Question

1)  Suppose the poverty line in the United States was set according the following test: a household is poor if its income is less than 75% of the median household income. Is this an absolute or relative definition of poverty?

a) neither absolute nor relative

b) absolute

c) both absolute and relative

d) relative

2) Suppose for a particular group of the population the equilibrium wage is $15 and the equilibrium number of workers employed is 100,000. Which of the following could be an impact of sudden discrimination against workers from that group of the population?

a) none of the above

b) a new equilibrium number of workers employed of 80,000

c) a new equilibrium number of workers employed of 180,000

d) a new equilibrium wage of $18

3) Children, senior citizens, and full-time workers

a) do not make up a significant number of U.S. residents in poverty

b) combined make up more than half of U.S. residents in poverty

c) are not included in U.S. poverty rate calculations

d) are not eligible to receive welfare from the federal government

Answer 1

1) Absolute poverty definition specifies a minimum level of quantitative income while Relative poverty definition specifies a comparitive level of income without any specified amount, As the median income can vary and the median is not explicitly specified, the given poverty line set in the US falls in the category of relative definition. Option d) is correct.

2) Discrimination of workers will leave the group of population in a worse-off situation. This happens only in option b) where the number of workers employed decreases. In option c) and d) workers are better off. Option b) is correct.

3) Children and senior citizens are less prone to poverty due to various welfare schemes. Option a) is correct.