Question 1

The view that a fair income stems from a person's contribution or productivity is at odds with the idea that _____ seems to play a significant role in the incomes of many people.

Accepted Answer

The sentence suggests that the traditional view of fair income based on contribution and productivity is contradicted by the fact that luck seems to play a significant role in the incomes of many people. Hence, the best answer is D - luck.

Question 2

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?

Accepted Answer

The three questions that should guide discussions and policies related to the redistribution of income typically focus on the fairness of the redistribution, the benefits of redistributing income to those who most benefit from it, and the costs associated with the redistribution of income. The question about how long it will take to redistribute income is not commonly listed among these guiding questions.

Question 3

Between 1970 and 2014, the share of income earned by the bottom quintile in the United States fell from 5.4% to 3.6%. However, this does not mean that the incomes of those in the bottom quintile fell. Explain how people in the bottom quintile could earn a lower percentage of total income and yet not have lower incomes.

Accepted Answer

The answer of Between 1970 and 2014, the share of...

Question 4

Assume there are two countries with populations of the same size, equal average incomes, and equal price levels. Use the concept of distribution of income to explain how one country could have more people in absolute poverty than the other country.

Accepted Answer

The answer of Assume there are two countries with populations...

Question 5

Explain why some economists favor the use of permanent income rather than annual income of a household when examining income inequality in a country.

Accepted Answer

The answer of Explain why some economists favor the use...

Question 6

Intergenerational mobility is viewed as a measure of inequality of opportunity rather than outcomes when looking at the issue of income inequality. Define intergenerational mobility, and describe how intergenerational mobility conveys understanding on income inequality.

Accepted Answer

The answer of Intergenerational mobility is viewed as a measure...

Question 7

How could a completely equal distribution of income in a country eliminate relative but not absolute poverty?

Accepted Answer

The answer of How could a completely equal distribution of...

Question 8

How could a country have no absolute poverty and yet still have relative poverty?

Accepted Answer

The answer of How could a country have no absolute...

Question 9

Describe the types of life events that can trigger or cause a spell of poverty for a household.

Accepted Answer

The answer of Describe the types of life events that...

Question 10

What is the main conceptual difference between a social insurance program and a means-tested program that is part of a social safety net?

Accepted Answer

The answer of What is the main conceptual difference between...

Question 11

The three main approaches that governments use to reduce inequality and poverty are providing a social safety net, proving social insurance programs, and designing tax systems. Briefly explain how each can be used to reduce inequality and poverty.

Accepted Answer

The answer of The three main approaches that governments use...

Question 12

What does it mean for a government program to be means-tested?

Accepted Answer

The answer of What does it mean for a government...

Question 13

What is the difference between the definitions of progressive tax and regressive tax?

Accepted Answer

The answer of What is the difference between the definitions...

Question 14

Use the principle of diminishing marginal utility to explain the logic of government income redistribution programs.

Accepted Answer

The answer of Use the principle of diminishing marginal utility...

Question 15

There are many costs of the redistribution of income that reduce the efficiency gains of such programs. Summarize at least four costs associated with the redistribution of income.

Accepted Answer

The answer of There are many costs of the redistribution...

Question 16

Explain how income redistribution programs reduce the work incentive of both high-income tax payers and low-income benefit recipients.

Accepted Answer

The answer of Explain how income redistribution programs reduce the...

Question 17

What is meant by the trade-off between efficiency and equality in discussions of reducing poverty and income inequality?

Accepted Answer

The answer of What is meant by the trade-off between...

Question 18

One view of fair incomes ties a fair income to the hard work and productivity of the individual. Explain how the concept of "luck" creates complications in achieving a "fair income based on work productivity."

Accepted Answer

The answer of One view of fair incomes ties a...

Question 19

Describe the difference between equality of opportunity and equality of outcomes with respect to income distribution.

Accepted Answer

The answer of Describe the difference between equality of opportunity...

Question 20

The _____ is the collection of government programs designed to alleviate economic hardship.

Accepted Answer

The term "social safety net" refers to the various government programs that provide assistance to those who are experiencing economic hardship, such as unemployment benefits, food stamps, and housing assistance. These programs are designed to provide a safety net for people who may otherwise struggle to meet their basic needs. While government transfers, poverty programs, and social insurance programs may all be part of the social safety net, the term itself is most commonly used to refer to the collection of these programs as a whole.

Quiz 13: Inequality, Social Insurance, and Redistribution