Category: Income Inequality

A. a means tested cash benefit
B. a universal (social insurance based) benefit
C. a benefit in kind
D. none of the above

A. accurately represent the true inequality of living standards
B. understate the inequality of living standards
C. exaggerate the inequality of living standards
D. could exaggerate of understate the inequality of living standards depending on whether the transfers are goods or services.

A. making spending decision but not labour-supply decision.
B. making both spending and labour-supply decisions
C. considered to be ‘poor’ but not for those who are considered to be ‘rich’
D. making labour-supply decisions but not spending decisions.

A. Maximize the total utility of society
B. Maximize the well-being of the worst-off person in society
C. minimize the difference between the rich and poor
D. maximize the economic freedom of individuals by minimizing government interference in private decision making
E. minimize the well-being of the best-off person in society

A. MPL + PX
B. (MPL) (PX)
C. PX/MPL
D. MPL/PX

A. Such redistribution would mean that those who worked hard were no better off than those who were lazy and this would be unfair.
B. such redistribution would not maximize the total income of all members of society
C. Such redistribution would remove the incentive to work hard, so society’s total income would fall, and so the least well off person would be worse off than they could be under a system in which there was some inequality income.
D. such redistribution would amount to confiscation of honestly earned income from higher earners and so would be unjust.

A. the return to any factor of production that is in fixed supply
B. the profit earned by the owner of any housing unit.
C. the amount paid each year by a tenant for an apartment
D. any profit earned by stockholders when they sell their stock

A. redistributing income from rich to poor because this is what the members of society would choose to do if they were behind a veil of ignorance
B. redistributing income from rich to poor because due to the diminishing marginal utility of income, taking a pound from the rich reduces their utility by less than the gain in utility generated by giving a pound to the poor
C. allowing each individual to maximize their own utility without interference from the government
redistributing income from rich to poor because this would maximize the well-being of the worst-off person in society

A. generates a smaller disincentive to work than most alternative anti-poverty policies.
B. reduces the cost to the government of fighting poverty
C. would not provide benefits to lazy people
D. ensures that the poor actually receive what the government thinks they need does all these answers.

A. specific
B. Direct
C. Ad valorem
D. Excise duty