econ 2302

The poverty threshold for a family of four that includes two children under age 18 is

$23,283

cumulative share of household income

...

cumulative share of households

...

share of household income

...

share of households

...

the wage as the price of labor

...

Poverty Rate in 2005

12.6

Poverty Rate in 2008

13.2

Poverty Rate in 2012

15.0

externality

A benefit or cost that affects someone who is not directly involved in the production or consumption of a good or service

household

A person or group of people living in the same residence

What is the profit-maximizing/loss-minimizing output level?

MR=MC

interest rate

P/(1+r)^x

Which of the following statements is true about scarcity?

Scarcity refers to the situation in which unlimited wants exceed limited resources.

Poverty thresholds do not vary

according to where you live. Whether you live in Texas, Alabama, or New York, the poverty thresholds are the same

money income

amount of money you receive in a pay period

poverty line

are the officially established income levels that distinguish the poor from the nonpoor. It is set at three times the cost of the Department of Agriculture's minimum food budget (three times the cost of a thrifty but nutritionally adequate food budget).

Income is a _____, and wealth is a ____.

flow; stock

oprotunity cost

give/get

income distribution

how the total or aggregate income of a state, country, or the entire world is divided among the various persons and groups that comprise the population.

The number of persons in poverty

in 2012, 46,496,000 persons in the United States were below the poverty threshold

Lorenz Curve

is a widely used graphical representation of the distribution of income, with cumulative percentage of families plotted along the horizontal axis and cumulative percentage of income plotted along the vertical axis.

poverty rate

is defined as the number of persons below poverty divided by the number of persons in the population. The poverty rate in the U.S. in recent years was as follows: In 2012, the poverty rate in the U.S. was 15%. This means that 15% of the population in the U.S. was classified as poor based on their annual income. Ten years ago, in 2001, the poverty rate in the U.S. was 11.7%

Total utility

is equal to the sum of the marginal utilities of all units consumed.

If demand is inelastic, the absolute value of the price elasticity of demand is

less than one

In economics, the term ________ means "additional" or "extra."

marginal

Economists reason that the optimal decision is to continue any activity up to the point where the

marginal benefit equals the marginal cost

An economic ________ is a simplified version of some aspect of economic life used to analyze an economic issue.

model

Poverty thresholds vary by

size of family unit and number of children under age 18.

poverty

the condition of people who have very low incomes.

The law of diminishing marginal utility states that

the extra satisfaction from consuming a good decreases as more of a good is consumed, other things constant.

marginal revenue product

the market value of what they produce at the margin

human capital

the stock of knowledge, skills, and talents that people possess; human capital is acquired over time through education, training, experience, and investments in health.

profit is equal to

total revenue-total cost

A vertical line has a slope of

undefiined

negative cross-price elasticity

when the price of one good increases, the quantity demanded of the other good decreases

income inequality

whenever income is distributed unequally across groups of persons within a given geographic area such as a state, country, or region of a country.

A horizontal line has a slope of

zero