Chapter 20Income Inequality and Pov

Chapter 20
Income Inequality and Poverty
1. The percentage of families with incomes below the poverty line
a. is defined as the lowest 10 percent of households in terms of incomes in the United States.
b. is known as the poverty rate.
c. is known as the unemployment rate.
d. rises as the general income level rises.
ANSWER: b is known as the poverty rate.
SECTION: 1 OBJECTIVE: 1

2. The income level below which families are said to be poor is known as the
a. income maintenance threshold.
b. poverty line.
c. bottom quintile of the income distribution.
d. minimum wage.
ANSWER: b poverty line.
SECTION: 1 OBJECTIVE: 1
3. If the U.S. government determines that the cost of feeding an urban family of six is $6,000 per year, then the official poverty line for a family of that type is
a. $6,000.
b. $12,000.
c. $18,000.
d. $36,000.
ANSWER: c $18,000.
SECTION: 1 OBJECTIVE: 1
4. What two main factors have raised U.S. income inequality recently?
a. technical change and increased labor union membership
b. increased labor union membership and higher tax rates
c. technical change and expanded international trade
d. lower tax rates and expanded international trade
ANSWER: c technical change and expanded international trade
SECTION: 1 OBJECTIVE: 1
5. About what percent of all U.S. income goes to the top fifth of the income distribution?
a. 10%.
b. 25%
c. 47%
d. 63%
ANSWER: c 47%
SECTION: 1 OBJECTIVE: 1
6. About what percent of all U.S. income goes to the bottom fifth of the income distribution?
a. 10%
b. 8%
c. 6%
d. 4%
ANSWER: d 4%
SECTION: 1 OBJECTIVE: 1
7. In richer countries, the distribution of income tends to be __________ within poorer countries.
a. much less equal than
b. slightly less equal than
c. distributed about the same as
d. more equal than
ANSWER: d more equal than
SECTION: 1 OBJECTIVE: 1
8. Over the past 20 years, wages for college graduates __________ and wages for workers with less education __________.
a. rose; rose.
b. rose; fell.
c. fell; rose.
d. fell; fell
ANSWER: b rose; fell
SECTION: 1 OBJECTIVE: 1
9. Which of the following groups has the highest poverty rate?
a. black
b. Asian/Pacific Islander
c. children (under age 16)
d. female-headed household
ANSWER: d female-headed household
SECTION: 2 OBJECTIVE: 3
10. Medicaid and food stamps are
a. available only to the elderly.
b. forms of in-kind assistance.
c. forms of cash assistance.
d. transfer payments.
ANSWER: b forms of in-kind assistance.
SECTION: 1 OBJECTIVE: 2
11. Susan won big at the blackjack tables on her birthday. The money she won is considered to be
a. permanent income.
b. life-cycle income.
c. transitory income.
d. an in-kind transfer.
ANSWER: c transitory income.
SECTION: 1 OBJECTIVE: 2
12. Suppose Fred’s marginal utility of an extra dollar of income is 56 and Sally’s is 34. If a dollar is taken from
a. Sally and given to Fred, the economy’s total utility will rise by 22 units.
b. Fred and given to Sally, the economy’s total utility will rise by 22 units.
c. Sally and given to Fred, the economy’s total utility will rise by 34 units.
d. Sally and given to Fred, the economy’s total utility will rise by 56 units.
ANSWER: a Sally and given to Fred, the economy’s total utility will rise by 22 units.
SECTION: 2 OBJECTIVE: 3
13. According to a utilitarian, total social utility will be maximized when marginal dollars are distributed to the people with the
a. greatest need.
b. highest marginal utility of income.
c. highest total utility from their income.
d. most productive labor resources.
ANSWER: b highest marginal utility of income.
SECTION: 2 OBJECTIVE: 3
14. In a world where people would have no prior information about where they are in an income distribution, given the choice, Rawls argues that they would prefer
a. an income distribution that is relatively equal.
b. that everyone has the same work opportunities and market determined wage rates.
c. that private property be transformed to government property to safeguard their incomes.
d. less economic assistance to the poor because it distorts the price system.
ANSWER: a an income distribution that is relatively equal.
