Econ Chapter 13

How much did the share of income of the poorest quintile decrease between 1970 and 2017?

1.6%

Which of the following taxes is regressive? Raj pays a 10% tax on the first $10,000 he earns plus a _____ tax on any additional income.

5%

Assume that a country with total income of $160,000 has a population of 10 households whose incomes are listed in Table: Income of Households. What percentage of income is earned by the top quintile of the population?

69%

According to diminishing marginal utility, which of the following people would gain the lowest marginal benefit from an extra $100 of income?

Ariana, an actress with an annual household income of $1,500,000

Which of the following is NOT true of the incidence of poverty in the United States?

Elderly people are more likely than other age groups to be in poverty.

Which of the following is NOT considered a result of income redistribution through social benefits?

These programs lead to policies that further increase inequality.

Which of the following is a mean-tested social safety net program in the United States?

earned income tax credit

The poverty line is a:

somewhat arbitrary threshold.

In the past four decades, the average income of the population has doubled, but the poverty rate has been stable at around 15%. This means that:

those at the bottom of the income distribution have not shared in the rising prosperity.

What does the following well-being curve illustrate?

A pattern of diminishing marginal benefit

_____ judges the adequacy of resources relative to an unchanging standard.

Absolute poverty

Table: Income Distribution in Four Countries provides recent data from the World Bank on the distribution of income in four countries. Based on the data, the country with the distribution of income that is closest to equal is:

Bangladesh

Which of the following is NOT one of the three questions that should guide discussions and policies related to the redistribution of income that were presented in the chapter?

How long will it take to redistribute income?

Which of the following is NOT one of the four key reasons that the government provides in-kind benefits rather than cash benefits?

In-kind benefits give the recipient the greatest flexibility to choose what matters most.

Which of the following is a social insurance program in the United States?

Social Security

The purpose of _____ is to provide a safety net for individuals who _____, or to take care of orphaned minors.

Social Security; outlive their savings

Which of the following is a negative result of redistributing income toward equality?

Work incentives are reduced.

Based on a wide range of information, is there any income inequality in the Unites States?

Yes, the distribution of income shows the disparate shares of family income among the quintiles.

Which tax is regressive? Arturo pays an 8% tax on the first $9,000 he earns plus _____ tax on any additional income.

a 5%

Which of the following is NOT a cost of the redistribution of income?

reduced marginal benefits to extra income

The cash-assistance, goods, and services provided by the government to better the lives of those at the bottom of the income distribution are known as the:

social safety net

Government social insurance programs are funded by:

taxes and fees that are assessed on workers and employers specifically for each program.

From 1970 to 2017:

the rich got richer as their share of income grew faster than the other quintiles.

Which of the following is NOT considered an effect of income inequality?

Income inequality decreases the racial gap in learning.

Which of these statements is TRUE concerning changes in the U.S. income distribution from 1970 to 2017?

Income share grew the fastest for those at the top of the income distribution.

How has the share of income of the poorest quintile changed from 1970 to 2017?

It has decreased from 5.4% to 3.8%.

Which of the following is NOT true about the incidence of poverty in the Unites States?

Most spells of poverty are permanent and recurrent.

_____ is provided by the government to insure people against unemployment, illness, disability, or lost savings.

Social insurance

Table: Average Income and Distribution of Income Data provides recent data from the World Bank on average income and the distribution of income in four countries Based on the data in the table, those in the top quintile have the highest average income in which country?

Sri Lanka

You have learned that the demand curve is downward-sloping because of diminishing marginal benefit. When you apply this idea to your total income, you find that:

each dollar you get tends to yield you less benefit than the previous dollar.

To help _____ for those at the bottom of the income distribution, the government _____ to those people through safety net programs.

ensure a minimum material standard of living; redistributes

Which of the following is consistent with the view that "fairness" means equality of outcomes?

equal incomes

Because the private insurance market _____ that everyone can get certain forms of insurance, the government steps in and social insurance is provided by _____.

fails to ensure; taxpayers

The United States has _____ income inequality than Sweden because _____.

higher; the U.S. income gap is wider

When the definition of poverty focuses on relative poverty, a person is in poverty if the household income is:

in the bottom 10% of household incomes in the nation.

In the United States, the poverty line income:

is adjusted based on family size.

Once we take taxes and transfers into account, there is:

less inequality and less poverty.

The _____ tells you that an important cost of working is what you must give up in order to work.

opportunity cost principle

In the field of economics, the observation that the living standard of a household is more stable than its income, because people think in terms of their long-term earnings as they spend, is known as:

permanent income versus current income.

An income level below which a family is defined to be in poverty is known as the:

poverty line.

Data shows that the well-being score is associated with a change in income. If we redistribute $25,000 from the rich to the poor:

the loss of utility from the rich is less than the gain to the poor.

Data shows that the United States has less intergenerational mobility than Germany. That means that:

the success of U.S. children depends more on parents' economic status than the success of German children does.