Economics Chapter 12 and 14 review
CHAPTER 12 & 14 REVIEW
INCOME DISTRIBUTION, POVERTY, AND DISCRIMINATION
Wealth: Income:
What you own minus what you includes pay checks or wages, gov check, or
Owe (includes hat you have in the dividend check or profit from selling an
Bank and assets you own) investment (can have neg. income) Lorenz Curve= a graph of the actual cumulative distribution of income compared to a perfectly equal cumulative distribution of income
*for the US, income is NOT equally distributed
*area between dots and line shows how unequal money is distributed
Absolute poverty:
a dollar figure that represents some level of income per year required to purchase some minimum amount of goods and services essential to meeting a person’s basic needs
Relative poverty:
level of income that places a person of family in the lowest 20% of all eprsons or families receiving income
The poverty line:
the level of income below which a person or family considered to be poor - in absolute terms it is based on the cost of a minimum diet multiplied by 3 ~USDA—the low cost plan to feed a family of 4 costs $697.50 a month ($8,370 a year)
to be poor…..
Need to have income of $22,811 a year
Working minimum wage job ($7.50/hour, 40 hours/week)
ANTIPOVERTY PROGRAMS:
Cash Transfers
Government programs that provide eligible people with cash payments needed to purchase basic needs
Social Security (FICA)
Unemployment compensation
Temporary Assistance to Needy Families or TANF (states have broad discretion to determine eligibility and benefit levels. families can’t receive benefits for longer than 60 days, unwed teenage parents must stay in school and live at home, and people convicted of drug felonies cant receive TANF or food stamps. Non working adults must participate in comm. Service and must find work w/in 2 years, parents with kids under age 1 don’t have to find work asap)
In-Kind Transfers
Programs that raise the standard of
INCOME DISTRIBUTION, POVERTY, AND DISCRIMINATION
Wealth: Income:
What you own minus what you includes pay checks or wages, gov check, or
Owe (includes hat you have in the dividend check or profit from selling an
Bank and assets you own) investment (can have neg. income) Lorenz Curve= a graph of the actual cumulative distribution of income compared to a perfectly equal cumulative distribution of income
*for the US, income is NOT equally distributed
*area between dots and line shows how unequal money is distributed
Absolute poverty:
a dollar figure that represents some level of income per year required to purchase some minimum amount of goods and services essential to meeting a person’s basic needs
Relative poverty:
level of income that places a person of family in the lowest 20% of all eprsons or families receiving income
The poverty line:
the level of income below which a person or family considered to be poor - in absolute terms it is based on the cost of a minimum diet multiplied by 3 ~USDA—the low cost plan to feed a family of 4 costs $697.50 a month ($8,370 a year)
to be poor…..
Need to have income of $22,811 a year
Working minimum wage job ($7.50/hour, 40 hours/week)
ANTIPOVERTY PROGRAMS:
Cash Transfers
Government programs that provide eligible people with cash payments needed to purchase basic needs
Social Security (FICA)
Unemployment compensation
Temporary Assistance to Needy Families or TANF (states have broad discretion to determine eligibility and benefit levels. families can’t receive benefits for longer than 60 days, unwed teenage parents must stay in school and live at home, and people convicted of drug felonies cant receive TANF or food stamps. Non working adults must participate in comm. Service and must find work w/in 2 years, parents with kids under age 1 don’t have to find work asap)
In-Kind Transfers
Programs that raise the standard of