Question

Because it costs more to live in cities than it does to live in rural areas the

A. poverty line is set too high in cities and too low in rural areas.

B. poverty line is set too low in cities and too high in rural areas.

C. poverty rate is overstated in cities and understated in rural areas.

D. true poverty rate is higher than the government reports it to be.

Answer 1

Option B

• Poverty line is the minimum expenditure or income required to fulfill the basic needs or to achieve the minimum utility level which is required to live in the world and to buy the things they need.
• The poverty line will change from one country to another and from one society to another.
• This line is set too low in cities when compared to the rural areas.
• This is because in cities having large households face higher cost of living like high housing costs and rising food prices which are the basic necessities for all.
• Hence their poverty line is kept low to achieve the minimum ability level.
• The rural areas face low housing costs and low food prices when compared to cities.Hence their poverty line is kept high.