Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 20, Problem 3QCMC
To determine
The point where utilitarian believes that the redistribution is worth.
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A utilitarian believes that the redistribution ofincome from the rich to the poor is worthwhile aslong asa. the worst-off members of society benefit from it.b. those contributing to the system are in favor of it.c. each person’s income, after taxes and transfers,reflects his marginal product.d. the distortionary effect on work incentives is nottoo large.
What is the main goal of redistribution policies in welfare economics? A. To increase government revenue B. To reduce
income inequality C. To maximize consumer surplus D. To minimize deadweight loss
Is work on the part of welfare recipients a
reasonable expectation? Does
government have any business getting
involved in the personal lives of welfare
recipients?
Chapter 20 Solutions
Principles of Economics, 7th Edition (MindTap Course List)
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- Which of the following is NOT one of the reasons for the "welfare state"? Select one: a. Reducing poverty and providing access to healthcare b. Alleviating income inequality c. Alleviating economic insecurity d. Increasing economic equalityarrow_forwardBack to Assignment Attempts 0.8 Keep the Highest 0.8/41 4. Redistributive philosophies and incentives Consider a society consisting of two people. Kevin earns an income of $115,000 per year and Maria earns an income of $40,000 per year. The government is considering a redistribution plan that would impose a 15% tax on Kevin's income and give the revenue to Maria. Without any incentive distortion, Kevin would retain $97,750 and Maria would end up with $57,250. However, let us assume that since Kevin will not receive all the income he earns, he decides to work less and earn an income of only $95,000, of which 15% x $95,000 $14,250 will be owed in taxes. With the redistribution plan, Kevin will take home an income of s The $14,250 that Kevin pays in taxes will be transferred by the government to Maria. Let us assume that since Maria now receives payment from the government, she will not work as many hours and will earn an income from work of only $35,000 instead of her initial $40,000.…arrow_forwardThe income threshold used by the organization International Poverty Line for extreme poverty a. Is a guideline for policy makers and not an exact “tipping point” at which point a person falls into extreme poverty. b. Is adjusted for price differences across countries. c. Is one of several thresholds sometimes used to discuss poverty that show that the percentage of people living in poverty has been declining in recent decades. d. Is agreed on by all organizations working on poverty. e. All of the above except d.arrow_forward
- Doarrow_forwardIn California, a welfare recipient is eligible for welfare benefits of $645. Benefits are reduced by 50 cents for every dollar of earnings. Consider Elizabeth, a resident of California, who can earn $10 per hour. a. If she works 10 hours, how much are her earnings, how much is her welfare benefit, and how much is her income? b. After Elizabeth works a certain number of hours, she does not receive any benefit at all. What is that number of hours? c. Use your answer to parts a and b to plot her budget constraint. d. Sketch a set of indifference curves consistent with Elizabeth's participating in the labor marketarrow_forwardHow do Economists define Poverty? 1. Economist define the concept of poverty as an economic state where an individual or household level of income is below a level of annual income necessary to provide a minimum or basic standard of living. 2. The poverty rate is directly related to how income is distributed within a society. Per capita income in 2015 and 2016 is estimated at $56,850 and $62,606, respectively. 3. A minimum standard of living refers to the ability of an individual to acquire food, clothing and housing at an adequate level to avoid economic distress. 4. The U.S. government economists evaluate the cost to individuals and households to acquire food, clothing, and housing to maintain a minimum healthy lifestyle. 5. The bench market for the income level necessary to maintain a basic standard of living is based on USDA Research that uses a baseline cost estimate associated with maintaining a healthy diet of 1800 to 2300 calories per day. * YouTube Q [) 5:09 / 5:37 CC Which…arrow_forward
- How do Economists define Poverty? 1. Economist define the concept of poverty as an economic state where an individual or household level of income is below a level of annual income necessary to provide a minimum or basic standard of living. 2. The poverty rate is directly related to how income is distributed within a society. Per capita income in 2015 and 2016 is estimated at $56,850 and $62,606, respectively. 3. A minimum standard of living refers to the ability of an individual to acquire food, clothing and housing at an adequate level to avoid economic distress. 4. The U.S. government economists evaluate the cost to individuals and households to acquire food, clothing, and housing to maintain a minimum healthy lifestyle. 5. The bench market for the income level necessary to maintain a basic standard of living is based on USDA Research that uses a baseline cost estimate associated with maintaining a healthy diet of 1800 to 2300 calories per day. 5:09 / 5:37 YouTube Q CC Which…arrow_forwardWhich of the following is an example of a positive economic statement? a.The government should not be involved in the income redistribution schemes. b.The after-tax distribution of income is more equal than the pre-tax distribution of income. c.The distribution of income in the United States should be more equal. d.The tax system should be more progressive so that the after-tax distribution of income can be more equal.arrow_forwardWhich of the following is true regarding means-tested welfare programs with benefit reduction rates less than 100% compared to benefit reduction rates of 100% a.100% benefit reduction rates lead to the highest level of hours worked. b.less than 100% reduction rates lead to the highest level of hours worked. c.it is uncertain which program leads to the highest level of hours worked.arrow_forward
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