amount of income inequality?

Correct AnswerverifiedShow Answer

The Temporary Assistance for Needy Families (TANF) program:

Correct AnswerverifiedShow Answer

Refer to the above diagrams that show identical marginal utility from income curves for Singer and Catalano.If a given income of $20,000 is initially distributed so that Singer receives $15,000 and Catalano $5000,the marginal utility:

Correct AnswerverifiedShow Answer

The percentage of total before-tax income received by the lowest 20 percent of households in 2009 was about:

Correct AnswerverifiedShow Answer

Of the following groups,which had the highest incidence of poverty in 2009?

Correct AnswerverifiedShow Answer

Using the data in the above table,what percentage should be reported in blank B of column 2?

Correct AnswerverifiedShow Answer

A cause of the unequal distribution of income in the United States is:

Correct AnswerverifiedShow Answer

The Lorenz curve is helpful in visualizing the:

Correct AnswerverifiedShow Answer

Suppose that Teresa Thomas obtains 12 units of utility from the last dollar of income she receives,while Richard Voote obtains 7 units of utility from the last dollar of his income.Both have identical marginal-utility-of-income-curves.Those who:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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