Question

To establish the poverty line that divides poor and nonpoor families, the government a. multiplies the cost of a minimal diet by three. b. multiplies the cost of a minimal diet by five. c. adds 50 percent to the cost of a minimal diet. d. adds 100 percent to the cost of a minimal diet.

Short answer

a. Multiplies the cost of a minimal diet by three.

Step-by-step solution

Option A: Multiplying by three

According to the United States Department of Health and Human Services, the poverty line is determined by multiplying the cost of a minimal food diet by three. This is based on the assumption that the food expenses are approximately one-third of a family's total expenses.

Option B: Multiplying by five

This option involves multiplying the cost of a minimal diet by five. However, this is not the method used by the government to establish the poverty line.

Option C: Adding 50 percent

Adding 50 percent to the cost of a minimal diet would only account for half of the other necessary expenses in a family's budget. This is not the method used by the government to establish the poverty line.

Option D: Adding 100 percent

Adding 100 percent to the cost of a minimal diet would result in doubling the cost of the basic food diet, but this also does not accurately represent the method used by the government to establish the poverty line. Based on the analysis we've done, the correct answer is:

Answer:

a. Multiplies the cost of a minimal diet by three.

Key concepts

Minimal Diet Cost

Understanding the minimal diet cost is key in determining the baseline for what constitutes the minimum acceptable standard of living. This concept involves calculating the least amount of money needed to meet a person's basic nutritional requirements. To define this, governments and organizations rely on nutritional guidelines and average food prices to determine the minimum cost for a diet sufficient to maintain health.

For educational purposes, imagine creating a grocery list that includes only the most affordable items that can still provide all the necessary nutrients. Such a list would consist of bulk grains, legumes, seasonal fruits, vegetables, and the least expensive sources of protein such as eggs or canned tuna. The total cost of these items over a specific period, often a month, gives us the minimal diet cost.

Poverty Line Determination

The process of poverty line determination is central to social policy and the evaluation of economic well-being in a society. The poverty line is the threshold below which families or individuals are considered to be living in poverty, lacking the resources to meet basic living expenses.

In the exercise, the poverty line was established by taking the minimal diet cost and multiplying it by three. This method is derived from historical spending patterns where a family's food budget was roughly one-third of their total expenditures, thus by tripling the minimal diet cost, a broader standard of living is accounted for. This includes securing not only nutrition but shelter, clothing, healthcare, and education. It's worth noting that this multiplier is not static and can be reassessed to reflect changes in spending patterns over time.

Government Poverty Threshold

The government poverty threshold is an officially recognized level of income set to distinguish who is considered poor in a country. This metric has tangible policy implications, as it is used to determine eligibility for various social services and assistance programs.

The threshold varies from country to country and can be influenced by factors such as cost of living, inflation rates, and demographic considerations. In the United States, for example, the Department of Health and Human Services updates the poverty guidelines annually, affecting access to programs like Medicaid and the Supplemental Nutrition Assistance Program (SNAP). It is a critical tool in analyzing socioeconomic disparities, measuring progress against poverty, and targeting aid to those most in need.