EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 21, Problem 3RQ
To determine
Which of the statements are true about the Income inequality is true and which are false.
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A household with income that is two-thirds of the poverty threshold has ratio of income to poverty of
O 0.67.
O 1.50.
O 3.20.
O0.23.
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Which would be evidence of an increase in income inequality over time in the United
States?
O a decrease in the percentage of total personal income received by the highest quintile
O an increase in the percentage of total personal income received by the highest quintile
O an increase in the percentage of total personal income received by the four lowest quintiles
O an increase in the percentage of total personal income received by the lowest quintile
The government announces programs designed to reduce the share of income going to the top quintile from 60% to 20%.
You predict that the most likely result is that:
O mean household income will fall, because the highest income earners will earn less and work less.
median household income will rise, because some of the 40% of redistributed income will be transferred to the third
quintile.
after redistribution, each quintile will receive 20% of total wealth.
O the lowest quintile will receive the 40% taken from the top quintile and switch places.
Chapter 21 Solutions
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- Completed 15 out of 20 Submit All Question 9 of 20 If the poverty guideline for a family of four is $25,750, what is the most that a household can earn to be considered "near- poor"? O $19,312.50 O $12,875 O $32,187.50 O $25,750arrow_forwardAs income transfer programs accompanying the War on Poverty increased beginning in the latter half of the 1960s, what happened to poverty in the United States? Check all that apply. O The adjusted poverty rate has declined rapidly and is now less than half of the official poverty rate. O The poverty rate declined substantially in the period before the War on Poverty, but not in the period after the start of the War on Poverty. O In 2018, the adjusted poverty rate was only 4 percentage points lower than the official rate in 1970. O The War on Poverty has been largely ineffective in reducing the rate of poverty in the United States.arrow_forward4. Suppose country A has the following cumulative distribution of income: Cumulative Cumulative Percent of Percent of Families Total Income 20 5 40 15 50 27 60 30 80 50 90 70 95 82 Compute the quintile shares. What is the share of total income of the top 10 percent of families and of the top 5 percent of families?arrow_forward
- Wealth, earnings, and disposable income are just three of several ways of looking at inequality. Imagine a household that earns $80,000 per year from labor. In that year, it also receives an income of $3,000 from investments, pays $12,000 in tax, and receives $7,000 in transfers from the state. Which of the following is its market income and its disposable income? O $83,000; $71,000. O $83,000 $78,000. O $80,000; $68,000. O $80,000; $75,000. Jarrow_forwardA life-insurance salesman spends 12 hours a week on the telephone soliciting new clients. From past experience, the salesman estimates that each hour spent calling students, blue-collar workers, and professionals will produce the following number of additional sales: Hours Calling 0 1 2 3 4 LO 5 6 Number of Additional Sales Blue-Collar Workers 0 19 17 15 14 12 11 Students 0 25 22 19 17 15 12 Professionals 0 21 19 17 15 12 11 How should the life-insurance salesman allocate his phone-calling time to maximize the number of sales? Hours spent calling students = Hours spent calling blue-collar workers = Hours spent calling professionalsarrow_forwardAntonio and Caroline are farmers. Each one owns a 20-acre plot of land. The following table shows the amount of alfalfa and barley each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing alfalfa or barley or to produce alfalfa on some of the land and barley on the rest. Alfalfa Barley (Bushels per acre) (Bushels per acre) Antonio 40 8 Caroline 28 7 ___________has an absolute advantage in the production of alfalfa, and __________ has an absolute advantage in the production of barley. Antonio's opportunity cost of producing 1 bushel of barley is ____ bushels of alfalfa, whereas Caroline's opportunity cost of producing 1 bushel of barley is______ bushels of alfalfa. Because Antonio has a ______ opportunity cost of producing barley than Caroline,________ has a comparative advantage in the production of barley and_______ has a comparative advantage in the production of alfalfa.arrow_forward
- Show instructions Question 1 Income poverty is about the lack of access to the basic rights of food, clothes and shelter, education, proper health care, clean water -- rights that most of us take for grante ○ True O False Question 2 ( Population is not a direct cause of poverty, but it does compound the problem of poverty. True O False Question 3 Income levels do not necessarily reflect levels of poverty. O True O False Questions 1-10 of 10 | Page 1 of 1 Question 4 War is perhaps the most devastating and serious cause of poverty. O True O False Question 5 The World Bank has established an international poverty line of $10 a day per person in 1985 purchasing power parity (PPP) prices. O True O False Question 6 Analysts have found a strong positive relationship between economic growth and poverty reduction. O True O False Question 7 Most of the world's poor live in South Asia. True O Falsearrow_forwardConsider the following table that gives the monthly per capita consumption expenditure of 10 households with poverty line given as $500 per month. Poverty Gap is %. Monthly per capita consumption expenditure (in $) of 10 households 5 400 300 1000 2500 4 9 400 950 2 3 6 7 8 10 Country A 900 1200 505 100 O a 40 O b. 13 O c. 27 O d. 16arrow_forwardApproximately how many African Americans received commissions in the U.S. Army during the First World War? O 1) 10 O 2) 85 O 3) 335 O 4) 650 Listen During World War I, who served as a special assistant to the secretary of war, advising on matters related to African Americans? O 1) Booker T. Washington O 2) w. E. B. Du Bois 3) Emmett J. Scott O 4) Joel Spingarnarrow_forward
- 30 Premium (high income) EQ 2 Premium (low income) EQ 1 50 55 100 High income households in A In this figure, how many stable AND integrated equilibrium points are shown? O 3 O 2 Rent gap ($)arrow_forward2. Assume there is a community with 8 households and income distribution (1, 4, 5, 8, 10, 12, 15, 17). Let us call this community, group 1. a) If the government takes one unit of income from each of the three richest consumers and gives one unit to each of the three poorest, plot the Lorenz curve for this group. How has this inequality now changed? Explain b) Without plotting the Lorenz curve, show that the Lorenz curve for group 2 with the income distribution (1, 3, 4, 9, 11, 13, 16, 17) crosses the Lorenz curve for the distribution of group 1. c) Calculate the Gini for group 1.arrow_forwardSuppose that a society contains only two members, a lawyer named Monique and a handyman named James. Five years ago, Monique made $100,000 while James made $50,000. This year, Monique will make $300,000 while James will make $100,000. Which of the following statements about this society’s income distribution are true? a. In absolute dollar amounts, the entire distribution of income has been moving upward. b. In absolute dollar amounts, the entire distribution of income has been stagnant. c. The relative distribution of income has become more equal. d. The relative distribution of income has become less equal. The relative distribution of income has remained constant. f. The rich are getting richer while the poor are getting poorer. g. The rich are getting richer faster than the poor are getting richer.arrow_forward
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