Measuring Poverty Using an Absolute Income Scale Like the Poverty

question 173

Multiple Choice

Measuring poverty using an absolute income scale like the poverty line can be misleading because

• A)income measures do not include the value of in-kind transfers.
• B)money is more highly valued by the rich than by the poor.
• C)the poor are not likely to participate in the labor market.
• D)income measures are not adjusted for the effects of labor-market discrimination.

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Definitions:

Pollution

The contamination of the environment with harmful or poisonous substances, adversely affecting the health of living organisms and ecosystems.

External Costs

Costs of an economic activity that are not borne by the participants but rather by other people or society at large.

Tax

A compulsory financial charge imposed by a government on individuals or entities to fund various public expenditures.

Marginal Social Benefit

An additional gain to society derived from consuming or producing another unit of a good or service.