SECTION: 2 OBJECTIVE: 3
15. The philosopher John Rawls argued that
a. people would choose income equality if they had to determine an economic distribution system before knowing their place in it.
b. people would choose income inequality to allow the maximum use of their individual talents.
c. government has a role to ensure income equality to prevent social unrest.
d. people would choose income equality because it is morally right.
ANSWER: a people would choose income equality if they had to determine an economic distribution system before knowing their place in it.
SECTION: 1 OBJECTIVE: 1
16. According to a libertarian, if income were to be distributed equally
a. productivity would increase.
b. it would take a little time for the distribution to become unequal again.
c. the marginal product of the poor would rise and the marginal product of the rich would rise.
d. productivity in the economy would decrease.
ANSWER: d productivity in the economy would decrease.
SECTION: 2 OBJECTIVE: 3
17. The case for income inequality is supported by which of the following arguments?
a. personal misfortune being a random event
b. economic efficiency
c. Rawls’ maximin policy
d. Utilitarianism
ANSWER: b economic efficiency
SECTION: 2 OBJECTIVE: 3
18. Critics of utilitarianism say that it requires an impossible
a. belief in utility functions.
b. interpersonal comparison of utility.
c. ranking of people’s preferences across different goods.
d. analysis of marginal utility.
ANSWER: b interpersonal comparison of utility.
SECTION: 2 OBJECTIVE: 3
19. The poor in the United States are disproportionately people who
a. have less than a high school education.
b. have incomes that are essentially nonwage incomes.
c. are poor white women.
d. live in cities.
ANSWER: a have less than a high school education.
SECTION: 3 OBJECTIVE: 4
20. Price ceilings and minimum wages may increase poverty in the long run because they tend to
a. decrease the incentive to work among the poor.
b. increase the level of saving among the rich.
c. increase productivity of labor among the rich and poor.
d. promote investment activity by the rich.
ANSWER: a decrease the incentive to work among the poor.
SECTION: 1 OBJECTIVE: 1
21. Suppose a negative income tax program is established at 25 percent, and a poverty threshold minimum of $15,000 is guaranteed for a family of four. If no income is earned by this family, its total income would equal
a. $6,000.
b. $15,000.
c. $18,750.
d. $60,000.
ANSWER: b $15,000.
SECTION: 3 OBJECTIVE: 4
22. The incentive to work is an ingredient of the negative income tax because
a. if families do work, they will be eliminated from the program.
b. if families don’t work, they will be eliminated from the program.
c. the more income earned in the workplace, the higher the family’s after-tax income.
d. the amount earned in the workplace is not subject to income taxes.
ANSWER: c the more income earned in the workplace, the higher the family’s after-tax income.
SECTION: 3 OBJECTIVE: 4
23. A negative income tax system was designed to
a. provide in-kind benefits to the poor.
b. provide minimal income to the poor.
c. reduce taxes on the rich when their incomes surpass the maximum income tax bracket.
d. increase income payments to the poor specifically for housing payments.
ANSWER: b provide minimal income to the poor.
SECTION: 3 OBJECTIVE: 4
24. The main problem with a negative income tax system is that it
a. guarantees every household a minimum level of income.
b. causes excessive government meddling in people’s lives.
c. is too complex to administer fairly.
d. ignores the culture of poverty that produces less income.
ANSWER: d ignores he culture of poverty that produces less income.
SECTION: 3 OBJECTIVE: 4
25. Social security and unemployment insurance benefits are examples of
a. transfer payments.
b. negative income payments.
c. property income.
d. compensating differentials.
ANSWER: a transfer payments.
SECTION: 1 OBJECTIVE: 1

Chapter 20
Income Inequality and Poverty
1. The percentage of families with incomes below the poverty line
 a. is defined as the lowest 10 percent of households in terms of incomes in the United States.
 b. is known as the poverty rate.
 c. is known as the unemployment rate.
 d. rises as the general income level rises.
ANSWER: b is known as the poverty rate.
SECTION: 1 OBJECTIVE: 1
 
2. The income level below which families are said to be poor is known as the
 a. income maintenance threshold.
 b. poverty line.
 c. bottom quintile of the income distribution.
 d. minimum wage.
ANSWER: b poverty line.
