Deck 20: Poverty Inequality and Discrimination

Question 1

In 1962, Michael Harrington argued in The Other America that there was chronic, severe poverty in America.

Answer 1

True

Question 2

The concept of absolute poverty states that anyone who falls too far behind the average income should be considered poor.

Answer 2

False

Question 3

A market system tends to create inequality.

Answer 3

True

Question 4

The lowest-income fifth of the population ordinarily earns about 20 percent of the income in the United States.

Question 5

By 2012, the poverty line for a typical family of four stood at about $23,250.

Question 6

The "War on Poverty" was declared by President Ronald Reagan in 1982.

Question 7

The highest-income fifth of the U.S.population earns more than 50 percent of all income.

Question 8

Falling below a minimum standard of living illustrates the concept of absolute poverty.

Question 9

The relative concept of poverty is based on how far behind average income a particular family gets.

Question 10

There are several reasons why incomes are unequal, including differences in luck, experience, and schooling.

Question 11

In the United States, the incidence of poverty has declined since the 1970s.

Question 12

The United States has less income inequality than most other developed countries.

Question 13

In 1963, the government first adopted an official definition of poverty: families with incomes below $3,000.

Question 14

The concept of poverty is culturally determined, and hence people are defined as "poor" in relation to others.

Question 15

The U.S.distribution of income was more unequal in 1990 and 1980 than in 1970.

Question 16

Poverty is defined in two ways: the absolute concept of poverty and the relative concept of poverty.

Question 17

Large income differences will be eradicated if the market mechanism is working well.

Question 18

Compared to most other industrialized nations, the United States has greater income inequality.

Question 19

In 2012, the median income of U.S.families was about $86,000.

Question 20

The relative concept of poverty means that poverty will never be eliminated.

Question 21

Actual experiments show that negative income taxes destroy work incentives.

Question 22

TANF compels welfare recipients to go to work after a period of two years.

Question 23

Taken as a whole, antipoverty programs may actually put a poor family in a position in which the family becomes worse off if its earnings rise.

Question 24

Economic discrimination occurs when two equal factors of production are paid differently.

Question 25

For most welfare recipients, the negative income tax plan would increase incentives to work.

Question 26

One benefit of a negative income tax is that it would increase work incentives.

Question 27

Tax loopholes in the personal income tax benefit only very rich people.

Question 28

Programs that reduce the incentive to work make income redistribution inefficient.

Question 29

Discrimination exists when a man and a woman with the same levels of education earn different incomes.

Question 30

Although economists generally favor a negative income tax, there is little political support for it.

Question 31

In their 1994 book, The Bell Curve, Murray and Herrnstein presented evidence that IQ is an important determinant of economic success.

Question 32

In labor markets, risk taking accounts for some income differences.

Question 33

Tax loopholes increase the progressivity of the federal income tax.

Question 34

Economic discrimination occurs when equivalent factors of production receive different payments for equal contributions to output.

Question 35

The total amount of income in a society is independent of how income is distributed.

Question 36

TANF sets a lifetime cap for benefits at 10 years.

Question 37

Compensating wage differentials explain some income differences.

Question 38

If two individuals have identical schooling, their incomes will be equal.

Question 39

It is not optimal to have equal incomes.

Question 40

Direct cash grand programs are thought to be an example of an efficient redistribution program.

Question 41

The poverty line is the income level

A)earned by a worker employed full-time at the minimum wage.
B)below which a family is officially considered "poor."
C)above which a family is not entitled to government assistance.
D)that is the average for American families.

Question 42

A minority candidate may not have the same chances as a white candidate for a job simply based on an employer's misconceptions about minorities.

Question 43

The U.S.income tax system is progressive.

Question 44

Nondiscriminatory firms hiring in the market place have a cost advantage.

Question 45

Because of the book, The Other America, Michael Harrington was important in beginning the

A)Peace Corps.
B)"War on Poverty."
C)regulation of industry.
D)Environmental Protection Agency.

Question 46

In a market economy, incomes would be very equal if there was no discrimination.

Question 47

Prejudice leads, inevitably, to economic discrimination.

Question 48

Competitive forces will reduce the effects of employers' discrimination over time.

Question 49

Discrimination can come from many groups of people, including employers and fellow employees.

Question 50

An employer who refuses to hire women because of the chance they may quit for childbearing purposes is engaging in statistical discrimination.

Question 51

The official dividing line between the poor and nonpoor is called the

A)life threshold.
B)life edge.
C)poverty line.
D)beginning line.

