If the Poverty Line Is $16,000 for a Family of Four

question 12

Multiple Choice

If the poverty line is $16,000 for a family of four and the U.S. has 100 million such families, with 25 million of these families having incomes of $12,000 and 75 million having incomes of $20,000. This means the poverty gap would be

• A)zero, because the income numbers average out at $16,000.
• B)negative, because there are more above the poverty line than below it.
• C)$100 billion, because there are 25 million families $4000 below the poverty line.
• D)$400 billion, because there are 100 million families and many are $4000 below the poverty line.

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Definitions:

Money Income

Income measured in terms of money received from employment, investments, or other sources, rather than in terms of goods or services.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level, at a specific time.

Vanilla Ice Cream

A basic flavor of ice cream made primarily with vanilla extract.

Chocolate Ice Cream

A frozen dessert made from dairy products and flavored with cocoa or chocolate.