Chapter 6: Income Redistribution
MultipleChoiceQuestions
1. An in-kind transfer is a
a) transfer made by people to be kind to others.
b) transfer of wealth.
c) transfer of goods and services instead of cash.
d) system of clearing checks by local banks.
2. For the additive social welfare function to yield results, we must assume
a) individuals have identical utility functions.
b) individuals’ utility functions have diminishing marginal utility of income.
c) the total amount of income available is fixed.
d) all of the above.
e) none of the above.
3. The poverty rate in the United States has over the last 30 years.
a) remained the same
b) increased
c) decreased
d) not been accurately measured
e) done none of the above
4. Generally, official poverty measures ignore
a) the impact of taxes.
b) the value of in-kind transfers.
c) the value of medical expenses that are paid by the government.
d) all of the above.
5. Taking into account the utility of all persons in society is referred to as
a) a utilitarian social welfare function.
b) equalizing social welfare function.
c) an in-kind transfer.
d) a Pareto equilibrium.
e) all of the above.
6. A notion that supports the idea that some items should be distributed equally to all is
known as
a) Pareto efficiency.
b) the Hoover Principle.
c) poverty gap closing.
d) commodity egalitarianism.
e) none of the above.
, 7. The middle class in the United States has since the late 1960s.
a) stayed the same
b) decreased
c) increased a great deal but then declined
d) increased slightly
8. The of whites in poverty in the U.S. is greater than that of blacks and
Hispanics.
a) percentage
b) total number
c) fraction
d) none of the above
9. In a public goods context, it is difficult to measure its impact on real income because
a) public goods are generally free to the public.
b) they make up a small percentage of total GDP.
c) people do not reveal how they value public goods.
d) inflation decreases the value of the good.
10. In-kind transfers have increased in popularity because of
a) paternalism.
b) commodity egalitarianism.
c) administrative feasibility.
d) political attractiveness.
e) all of the above.
11. Maximizing the utility of the person with the minimum utility is known as
a) the minimax criterion.
b) the maximin criterion.
c) the Hicks-Kaldor criterion.
d) the Corlett-Hague Rule.
e) none of the above.
12. An additive social welfare function would
a) add the incomes of the lowest ten percent of income earners.
b) subtract out the utility functions of all people who are unemployed.
c) sum all individual utilities.
d) maximize the utility of the person with the minimum utility.
13. Changing the price of good Y will
a) only affect the demand for that good.
b) have effects across some markets.
c) keep prices down in all markets.
d) have no effect.
e) do none of the above.
MultipleChoiceQuestions
1. An in-kind transfer is a
a) transfer made by people to be kind to others.
b) transfer of wealth.
c) transfer of goods and services instead of cash.
d) system of clearing checks by local banks.
2. For the additive social welfare function to yield results, we must assume
a) individuals have identical utility functions.
b) individuals’ utility functions have diminishing marginal utility of income.
c) the total amount of income available is fixed.
d) all of the above.
e) none of the above.
3. The poverty rate in the United States has over the last 30 years.
a) remained the same
b) increased
c) decreased
d) not been accurately measured
e) done none of the above
4. Generally, official poverty measures ignore
a) the impact of taxes.
b) the value of in-kind transfers.
c) the value of medical expenses that are paid by the government.
d) all of the above.
5. Taking into account the utility of all persons in society is referred to as
a) a utilitarian social welfare function.
b) equalizing social welfare function.
c) an in-kind transfer.
d) a Pareto equilibrium.
e) all of the above.
6. A notion that supports the idea that some items should be distributed equally to all is
known as
a) Pareto efficiency.
b) the Hoover Principle.
c) poverty gap closing.
d) commodity egalitarianism.
e) none of the above.
, 7. The middle class in the United States has since the late 1960s.
a) stayed the same
b) decreased
c) increased a great deal but then declined
d) increased slightly
8. The of whites in poverty in the U.S. is greater than that of blacks and
Hispanics.
a) percentage
b) total number
c) fraction
d) none of the above
9. In a public goods context, it is difficult to measure its impact on real income because
a) public goods are generally free to the public.
b) they make up a small percentage of total GDP.
c) people do not reveal how they value public goods.
d) inflation decreases the value of the good.
10. In-kind transfers have increased in popularity because of
a) paternalism.
b) commodity egalitarianism.
c) administrative feasibility.
d) political attractiveness.
e) all of the above.
11. Maximizing the utility of the person with the minimum utility is known as
a) the minimax criterion.
b) the maximin criterion.
c) the Hicks-Kaldor criterion.
d) the Corlett-Hague Rule.
e) none of the above.
12. An additive social welfare function would
a) add the incomes of the lowest ten percent of income earners.
b) subtract out the utility functions of all people who are unemployed.
c) sum all individual utilities.
d) maximize the utility of the person with the minimum utility.
13. Changing the price of good Y will
a) only affect the demand for that good.
b) have effects across some markets.
c) keep prices down in all markets.
d) have no effect.
e) do none of the above.