SECTION: 1 OBJECTIVE: 1
3. If the U.S. government determines that the cost of feeding an urban family of six is $6,000 per year, then the official poverty line for a family of that type is
 a. $6,000.
 b. $12,000.
 c. $18,000.
 d. $36,000.
ANSWER: c $18,000.
SECTION: 1 OBJECTIVE: 1
4. What two main factors have raised U.S. income inequality recently?
 a. technical change and increased labor union membership
 b. increased labor union membership and higher tax rates
 c. technical change and expanded international trade
 d. lower tax rates and expanded international trade
ANSWER: c technical change and expanded international trade
SECTION: 1 OBJECTIVE: 1
5. About what percent of all U.S. income goes to the top fifth of the income distribution?
 a. 10%.
 b. 25%
 c. 47%
 d. 63%
ANSWER: c 47%
SECTION: 1 OBJECTIVE: 1
6. About what percent of all U.S. income goes to the bottom fifth of the income distribution?
 a. 10%
 b. 8%
 c. 6%
 d. 4%
ANSWER: d 4%
SECTION: 1 OBJECTIVE: 1
7. In richer countries, the distribution of income tends to be __________ within poorer countries.
 a. much less equal than
 b. slightly less equal than
 c. distributed about the same as
 d. more equal than
ANSWER: d more equal than
SECTION: 1 OBJECTIVE: 1
8. Over the past 20 years, wages for college graduates __________ and wages for workers with less education __________.
 a. rose; rose.
 b. rose; fell.
 c. fell; rose.
 d. fell; fell
ANSWER: b rose; fell
SECTION: 1 OBJECTIVE: 1
9. Which of the following groups has the highest poverty rate?
 a. black
 b. Asian/Pacific Islander
 c. children (under age 16)
 d. female-headed household
ANSWER: d female-headed household
SECTION: 2 OBJECTIVE: 3
10. Medicaid and food stamps are 
 a. available only to the elderly.
 b. forms of in-kind assistance.
 c. forms of cash assistance.
 d. transfer payments.
ANSWER: b forms of in-kind assistance.
SECTION: 1 OBJECTIVE: 2
11. Susan won big at the blackjack tables on her birthday. The money she won is considered to be
 a. permanent income.
 b. life-cycle income.
 c. transitory income.
 d. an in-kind transfer.
ANSWER: c transitory income.
SECTION: 1 OBJECTIVE: 2
12. Suppose Fred’s marginal utility of an extra dollar of income is 56 and Sally’s is 34. If a dollar is taken from
 a. Sally and given to Fred, the economy’s total utility will rise by 22 units.
 b. Fred and given to Sally, the economy’s total utility will rise by 22 units.
 c. Sally and given to Fred, the economy’s total utility will rise by 34 units.
 d. Sally and given to Fred, the economy’s total utility will rise by 56 units.
ANSWER: a Sally and given to Fred, the economy’s total utility will rise by 22 units.
SECTION: 2 OBJECTIVE: 3
13. According to a utilitarian, total social utility will be maximized when marginal dollars are distributed to the people with the
 a. greatest need.
 b. highest marginal utility of income.
 c. highest total utility from their income.
 d. most productive labor resources.
ANSWER: b highest marginal utility of income.
SECTION: 2 OBJECTIVE: 3
14. In a world where people would have no prior information about where they are in an income distribution, given the choice, Rawls argues that they would prefer
 a. an income distribution that is relatively equal.
 b. that everyone has the same work opportunities and market determined wage rates.
 c. that private property be transformed to government property to safeguard their incomes.
 d. less economic assistance to the poor because it distorts the price system.
ANSWER: a an income distribution that is relatively equal.
SECTION: 2 OBJECTIVE: 3
15. The philosopher John Rawls argued that
 a. people would choose income equality if they had to determine an economic distribution system before knowing their place in it.
 b. people would choose income inequality to allow the maximum use of their individual talents.
 c. government has a role to ensure income equality to prevent social unrest.
 d. people would choose income equality because it is morally right.
ANSWER: a people would choose income equality if they had to determine an economic distribution system before knowing their place in it.
SECTION: 1 OBJECTIVE: 1
16. According to a libertarian, if income were to be distributed equally
 a. productivity would increase.
 b. it would take a little time for the distribution to become unequal again.
 c. the marginal product of the poor would rise and the marginal product of the rich would rise.
 d. productivity in the economy would decrease.
