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Any poverty line will be somewhat arbitrary, and it is useful to have a poverty line whose basic definition does not change much over time. If Congress voted every few years to redefine what poverty means, then it would be difficult to compare rates over time. After all, would a lower poverty rate mean that the definition had been changed, or that people were actually better off? Government statisticians at the U.S. Census Bureau have ongoing research programs to address questions like these.

Key concepts and summary

Wages are influenced by supply and demand in labor markets, which can lead to very low incomes for some people and very high incomes for others. Poverty and income inequality are not the same thing. Poverty applies to the condition of people who cannot afford the necessities of life. Income inequality refers to the disparity between those with higher and lower incomes. The poverty rate is what percentage of the population lives below the poverty line, which is determined by the amount of income that it takes to purchase the necessities of life. Choosing a poverty line will always be somewhat controversial.


In country A, the population is 300 million and 50 million people are living below the poverty line. What is the poverty rate?

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In country B, the population is 900 million and 100 million people are living below the poverty line. What is the poverty rate?

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Federal Register: The Daily Journal of the United States Government. “State Median Income Estimates for a Four-Person Household: Notice of the Federal Fiscal Year (FFY) 2013 State Median Income Estimates for Use Under the Low Income Home Energy Assistance Program (LIHEAP).” Last modified March 15, 2012. https://www.federalregister.gov/articles/2012/03/15/2012-6220/state-median-income-estimates-for-a-four-person-household-notice-of-the-federal-fiscal-year-ffy-2013#t-1.

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Questions & Answers

the relationship between two concept supply and Demand
Lebogang Reply
what is globalization
Nuertey Reply
what is the best definition of economic?
Humble Reply
what is aggregat demand in open economy
Dagim Reply
Aggregate demand is expressed as the total amount of money exchanged for those goods and services at a specific price level and point in time.
What is the full meaning of GDP
Akinbulejo Reply
gross domestic product
Gross Domestic Product
Formula for calculating the percentage of change in price, quantity, price elasticity of demand
Augustina Reply
Given that the elasticity of supply for a good is 2 and the percentage change in price is 45%.What is the percentage change in quantity supplied
Mbe Reply
Please don't understand
percentage change should be 44%
state and explainfour function of a costumer service
Egba Reply
the circular flow model of the economy is a simplification showing how the economy works and the relationship between income,production and spending in the economy as a whole
Anna Reply
It is an idea that show us the way the economy works about their income, production, and spending in the economy
what is circular flow
Ntokozo Reply
what is economics?
Dorcas Reply
Economics is defined as the science that study human behaviour as a relationship between ends and scarce means which have alternative uses.
economics is a social science concerned with the production,distribution, and consumption of goods and services
Economics as a science studies human behaviour as a relationship between ends and scarce means with alternative use.
economics can be defined as social science which studies human behavior as a relationship between ends and scare means which have alternative uses.... Lionel C Robins
in 2021 Amazon reduced the annual subscription fee for its prime membership service which provides free two_day shipping on many goods and other benefits, from $119 to $99. Zoppa consulting, an investment firm estimated that before the price reduction, prime had 62million subscribers globally. If so, what is the arc elasticity of demand for a prime membership.
Joan Reply
Differences between microeconomics and macroeconomics
tatiana Reply
Macroeconomics deal with the economy as a whole.that is an economy affect the firm ,government and the households eg.unemployment, whilst Microeconomics deal with the the decision making of households,firm and government separately.
Microeconomics is the branch of economic which studies the behaviour of individual households, firms and industries whiles macroeconomic studies the economy as a whole. It looks at the economy from a a broader perspective.
what is Economics
Ebem Reply
the branch of knowledge concerned with the production, consumption, and transfer of wealth and has Influence by sociology!!!!
Economics is the study of how humans make decisions when they want to fulfil their requirements and desires for goods, services and resources.
Economics is the study how humans make decisions in the faces of scarcity.
economic is the study of how human make decision in the fact of scarcity.
Economics is a social science which study human behavior as a relationship between earn and scarce mean which have alternative uses
what is market structure
market structure in economics depicts how firms are differentiated and categorised based on types of goods they sell and how their operations are affected by external factors and elements.
what is economic theory
what is demand
Gooluck Reply
demand is the willingness to purchase something
demand is the potential ability or williness to purchases something at a particular price at a given period of time..
Demand refers to as quantities of a goods and services in which consumers are willing and able to purchase at a given period of time. Demand can also be defined as the desire backed by ability to purchase .

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Source:  OpenStax, Principles of economics. OpenStax CNX. Sep 19, 2014 Download for free at http://legacy.cnx.org/content/col11613/1.11
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