ECON 200 Chapter Notes - Chapter 20: Marginal Utility, Political Philosophy, Negative Income Tax
Document Summary
Poverty rate: percentage of the population whose family income falls below an absolute level called the poverty line. Poverty line: absolute level of income set by the federal government for each family size below which a family is deemed to be in poverty. Poverty is correlated with race (black/hispanic), age (young), family composition (single and female). Based on money when poor families receive nonmonetary items like food stamps. In-kind transfers: transfers to the poor given in the form of goods and services rather than cash. Life cycle: the regular pattern of income variation over a person"s life. Change in income doesn"t account for savings and debts. Unexpected changes can cause high or low income for one year. (frost) Inequality in material standard of living is much smaller than income. Utilitarianism: political philosophy according to which the government should choose policies to maximize the total utility of everyone in society. Utility: a measure of happiness or satisfaction.