Econ Final
It is estimated that 90 percent of the money that is being redistributed is lost to "leaks" such as administrative costs. If $25,000 is redistributed from a family in the highest quintile (earning $190,000) to a family in the lowest quintile (who earned only $15,000), how much money will actually be received by the lowest family?
$2,500
Which of the following studies would NOT offer a useful understanding of inequality?
A study of the highest family income across countries
_____ judges the adequacy of resources relative to an unchanging standard.
Absolute poverty
Which of the following is TRUE about a spell of poverty?
Around half of spells of poverty last less than a year.
The inequality in the United States can be measured by:
Income inequality
Which of the following is NOT considered an effect of income inequality?
Income inequality decreases the racial gap in learning
Which of the following is NOT true about the U.S. social insurance programs provided by the government?
Medicaid provides health insurance for people aged 65 and older.
Which of the following is NOT true about the incidence of poverty in the Unites States?
Most spells of poverty are permanent and recurrent
What would happen if the government redistributed until we all got the same income no matter what?
People would have no incentive to work hard or start a new business
_____ refers to the cash-assistance, goods, and services provided by the government to better the lives of those at the bottom of the income distribution
The social-safety net
Why is annual income NOT a good predictor of what you can afford to consume compared to your permanent income?
You can borrow and save money.
People in long-term poverty represent _____ of the poor at any point in time and they often _____.
a large share; return to poverty
Income refers to:
all the money you earn in a period of time, such as a year
Social Security, unemployment insurance, workers' compensation, and disability insurance payments all:
are based on your past earnings
When equality is measured in terms of outcomes, more equal outcomes:
are fairer
Inequality in living standards is measured by:
focusing on what people spend
According to diminishing marginal utility, your marginal utility may be _____ when you are poor, and it becomes _____ when you are richer
large; smaller
The U.S. official poverty rate calculation is based primarily on
market earnings
The government tries to raise total well-being by equalizing the distribution of income. However, it involves the equality-efficiency trade-off meaning that:
more equal incomes may come at the cost of lower average incomes.
There is _____ inequality in annual income than in measured permanent income because some of income inequality in annual income reflects _____
more; temporary ups and downs
Marginal utility refers to the additional utility you get from
one more dollar
The poverty rate in 2017 was 12.3 percent of the population, meaning that approximately:
one-in-eight people were living in poverty
Some income inequality reflects differences between younger and older people because
people tend to earn more as they get older and more experienced
_____ measures poverty by judging if you have the resources necessary to participate in your society
relative poverty
_____ measures poverty relative to the material living standards of your contemporary society.
relative poverty
Most governments take actions that help reduce _____, which would occur without government. They raise the money for _____
the inequality and poverty; the safety net through taxes
The idea that the government should try to maximize total utility in society is known as:
utilitarianism.
When you apply the cost-benefit principle to your decision to work, the benefit of work is _____ while the cost of work includes _____
wages; your time and loss of in-kind benefits
Which of the following is NOT considered an asset that contributes to your wealth?
your health
As you gain additional years of working experience, _____
your wages tend to rise