Question 1

Since the minimum food budget used to determine the poverty line is not adjusted for changes in the standard of living, it is, in principle:

Accepted Answer

A) an absolute measure of poverty. 
B) a relative measure of poverty. 
C) an inaccurate measure of poverty. 
D) an optimal measure of poverty. 
A) an absolute measure of poverty. 
B) a relative measure of poverty. 
C) an inaccurate measure of poverty. 
D) an optimal measure of poverty.

Question 2

For the purpose of determining whether a family is officially considered to be living in poverty, poverty figures do not include:

Accepted Answer

A) after-tax income of the poor. 
B) food stamps. 
C) earned income. 
D) profits of a small business owner. 
A) after-tax income of the poor. 
B) food stamps. 
C) earned income. 
D) profits of a small business owner.

Question 3

SNAP provides:

Accepted Answer

A) financial assistance to needy families with children under age 19. 
B) nutritional assistance, often in the form of coupons redeemable at food stores. 
C) medical assistance for the poor, paid for by the individual states. 
D) assistance to poor people when emergencies arise that aren't taken care of by any of the other programs. 
A) financial assistance to needy families with children under age 19. 
B) nutritional assistance, often in the form of coupons redeemable at food stores. 
C) medical assistance for the poor, paid for by the individual states. 
D) assistance to poor people when emergencies arise that aren't taken care of by any of the other programs.

Question 4

What are the distributive consequences of each of the following taxes: the U.S.income taxes,sales taxes,and property taxes? Are they progressive,regressive,or proportional?

Accepted Answer

Income taxes (federal,state,an

Question 5

Refer to the graph shown.   The bottom 20 percent of the families earn:

Accepted Answer

A) 6.6 percent of the income. 
B) 17.3 percent of the income. 
C) 10.7 percent of the income. 
D) 20 percent of the income. 
A) 6.6 percent of the income. 
B) 17.3 percent of the income. 
C) 10.7 percent of the income. 
D) 20 percent of the income.

Question 6

Poverty is defined by the U.S. government as having an income equal to or less than three times an average family's minimum food expenditure as calculated by the U.S. Department of Agriculture.

Accepted Answer

A) True 
 B)False

Question 7

How does the Lorenz curve for the U.S.compare to the Lorenz curve for most developing and developed countries? What does this mean?

Accepted Answer

In the U.S. ,the Lorenz curve is closer

Question 8

The following diagram shows three Lorenz curves for countries A,B,and C.The area between the Lorenz curve and the diagonal is 1,000 for Country A,2,000 for Country B,and 2,500 for Country C.(The entire area under the diagonal is 5,000 because the area of the triangle is ½ × (base × height)= ½ × (100 × 100)= 5,000. )
(1)Calculate the Gini coefficient for each country.
(2)Based on the Gini coefficient,which country has the most equal distribution of income? Which country has the least?

Accepted Answer

(1)The Gini coefficient equals 1,000/5,0

Question 9

Refer to the graph shown.   A possible explanation for the difference between the distribution of income before taxes and the distribution of income after taxes shown in the graph is that the tax system:

Accepted Answer

A) is regressive. 
B) is proportional. 
C) is progressive. 
D) does not affect income inequality. 
A) is regressive. 
B) is proportional. 
C) is progressive. 
D) does not affect income inequality.

Question 10

What are the distributive consequences of the U.S.income taxes,the Social Security tax,sales taxes,and property taxes? (Are they progressive,proportional,or regressive?)

Accepted Answer

Income taxes (federal,state,and local)ar

Question 11

Which program has been very successful in keeping the elderly out of poverty?

Accepted Answer

A) Temporary Assistance for Needy Families 
B) The Department of Housing and Urban Development's housing programs 
C) Supplemental Security Income 
D) The Social Security system 
A) Temporary Assistance for Needy Families 
B) The Department of Housing and Urban Development's housing programs 
C) Supplemental Security Income 
D) The Social Security system

Question 12

A Lorenz curve is a geometric representation of the:

Accepted Answer

A) level of income earned by a given family in a given country at a given time. 
B) share distribution of income among families in a given country at a given time. 
C) behavior of income over time. 
D) behavior of income across countries. 
A) level of income earned by a given family in a given country at a given time. 
B) share distribution of income among families in a given country at a given time. 
C) behavior of income over time. 
D) behavior of income across countries.

Question 13

Refer to the graph shown.   The Lorenz curve showing the most income inequality is

Accepted Answer

A) A. 
B) B. 
C) C. 
D) D. 
A) A. 
B) B. 
C) C. 
D) D.