ANSWER: d productivity in the economy would decrease.
SECTION: 2 OBJECTIVE: 3
17. The case for income inequality is supported by which of the following arguments?
 a. personal misfortune being a random event
 b. economic efficiency
 c. Rawls’ maximin policy
 d. Utilitarianism
ANSWER: b economic efficiency
SECTION: 2 OBJECTIVE: 3
18. Critics of utilitarianism say that it requires an impossible
 a. belief in utility functions.
 b. interpersonal comparison of utility.
 c. ranking of people’s preferences across different goods.
 d. analysis of marginal utility.
ANSWER: b interpersonal comparison of utility.
SECTION: 2 OBJECTIVE: 3
19. The poor in the United States are disproportionately people who
 a. have less than a high school education.
 b. have incomes that are essentially nonwage incomes.
 c. are poor white women.
 d. live in cities.
ANSWER: a have less than a high school education.
SECTION: 3 OBJECTIVE: 4
20. Price ceilings and minimum wages may increase poverty in the long run because they tend to
 a. decrease the incentive to work among the poor.
 b. increase the level of saving among the rich.
 c. increase productivity of labor among the rich and poor.
 d. promote investment activity by the rich.
ANSWER: a decrease the incentive to work among the poor.
SECTION: 1 OBJECTIVE: 1
21. Suppose a negative income tax program is established at 25 percent, and a poverty threshold minimum of $15,000 is guaranteed for a family of four. If no income is earned by this family, its total income would equal
 a. $6,000.
 b. $15,000.
 c. $18,750.
 d. $60,000.
ANSWER: b $15,000.
SECTION: 3 OBJECTIVE: 4
22. The incentive to work is an ingredient of the negative income tax because
 a. if families do work, they will be eliminated from the program.
 b. if families don’t work, they will be eliminated from the program.
 c. the more income earned in the workplace, the higher the family’s after-tax income.
 d. the amount earned in the workplace is not subject to income taxes.
ANSWER: c the more income earned in the workplace, the higher the family’s after-tax income.
SECTION: 3 OBJECTIVE: 4
23. A negative income tax system was designed to
 a. provide in-kind benefits to the poor.
 b. provide minimal income to the poor.
 c. reduce taxes on the rich when their incomes surpass the maximum income tax bracket.
 d. increase income payments to the poor specifically for housing payments.
ANSWER: b provide minimal income to the poor.
SECTION: 3 OBJECTIVE: 4
24. The main problem with a negative income tax system is that it
 a. guarantees every household a minimum level of income.
 b. causes excessive government meddling in people’s lives.
 c. is too complex to administer fairly.
 d. ignores the culture of poverty that produces less income.
ANSWER: d ignores he culture of poverty that produces less income.
SECTION: 3 OBJECTIVE: 4
25. Social security and unemployment insurance benefits are examples of
 a. transfer payments.
 b. negative income payments.
 c. property income.
 d. compensating differentials.
ANSWER: a transfer payments.
