Absolute Poverty Measures Vary from Country to Country

question 22

Multiple Choice

Absolute poverty measures vary from country to country.For example,in 2011,the poverty line in the United States for a family of four with two children was an annual income of $22,350 but economists often use a much lower threshold income of $1 per day when calculating the rate of poverty in poor countries.How is this absolute poverty measured?

• A) by comparing the percentage of households living below the poverty line to the total population
• B) by comparing a household's income to the income required to maintain the average standard of living in a society at a particular time
• C) by comparing the amount of goods and services that a household's income can purchase to an objective measure of the amount of income needed to sustain a certain predetermined standard of living
• D) by comparing the amount of goods and services that a household's income can purchase in one country to the amount of goods and services that a household's income can purchase in another country of comparable living standard

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Definitions:

Sellers

Individuals or entities that offer goods or services for sale to buyers in the market.

Perfect Competition

A market structure characterized by a large number of small firms, identical products, and free entry and exit which leads to firms selling at the market price.

Demand Curves

Graphical representations showing the relationship between the price of a good and the quantity demanded, assuming other factors remain constant.

Monopoly Model

An economic model describing a market where a single seller controls the market supply of a product which has no close substitutes.