Principles of Microeconomics, Ch. 20
utility
a measure of happiness or satisfaction
permanent income
a person's normal income
negative income tax
a tax system that collects revenue from high-income households and gives subsidies to low-income households
poverty line
an absolute level of income set by the federal government for each family size below which a family is deemed to be in poverty
social insurance
government policy aimed at protecting people against the risk of adverse advents
welfare
government programs that supplement the incomes of the needy
maximin criterion
the claim that the government should aim to maximize the well-being of the worst-off person in society
poverty rate
the percentage of the population whose family income falls below an absolute level called the poverty line
liberalism
the political philosophy according to which the government should choose policies deemed just, as evaluated by an impartial observer behind a "veil of ignorance"
utilitarianism
the political philosophy according to which the government should choose policies to maximize the toal utility of everyone in society
libertarianism
the political philosophy according to which the government should punish crimes and enforce voluntary agreements but not redistribute income
life cycle
the regular pattern of income variation over a person's life
in-kind transfers
transers to the poor given in the form of goods and services rather than cash