Suppose that Angelo and Sonia each win $500 in a charity raffle. Angelo spends h

Question

Suppose that Angelo and Sonia each win $500 in a charity raffle. Angelo spends his winnings on a new ipad. Sonia saves her winnings. Which of the following is correct? a. Both Angelo's and Sonia's behavior suggest that they base their purchasing decisions on permanent income. b. Angelo's behavior suggests that he bases his purchasing decisions on transitory income rather than permanent income. Sonia's behavior suggest that she bases her purchasing decisions on permanent income rather than transitory income ?? C. Angelo's behavior suggests that he bases his purchasing decisions on permanent income rather than transitory income. Sonia's behavior suggests that she bases her purchasing decisions on transitory income rather than permanent income. d. Both Angelo's and Sonia's behavior suggest that they base their purchasing decisions on transitory income. QUESTION 2 1 points / Saved Comparing the United States household income distribution to other countries is a. problematic, because countries collect data in different ways. b. easy, because some countries collect data on expenditures instead of incomes. c. easy, because data is available for all countries in the world. d.problematic, because international agreements require countries to standardize their income accounting procedures. QUESTION 3 1 points Save Answer Liberalism is founded on a premise that behind a "veil of ignorance," a. justice cannot be agreed upon. b. society should maximize the sum of individual utilities. c. everyone d. everyone's income should be equal. would agree to "just" rules to reallocate income.

Explanation / Answer

2) c) Easy because data is available for all countries in the world. The US makes its income data available to all countries for comparisons.

3) b) Society should maximize the sum of individual utilities. Utilitarianism is the maximizing the utility of least well of the member in the society.

6) False, the Poverty rate is the percentage of the population whose family income falls below an absolute level which is the poverty line and poverty line is that absolute level of income set by the Feds below which a family is said to be in poverty.

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