How is the dividing line between poverty and nonpoverty measured? Does this method overstate the degree of poverty?
Originally, the poverty line was established at $3,000 for family income in 1964 . The line has since been modified to account for differences in family size and location (urban or rural) and is adjusted annually to reflect changes in the cost of living. This method emphasizes cash income as the measure of income and may overstate the actual degree of poverty. Some critics have suggested that a better measure of income should include in-kind income, such as public education, public housing, subsidized health care, food, etc. If these were included (measured), poverty would certainly be less but probably not entirely eliminated.
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The graph shows the market for cell phones. The government imposes a sales tax on cell phones at $10 a cell phone. The excess burden of the sales tax on cell phones is
A) $20,000. B) $15,000. C) $35,000. D) $7,500. E) $30,000.
A study conducted by Alberto Alesina and Lawrence Summers concluded that countries with ________ had lower inflation rates than countries with ________
A) a large government debt; little to no government debt B) highly independent central banks; central banks that have little independence C) low rates of unemployment; high rates of unemployment D) no private banking system; an independent banking system
Harmonization of standards refers to
A) the elimination of tariffs and quotas by trading partners. B) common product safety, environment, labor, and fair competition standards agreed upon by trading partners. C) the acceptance or keeping of a trading partner's standards as valid and sufficient by another trading partner. D) separate standards held by different trading partners which other partners refuse to recognize.
A firm is currently producing 1140 units of output according to the production function q = L4/3K1/2 and faces input prices equal to w = $20 and r = $80. In the short run, capital is fixed at 5 units. In the long run, the firm's costs are
A) lower because the firm substitutes towards more labor and away from capital. B) lower because the firm substitutes towards more capital and away from labor. C) higher because the firm substitutes towards more labor and away from capital. D) higher because the firm substitutes towards more capital and away from labor.