SECTION: 1 OBJECTIVE: 1

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Chương 20Đói nghèo và bất bình đẳng thu nhập1. tỷ lệ phần trăm của các gia đình có thu nhập dưới chuẩn nghèo a. được định nghĩa là thấp nhất 10 phần trăm của hộ gia đình trong điều khoản của thu nhập tại Hoa Kỳ. sinh được gọi là tỷ lệ hộ nghèo. c. được biết đến như tỷ lệ thất nghiệp. mất tăng như tăng cấp tổng thu nhập.Trả lời: b được gọi là tỷ lệ hộ nghèo.PHẦN: 1 MỤC TIÊU: 1 2. mức thu nhập dưới đây mà gia đình được gọi là người nghèo được gọi là các a. thu nhập bảo trì ngưỡng. b. mức nghèo khổ. c. dưới quintile phân phối thu nhập. mức lương tối thiểu mất.Trả lời: b mức nghèo khổ.PHẦN: 1 MỤC TIÊU: 13. nếu chính phủ Hoa Kỳ xác định rằng chi phí nuôi một gia đình đô thị sáu là $6.000 mỗi năm, sau đó chính thức thông cáo báo nghèo cho một gia đình kiểu đó là a. $6.000. b. $12.000. c. $18.000. mất $36.000.Trả lời: c $18.000.PHẦN: 1 MỤC TIÊU: 14. những gì hai yếu tố chính đã tăng bất bình đẳng thu nhập Hoa Kỳ mới? a. kỹ thuật thay đổi và tăng thành viên công đoàn sinh tăng thành viên công đoàn và tỷ lệ thuế cao hơn c. kỹ thuật thay đổi và mở rộng thương mại quốc tế mất mức thuế thấp và mở rộng thương mại quốc tếTrả lời: c thay đổi kỹ thuật và mở rộng thương mại quốc tếPHẦN: 1 MỤC TIÊU: 15. về những gì phần trăm của tất cả chúng tôi thu nhập tới thứ năm hàng đầu của phân phối thu nhập? a. 10%. sinh 25% c. 47% mất 63%Trả lời: c 47%PHẦN: 1 MỤC TIÊU: 16. về những gì phần trăm của tất cả Hoa Kỳ thu nhập tới cuối thứ năm của phân phối thu nhập? a. 10% sinh 8% c. 6% mất 4%Trả lời: d 4%PHẦN: 1 MỤC TIÊU: 17. các quốc gia giàu có hơn, bản phân phối thu nhập có xu hướng là ___ trong nước nghèo hơn. a. ít hơn nhiều bằng hơn Sinh hơi ít hơn bình đẳng hơn c. phân phối về giống như mất bình đẳng hơnTrả lời: d bình đẳng hơnPHẦN: 1 MỤC TIÊU: 18. trong 20 năm qua, tiền lương cho trường đại học tốt nghiệp ___ và tiền lương cho người lao động với ít ___ giáo dục. a. rose; tăng. b. rose; rơi. c. rơi; tăng. mất rơi; đã giảmTrả lời: b rose; đã giảmPHẦN: 1 MỤC TIÊU: 19. trong đó của các nhóm sau đây có tỷ lệ hộ nghèo cao nhất? a. đen sinh Châu á/Thái Bình Dương c. trẻ em (dưới 16 tuổi) mất nữ-headed hộ gia đìnhTrả lời: d nữ-headed hộ gia đìnhPHẦN: 2 MỤC TIÊU: 310. Medicaid và phiếu thực phẩm a. chỉ có sẵn cho người già. b. các hình thức hỗ trợ bằng hiện vật. c. các hình thức hỗ trợ tiền mặt. mất chuyển khoản thanh toán.Trả lời: b hình thức hỗ trợ bằng hiện vật.PHẦN: 1 MỤC TIÊU: 211. Susan giành chiến thắng lớn tại bàn blackjack ngày sinh nhật của cô. Tiền cô giành được coi là a. thu nhập cố định. b. đời thu nhập. c. tạm thời thu nhập. mất một chuyển giao bằng hiện vật.Trả lời: c thu nhập tạm thời.PHẦN: 1 MỤC TIÊU: 212. giả sử của Fred biên Tiện ích của một đô la phụ thu nhập là 56 và Sally's là 34. Nếu một đồng đô la được lấy từ a. sally và cho Fred, nền kinh tế tất cả Tiện ích sẽ tăng lên của 22 đơn vị. sinh Fred và cho Sally, nền kinh tế tất cả Tiện ích sẽ tăng lên của 22 đơn vị. c. sally và cho Fred, nền kinh tế tất cả Tiện ích sẽ tăng 34 đơn vị. mất sally và cho Fred, nền kinh tế tất cả Tiện ích sẽ tăng lên của 56 đơn vị.Trả lời: một Sally và cho Fred, nền kinh tế tất cả Tiện ích sẽ tăng lên của 22 đơn vị.PHẦN: 2 MỤC TIÊU: 313. theo để một utilitarian, tất cả Tiện ích xã hội sẽ được tối đa khi biên đô la được phân phối cho người dân với các a. nhu cầu lớn nhất. b. tiện ích cao nhất biên của thu nhập. c. cao nhất tất cả Tiện ích từ thu nhập của họ. mất tài nguyên lao động hiệu quả nhất.Trả lời: b cao nhất biên Tiện ích thu nhập.PHẦN: 2 MỤC TIÊU: 314. trong một thế giới nơi người nào không có trước khi thông tin về nơi họ đang có trong một phân phối thu nhập, đưa ra sự lựa chọn, Rawls lập luận rằng họ sẽ thích a. một phân phối thu nhập tương đối bằng. sinh rằng mọi người đều có cơ hội làm việc cùng và thị trường xác định tỷ giá lương. c. rằng sở hữu tư nhân được chuyển về tài sản chính phủ để bảo vệ thu nhập của họ. mất ít hỗ trợ kinh tế cho người nghèo vì nó distorts hệ thống giá.Trả lời: một