Question 14

Use the table below to answer the questions.
(a)Draw a Lorenz curve for countries A,B,and C in the table below.
(b)Which country has the least equal distribution of income? The most equal distribution?
 $$\begin{array}{c}
{ \text { Percent of Income } } \
\begin{array} { l l l l }

\text { Quirtile } & \text { A } & \text { B } & \text { C } \
\hline \text { Lowest } & 8.5 & 10.2 & 2.3 \
\text { fifth } & & & \
\text { Second } & 10.1 & 15.2 & 6.1 \
\text { fifth } & & & \
\text { Third fifth } & 12.5 & 18.3 & 12.3 \
\text { Fouth fifth } & 15.1 & 23.1 & 18.1 \
\text { Highest } & 53.8 & 33.2 & 61.2 \
\text { fifth } & & &
\end{array}\end{array}$$

Accepted Answer

(a)The Lorenz curves are shown

Question 15

Friedrich Nietzsche's views on income distribution and fairness can best be described by the statement:

Accepted Answer

A) The lesser individuals' duty should be to work for the well-being of the brightest individuals. 
B) A high level of income inequality is necessary to sustain the arts, beauty, education, and civilization. 
C) Society's goal should be to maximize the welfare of the least well-off, but some inequality is necessary to meet this goal. 
D) An efficiently operating marketplace will generate an equal distribution of income without government intervention. 
A) The lesser individuals' duty should be to work for the well-being of the brightest individuals. 
B) A high level of income inequality is necessary to sustain the arts, beauty, education, and civilization. 
C) Society's goal should be to maximize the welfare of the least well-off, but some inequality is necessary to meet this goal. 
D) An efficiently operating marketplace will generate an equal distribution of income without government intervention.

Question 16

Refer to the graph shown.   The Lorenz curve showing the most income equality is:

Accepted Answer

A) A. 
B) B. 
C) C. 
D) D. 
A) A. 
B) B. 
C) C. 
D) D.

Question 17

How has income distribution changed in the U.S.since 1929? When did inequality decrease and when did it increase?

Accepted Answer

Income inequality in

Question 18

Attempts to reduce income inequality may lead to greater income inequality.

Accepted Answer

A) True 
 B)False

Question 19

Economists often use a Lorenz curve to describe income distribution.What are two other approaches to the measurement of income distribution?

Accepted Answer

Besides the Lorenz curve,incom

Question 20

Which of the following statements contradicts the evidence shown in the graph shown?

Accepted Answer

A) Income is more equally distributed in Sweden than it is in Brazil. 
B) Income is more equally distributed in Taiwan than it is in the United States. 
C) Income is more equally distributed in Sweden than it is in Taiwan. 
D) Income is more equally distributed in the United States than it is in Brazil. 
A) Income is more equally distributed in Sweden than it is in Brazil. 
B) Income is more equally distributed in Taiwan than it is in the United States. 
C) Income is more equally distributed in Sweden than it is in Taiwan. 
D) Income is more equally distributed in the United States than it is in Brazil.

Exam 18: Who Gets What the Distribution of Income

Since the minimum food budget used to determine the poverty line is not adjusted for changes in the standard of living, it is, in principle:

For the purpose of determining whether a family is officially considered to be living in poverty, poverty figures do not include:

SNAP provides:

What are the distributive consequences of each of the following taxes: the U.S.income taxes,sales taxes,and property taxes? Are they progressive,regressive,or proportional?

Refer to the graph shown. The bottom 20 percent of the families earn:

Poverty is defined by the U.S. government as having an income equal to or less than three times an average family's minimum food expenditure as calculated by the U.S. Department of Agriculture.

How does the Lorenz curve for the U.S.compare to the Lorenz curve for most developing and developed countries? What does this mean?

Refer to the graph shown. A possible explanation for the difference between the distribution of income before taxes and the distribution of income after taxes shown in the graph is that the tax system:

What are the distributive consequences of the U.S.income taxes,the Social Security tax,sales taxes,and property taxes? (Are they progressive,proportional,or regressive?)

Which program has been very successful in keeping the elderly out of poverty?

A Lorenz curve is a geometric representation of the:

Refer to the graph shown. The Lorenz curve showing the most income inequality is

Friedrich Nietzsche's views on income distribution and fairness can best be described by the statement:

Refer to the graph shown. The Lorenz curve showing the most income equality is:

How has income distribution changed in the U.S.since 1929? When did inequality decrease and when did it increase?

Attempts to reduce income inequality may lead to greater income inequality.

Economists often use a Lorenz curve to describe income distribution.What are two other approaches to the measurement of income distribution?

Which of the following statements contradicts the evidence shown in the graph shown?

Economics and Economic Reasoning

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Supply and Demand

Using Supply and Demand

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