CH 13

Question 1

Income

Answer 1

the money you receive in a period of time; distributed unequally

Question 2

Wealth

Answer 2

the assets you currently have, more unequal than income

Question 3

permanent income

Answer 3

your average lifetime income

Question 4

intergenerational mobility

Answer 4

the extent to which your economic circumstances are independent of those of your parents

Question 5

the gini coefficients

Answer 5

measure of inequality; higher gini means more inequality

Question 6

causes of inequality

Answer 6

difference in wages/salaries, life cycle, living/working arrangements, and stock market/propriety

Question 7

Poverty line

Answer 7

the bar for qualifying as in poverty

Question 8

poverty rate

Answer 8

share of people whose family income falls below the poverty line

Question 9

absolute poverty

Answer 9

judges adequacy of resources relative to unchanging standards; whether your basic needs are met

Question 10

relative poverty

Answer 10

judges poverty relative to the material living standards of contemporary society

Question 11

social safety net

Answer 11

cash assistance, goods, and services provided by the government to better the lives of those at the bottom of income distribution; income assistance

Question 12

in-kind benefit

Answer 12

non-monetary support

Question 13

means-tested

Answer 13

eligibility only depends on income

Question 14

social insurance

Answer 14

government programs that insure you against bad incomes

Question 15

tax rates

Answer 15

the percentage of your income that goes to taxes

Question 16

average tax rates

Answer 16

all taxes paid/total income

Question 17

marginal tax rates

Answer 17

the percentage of an additional dollar earned that would go to taxes

Question 18

progressive tax rates

Answer 18

a system in which those w/ more income tend to pay a higher share of their income in taxes

Question 19

regressive taxes

Answer 19

where those w/ lower incomes pay a higher share of their income on the tax compared to people w/ higher incomes

Question 20

proportional/flat tax

Answer 20

everyone pays the same percentage

Question 21

utility

Answer 21

your level of well-being

Question 22

marginal utility

Answer 22

additional utility you get from one more dollar

Question 23

diminishing marginal utility

Answer 23

each additional dollar yields a smaller boost to your utility

Question 24

utilitarianism

Answer 24

the political philosophy that the government should try to maximize total utility in society

Question 25

utilitarian justice

Answer 25

the idea that a dollar to a rich man is worth less than to a poor man

Question 26

the leaky bucket

Answer 26

lost money from redistribution