Assignment 15

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Question 1 (1 point)

In a market system, those who own the most highly valued resources

pay the greatest property tax.
have the highest incomes.
employ the greatest numbers of people.
support charitable organizations in the community.
pay the largest share of income taxes.

Question 2 (1 point)

If everyone had the same income, the Lorenz curve would

bow up above the line of income equality.
bow down below the line of income equality.
be the line of income equality.
be a curve that intersects the line of income equality where 50 percent of the population earns 50 percent of the income.
be a line below and parallel to the line of income equality.

Question 3 (1 point)

The Lorenz curve shows __________ within a society.

the absolute level of income
the per capita annual income of individuals
the income distribution
the quality of life of the poor
who the poor are

Question 4 (1 point)

If the first row in the table above represents the percentage of population and the second row the percent of income earned by that percentage of population, then we can say

incomes are distributed unequally with the richest 20 percent having the greatest percentage of income.
incomes are distributed unequally with the richest 20 percent earning 10 percent of income.
incomes are distributed equally.
incomes are distributed unequally with the richest 20 percent earning 30 percent.
incomes are distributed unequally with the poorest having the greatest percentage of income.

Question 5 (1 point)

Refer to the figure above. In comparing Country A's income distribution with that of Country B, we can say that

Country B has a substantially greater degree of income equality than Country A.
the absolute level of income in Country B must substantially exceed that of Country A.
the absolute level of income in Country A must substantially exceed that of Country B.
since both curves are bowed in like fashion, no income inequality exists.
Country B has a substantially greater degree of income inequality than Country A.

Question 6 (1 point)

Which of the following statements concerning the measurement of poverty is false?

Those who live in poverty have significantly lower standards of living than those not living in poverty.
A proper measure of poverty must compare income levels within a single country.
Poverty levels are the same for all countries.
People living in comfort in one country might be considered impoverished in another.
Poverty is a measure of the quality of life.

Question 7 (1 point)

In-kind transfers are defined to be

the allocation of goods and services from one group in society to another.
cash transfers, which are unearned funds.
private stock transfers from one generation to the next.
another term used to describe private charities.
money allocated from one group in society to another.

Question 8 (1 point)

Which of the following is an example of a cash transfer?

Food bought with food stamps
Medical services provided under Medicaid
Legal aid
A cash advance on a credit card
Unemployment compensation

Question 9 (1 point)

The factor most influencing the number of people in poverty and the incidence of poverty is

the happiness of the population.
whether the economy is government dominated or not.
whether the economy is dominated by another economy.
the standard of living of the nation.
the general health of the economy.

Question 10 (1 point)

Which of the following statements best describes poverty in the United States?

Poverty does not affect races, sexes, or different age groups equally.
A young person rarely falls below the poverty level because youth and vigor will always ensure that a young person can "carry his weight."
Almost one-half of all Americans fall below the poverty line.
The highest incidence of poverty by age occurs among those between the ages of 30 and 60.
Poverty affects races, sexes, and different age groups relatively equally.

Question 11 (1 point)

Which of the following is not a trait commonly seen among those who fall below the poverty line?

Lack of education
Lack of a job
Being aged 65 and over
4 or more years of college
Being aged 16 and over

Question 12 (1 point)

A progressive tax tends to

generate additional tax dollars for the government.
reduce income inequality for the rich more than for the poor.
reduce income inequality.
increase income inequality.
leave the income distribution essentially unchanged.

Question 13 (1 point)

The largest social insurance program is known as

social security.
food stamps.
Medicaid.
Aid to Families with Dependent Children (AFDC).
unemployment insurance.

Question 14 (1 point)

After more than twenty years of increasing outlays to reduce poverty,

the problem of poverty is no closer to a solution now than twenty years ago.
our economic system just cannot produce enough goods and services to provide basic necessities for our population.
there is disagreement about whether antipoverty programs have reduced or increased poverty.
we see that Abraham Lincoln was right when he said, "God must love poor people, for He has made so many of them."
the war on poverty has been clearly won.

Question 15 (1 point)

According to the text, disincentives created by the welfare system mean

those paying taxes may decline to pay more.
incentives for the rich to work may be reduced.
incentives for the poor to acquire an education may be reduced.
incentives for the poor to work may be reduced.
incentives for both the rich and the poor to work hard and increase their productivity may be reduced.

Question 16 (1 point)

Economists like the negative income tax because, at least in theory, it

has been successfully used in other countries, especially in Europe.
reduces poverty without reducing efficiency.
can be passed by both houses of Congress.
increases equity while enhancing efficiency.
has been endorsed by both Republican and Democratic candidates for president.

Question 17 (1 point)

If in the negative income tax proposal the guaranteed income floor is $9,000 and the tax rate is 25 percent, what is the value of the breakeven income?

$45,000
$9,000
$22,500
$18,000
$36,000

Question 18 (1 point)

According to the text, incomes differ greatly from one nation to another as well as within nations. What does this mean?

It means that the middle class in one country is also the middle class in any other country.
It means that the poorest people in a rich country could be among the richest in a poor country.
It means that the poorest 10 percent of the population in one country will be the poorest in any nation.
It means that the richest 10 percent of the population in one country will be the richest in any nation.
It means that the richest people in a poor nation will be among the poorest in another nation.

Question 19 (1 point)

Which of the following explanations for the uneven distribution of income in the world has been argued by economists?

Older countries tend to be richer.
People who live in colder countries tend to be more work oriented.
Poorer countries tend to have unfounded cultures.
The freer the economic and political system, the greater the rate of economic growth.
None of these.

Question 20 (1 point)

It has been suggested that a reform to allow poor people to establish clear title to assets could be a means to induce growth in developing countries. Why could this promote poor people's economic growth?

Because they would be landlords and be allowed to exploit other people.
Because they could then bet their assets.
Because they could then borrow against their assets.
Because they could then destroy their assets and get away with it.
None of these.

Question 1 (5.00 points)

Are people who are poor today in the United States likely to be poor for the rest of their lives? Under what conditions is generational poverty likely to exist?

Question 2 (5.00 points)

What is the Lorenz curve? What would the curve look like if income were equally distributed? Could the curve ever bow upward above the line of income equality?

Copyright 2008, by the Contributing Authors. Cite/attribute Resource. admin. (2006, July 03). Assignment 15. Retrieved October 12, 2008, from Free Online Course Materials — USU OpenCourseWare Web site: http://ocw.usu.edu/Economics/Introduction_to_Microeconomics/assignment15.htm. This work is licensed under a Creative Commons License.

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