Deck 14: Poverty and Income Support Policies

Question 1

Absolute poverty is

A)Based on a comparison of income to need
B)Based on a comparison of income to a national average
C)Based on the Gini coefficient
D)Based on a measure of access to basic necessities

Answer 1

A

Question 2

According to the "food stamp" problem, in-kind benefits such as housing vouchers or food assistance are

A)More efficient at increasing the utility of the recipient than cash
B)Based on the proven preferences of low income people
C)Less efficient at increasing the utility of the recipient than cash
D)Less preferred by tax payers and politicians than cash

Answer 2

C

Question 3

For a person with a positive marginal utility of leisure, a cash assistance program with an implicit tax rate of -1 will lead to the following effect on work

A)The person may choose to work more or less hours depending on the income and substitution effects
B)The person will definitely work, but will work fewer hours than with a wage alone
C)The person will not choose to work
D)There is not enough information to answer the question

Answer 3

C

Question 4

The 2014 poverty line in the U.S.

A)Is about $16,000
B)Is nearly $18,000 for a 2 parent family of 4
C)Is over $25,000
D)None of the above.It varies with the size and nature of the family

Question 5

The TANF program of 1996 included all of the following EXCEPT

A)A federal requirement that all recipients work at least 20-30 hours after 2 years
B)A federal requirement that benefits provide a minimally adequate level of income
C)A 5 year lifetime time limit for federal benefits
D)Increased flexibility for states to design their own programs

Question 6

In general Americans are more likely than Europeans to support the view that the poor are responsible for their plight.This view is referred to in the text as

A)The big brother view
B)The flawed character view
C)The exploitation view
D)The restricted opportunity view

Question 7

All of the following are reasons why the official U.S.poverty line might be too high EXCEPT:

A)Inequality is not included in our measure of poverty
B)Income is often understated on surveys
C)Inflation is overestimated
D)Some government programs are not included as income

Question 8

For a cash assistance program with a base payment of $100 and an implicit tax rate of -½, a person who works 10 hours for $10 per hour will have a total cash assistance payment of ___ and total income of _____

A)$100, $150
B)$100, $200
C)$0, $100
D)$50, $150

Question 9

If A in Figure 14-1 has an area of .15, the corresponding Gini coefficient will equal

A).15
B).30
C).35
D).65

Question 10

All of the following are reasons why the official U.S.poverty line might be too low EXCEPT:

A)The original estimate of the percentage of income spent on food was too high
B)The official poverty measure doesn't include some government benefits as income
C)The poverty line doesn't account for the increasing cost of work,
D)The absolute poverty measure doesn't keep up with the average household income.
E)All of the above are true

Question 11

The region which has seen the biggest drop in extreme poverty over the last 35 years is

A)South Asia
B)South America
C)North America
D)East Asia
E)Africa

Question 12

The group with the highest official poverty rate in the U.S.is

A)African-Americans
B)Hispanic Americans
C)Single parent families
D)The elderly
E)White-Anglo Americans

Question 13

U.S.public assistance programs perform poorly with regard to horizontal equity because

A)Many programs have very different benefits across states
B)Social programs in the U.S.do relatively little to reduce poverty
C)Social programs and the tax system in the U.S.do very little to decrease inequality
D)None of these answers relates to the concept of horizontal equity