Question 52

Two policies to combat discrimination are affirmative action and right-to-work laws.

Question 53

In 1964, the poverty line for a family stood at about which of the following figures?

A)$2,100
B)$3,000
C)$4,500
D)$7,500

Question 54

Roughly what was the median level of household income in the U.S.in 2012?

A)50,000
B)60,000
C)70,000
D)80,000

Question 55

Inheritance taxes tend to increase income inequality in the long run.

Question 56

Inheritance taxes tend to increase income inequality in the long run.

Question 57

Compared to a nonpoor individual, a poor individual is more likely to be

A)female.
B)black.
C)a child.
D)All of the above are correct.

Question 58

If a female supervisor is discriminated against by one of her workers who refuses to cooperate, she may earn lower wages.

Question 59

Affirmative action laws require employers to hire specified numbers of minorities.

Question 60

Affirmative action laws require employers to search for qualified minority applicants, but not to necessarily give them jobs.

Question 61

Which of the following observations concerning the absolute definition of poverty is true?

A)It is based on average income.
B)It is an optimistic definition.
C)It is not arbitrary in nature.
D)It is a cultural definition.

Question 62

In 2012, approximately what income level was the cut-off point for defining a family as "rich"?

A)$72,000
B)$104,000
C)$143,000
D)$195,000

Question 63

The basic problem with the government setting an absolute poverty line is that it is

A)completely objective.
B)somewhat arbitrary.
C)unconstitutional.
D)based on average income.

Question 64

An example of an in-kind benefit is

A)a welfare payment.
B)capital gains.
C)a charitable contribution of money.
D)public housing.

Question 65

Under a system of free, competitive markets,

A)a society can usually achieve efficiency only at the expense of equality.
B)poverty cannot exist in the long run.
C)employers do not practice statistical discrimination.
D)income is distributed equally across the population.

Question 66

Official data may overstate the extent of poverty because

A)poverty is a relative as opposed to an absolute concept.
B)it does not add "in-kind" transfers to the incomes of the poor.
C)it overstates the taxes paid by the poor.
D)it overestimates the amount the poor earn in the "underground economy."

Question 67

Which of the following observations concerning poverty rates in America is true?

A)Major increase in poverty in the decade from 1963 to 1973.
B)It hit an all-time low by 1983.
C)The economic boom of the 1990s restored it almost to its 1970s levels.
D)It decreased from 2007 to 2009.

Question 68

If income redistribution policy is based on the relative concept of poverty, the war on poverty

A)will be won quite soon.
B)is, by definition, unwinnable.
C)has not helped at all.
D)has already been won.

Question 69

In 2012, what percentage of total income in the U.S.was earned by the richest fifth of all U.S.households?

A)20%
B)30%
C)40%
D)50%

Question 70

Roughly what percentage of Americans were officially considered poor in 2012?

A)2 percent
B)9 percent
C)15 percent
D)22 percent

Question 71

The poor are those who fall too far behind the average income.This refers to the ____ definition of poverty.

A)marginal
B)absolute
C)relative
D)threshold

Question 72

Under a relative concept of poverty, poverty

A)doesn't really exist.
B)is higher in rich countries than in poor countries.
C)can never be wholly eliminated by public policy.
D)declines as technology advances.

Question 73

In 2012, the poverty line for a family of four was approximately

A)$10,075
B)$13,100.
C)$15,700.
D)$23,250.

Question 74

If you fall short of a certain minimum standard of living, you are poor; once you pass this standard, you are no longer poor.This refers to the ____ definition of poverty.

A)average
B)absolute
C)relative
D)threshold

Question 75

The two ways to define poverty are which of the following?

A)relatively and absolutely
B)absolutely and definitely
C)definitely and conceptually
D)definitely and receptively

Question 76

If one includes in-kind income in the calculation, the

A)official poverty rate becomes meaningless.
B)incidence of poverty actually increases.
C)poverty rate is unchanged.
D)fraction of the population in poverty drops.

Question 77

In 2012, what percentage of total income in the U.S.was earned by the poorest fifth of all U.S.households?

A)1.5%
B)1.8%
C)2.0%
D)3.2%

Question 78

About what percentage of the poor are children?

A)13
B)24
C)36
D)60

Question 79

The relative concept of poverty is based on how far a family falls behind the

A)average family income.
B)top 20 percent of families.
C)minimum in wages.
D)any of the above.

Question 80

The national poverty rate in the United States reached a low in the

A)early 1960s.
B)early 1970s.
C)late 1970s.
D)early 1980s.