một phân phối thu nhập tương đối bằng.PHẦN: 2 MỤC TIÊU: 315. các nhà triết học John Rawls cho rằng a. người sẽ chọn bình đẳng thu nhập nếu họ đã phải xác định một hệ thống kinh tế phân phối trước khi biết vị trí của mình trong nó. b. người sẽ chọn bất bình đẳng thu nhập cho phép sử dụng tối đa của tài năng cá nhân của họ. c. government has a role to ensure income equality to prevent social unrest. d. people would choose income equality because it is morally right.ANSWER: a people would choose income equality if they had to determine an economic distribution system before knowing their place in it.SECTION: 1 OBJECTIVE: 116. According to a libertarian, if income were to be distributed equally a. productivity would increase. b. it would take a little time for the distribution to become unequal again. c. the marginal product of the poor would rise and the marginal product of the rich would rise. d. productivity in the economy would decrease.ANSWER: d productivity in the economy would decrease.SECTION: 2 OBJECTIVE: 317. The case for income inequality is supported by which of the following arguments? a. personal misfortune being a random event b. economic efficiency c. Rawls’ maximin policy d. UtilitarianismANSWER: b economic efficiencySECTION: 2 OBJECTIVE: 318. Critics of utilitarianism say that it requires an impossible a. belief in utility functions. b. interpersonal comparison of utility. c. ranking of people’s preferences across different goods. d. analysis of marginal utility.ANSWER: b interpersonal comparison of utility.SECTION: 2 OBJECTIVE: 319. The poor in the United States are disproportionately people who a. have less than a high school education. b. have incomes that are essentially nonwage incomes. c. are poor white women. d. live in cities.ANSWER: a have less than a high school education.SECTION: 3 OBJECTIVE: 420. Price ceilings and minimum wages may increase poverty in the long run because they tend to a. decrease the incentive to work among the poor. b. increase the level of saving among the rich. c. increase productivity of labor among the rich and poor. d. promote investment activity by the rich.ANSWER: a decrease the incentive to work among the poor.SECTION: 1 OBJECTIVE: 121. Suppose a negative income tax program is established at 25 percent, and a poverty threshold minimum of $15,000 is guaranteed for a family of four. If no income is earned by this family, its total income would equal a. $6,000. b. $15,000. c. $18,750. d. $60,000.ANSWER: b $15,000.SECTION: 3 OBJECTIVE: 422. The incentive to work is an ingredient of the negative income tax because a. if families do work, they will be eliminated from the program. b. if families don’t work, they will be eliminated from the program. c. the more income earned in the workplace, the higher the family’s after-tax income. d. the amount earned in the workplace is not subject to income taxes.ANSWER: c the more income earned in the workplace, the higher the family’s after-tax income.SECTION: 3 OBJECTIVE: 423. A negative income tax system was designed to a. provide in-kind benefits to the poor. b. provide minimal income to the poor. c. reduce taxes on the rich when their incomes surpass the maximum income tax bracket. d. increase income payments to the poor specifically for housing payments.ANSWER: b provide minimal income to the poor.SECTION: 3 OBJECTIVE: 424. The main problem with a negative income tax system is that it a. guarantees every household a minimum level of income. b. causes excessive government meddling in people’s lives. c. is too complex to administer fairly. d. ignores the culture of poverty that produces less income.ANSWER: d ignores he culture of poverty that produces less income.SECTION: 3 OBJECTIVE: 425. Social security and unemployment insurance benefits are examples of a. transfer payments. b. negative income payments. c. property income. d. compensating differentials.ANSWER: a transfer payments.SECTION: 1 OBJECTIVE: 1

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