would be about $17 per day. To put this in perspective, most cities have restaurants where $17 will buy you an

appetizer for one.

This chapter explores how the U.S. government defines poverty, the balance between assisting the poor

without discouraging work, and how federal antipoverty programs work. It also discusses income
inequality—how economists measure inequality, why inequality has changed in recent decades, the range of
possible government policies to reduce inequality, and the danger of a tradeoff that too great a reduction in

inequality may reduce incentives for producing output.

15.1 Drawing the Poverty Line

LEARNING OBJECTIVES

By the end of this section, you will be able to:

• Explain economic inequality and how the poverty line is determined

• Analyze the U.S. poverty rate over time, noting its prevalence among different groups of citizens

Comparisons of high and low incomes raise two different issues: economic inequality and poverty. Poverty is
{"source_file": "downloads\\business\\economics\\Microeconomics3e.pdf", "file_hash": "830b81f41611ac67a490444dbb5d6aed292224606965b06965b914443c93331a", "uploaded_via": "batch_uploader", "creator": "PDFMiner", "title": "Principles of Microeconomics 3e", "batch_upload": true, "producer": "Prince 14.2 (www.princexml.com)", "upload_timestamp": "2026-02-07T15:37:44.339247", "file_type": ".pdf", "total_pages": 597, "source": "downloads\\business\\economics\\Microeconomics3e.pdf", "file_name": "Microeconomics3e.pdf", "moddate": "2022-12-07T14:23:05-06:00", "file_size_mb": 26.99, "creationdate": "2022-12-07T14:15:44-06:00"}