Question 1

Wealth differs from income because

Accepted Answer

A) income is a stock and wealth is a flow. 
B) wealth is derived from income. 
C) income is what you earn and wealth is what you own. 
D) income is what you own and wealth is what you earn. 
E) wealth is preferable to income. 
A) income is a stock and wealth is a flow. 
B) wealth is derived from income. 
C) income is what you earn and wealth is what you own. 
D) income is what you own and wealth is what you earn. 
E) wealth is preferable to income.

Question 2

Use the figure below to answer the following question.   Figure 18.3.3
-Refer to Figure 18.3.3.At any given level of employment for high-skilled and low-skilled workers,the vertical distance between the two supply curves

Accepted Answer

A) disappears if there is free entry into the skill market. 
B) disappears if there is equal pay for work of equal value. 
C) is created by discrimination against low-skilled workers. 
D) is the compensation required for the cost of acquiring human capital. 
E) equals the value of marginal product of skill. 
A) disappears if there is free entry into the skill market. 
B) disappears if there is equal pay for work of equal value. 
C) is created by discrimination against low-skilled workers. 
D) is the compensation required for the cost of acquiring human capital. 
E) equals the value of marginal product of skill.

Question 3

Which of the following statements is false? Human capital

Accepted Answer

A) is the accumulated skill and knowledge of human beings. 
B) is costly to acquire. 
C) increases from on-the-job training. 
D) increases from higher wages. 
E) increases from education. 
A) is the accumulated skill and knowledge of human beings. 
B) is costly to acquire. 
C) increases from on-the-job training. 
D) increases from higher wages. 
E) increases from education.

Question 4

If the supply of labour curve is upward sloping but not vertical,and if the value of marginal product of labour increases,

Accepted Answer

A) the supply of labour increases. 
B) the wage rate rises. 
C) the marginal cost of production increases. 
D) the exploitation of workers decreases. 
E) employment is unchanged. 
A) the supply of labour increases. 
B) the wage rate rises. 
C) the marginal cost of production increases. 
D) the exploitation of workers decreases. 
E) employment is unchanged.

Question 5

A welfare trap occurs when the marginal tax rate is

Accepted Answer

A) negative. 
B) zero. 
C) 100% or more. 
D) positive. 
E) less than the average tax rate. 
A) negative. 
B) zero. 
C) 100% or more. 
D) positive. 
E) less than the average tax rate.

Question 6

Use the figure below to answer the following questions.   Figure 18.1.1
-In Figure 18.1.1,the second poorest 20 percent of all families receive what share of income?

Accepted Answer

A) 10 percent 
B) 20 percent 
C) 30 percent 
D) 40 percent 
E) 50 percent 
A) 10 percent 
B) 20 percent 
C) 30 percent 
D) 40 percent 
E) 50 percent

Question 7

In 2015,the poorest 20 percent of Canadian households received what percentage of the nation's after-tax income?

Accepted Answer

A) 13.0 percent 
B) 7.2 percent 
C) 20.2 percent 
D) 17.8 percent 
E) 23.3 percent 
A) 13.0 percent 
B) 7.2 percent 
C) 20.2 percent 
D) 17.8 percent 
E) 23.3 percent

Question 8

A proportional income tax

Accepted Answer

A) taxes lower income by a larger percentage than higher income. 
B) taxes lower income by a smaller percentage than higher income. 
C) is the tax system used by Canada's federal government. 
D) taxes income at a constant rate. 
E) taxes everyone the same amount. 
A) taxes lower income by a larger percentage than higher income. 
B) taxes lower income by a smaller percentage than higher income. 
C) is the tax system used by Canada's federal government. 
D) taxes income at a constant rate. 
E) taxes everyone the same amount.

Question 9

Complete the following sentence.Passing on wealth from one generation to another

Accepted Answer

A) can decrease the inequality of wealth. 
B) will decrease the inequality of income. 
C) is limited since the government taxes this at a very high marginal tax rate. 
D) is one of the main causes of social unrest. 
E) will make the distribution of wealth more closely match the distribution of human capital. 
A) can decrease the inequality of wealth. 
B) will decrease the inequality of income. 
C) is limited since the government taxes this at a very high marginal tax rate. 
D) is one of the main causes of social unrest. 
E) will make the distribution of wealth more closely match the distribution of human capital.

Question 10

Since 1976 the Canadian Gini ratio has

Accepted Answer

A) decreased and then increased. 
B) decreased. 
C) increased,with the main increase occurring during the 1990s. 
D) been approximately equal to zero. 
E) increased,with the main increase occurring during the 2000s. 
A) decreased and then increased. 
B) decreased. 
C) increased,with the main increase occurring during the 1990s. 
D) been approximately equal to zero. 
E) increased,with the main increase occurring during the 2000s.

Question 11

The inequality in the distribution of wealth is

Accepted Answer

A) less than the inequality in the distribution of income. 
B) decreased by the existence of assortative mating. 
C) a better measure of the inequality in the distribution of economic resources than is the inequality in the distribution of income. 
D) shown by a Lorenz curve that is farther away from the line of equality than the Lorenz curve for income. 
E) the result of an increasing Gini coefficient. 
A) less than the inequality in the distribution of income. 
B) decreased by the existence of assortative mating. 
C) a better measure of the inequality in the distribution of economic resources than is the inequality in the distribution of income. 
D) shown by a Lorenz curve that is farther away from the line of equality than the Lorenz curve for income. 
E) the result of an increasing Gini coefficient.

Question 12

Economic efficiency and economic equity have what relationship?

Accepted Answer

A) Redistribution of income reduces economic equality while it increases economic efficiency. 
B) Income is equitably distributed in free market systems without intervention by government. 
C) There is a no tradeoff between the two. 
D) There is a tradeoff between equality and efficiency. 
E) More equality is generally more efficient. 
A) Redistribution of income reduces economic equality while it increases economic efficiency. 
B) Income is equitably distributed in free market systems without intervention by government. 
C) There is a no tradeoff between the two. 
D) There is a tradeoff between equality and efficiency. 
E) More equality is generally more efficient.

Question 13

If the area between the line of equality and the Lorenz curve is 1,250 and the entire area beneath the line of equality is 5,000,the Gini ratio is

Accepted Answer

A) 1,250. 
B) 0.80. 
C) 0.25. 
D) 0.33. 
E) 4.00. 
A) 1,250. 
B) 0.80. 
C) 0.25. 
D) 0.33. 
E) 4.00.

Question 14

Refer to the table below to answer the following questions.
Table 18.4.2
  
-Refer to Table 18.4.2.The table shows three tax payment schemes.Which tax payment plan reduces inequality?

Accepted Answer

A) Plan A 
B) Plan A and Plan C 
C) Plan C 
D) Plan B 
E) Plan A,Plan B,and Plan C 
A) Plan A 
B) Plan A and Plan C 
C) Plan C 
D) Plan B 
E) Plan A,Plan B,and Plan C

Question 15

Use the figure below to answer the following question.   Figure 18.3.4
-Refer to Figure 18.3.4.At an employment level of 30 hours per week,the compensation required for the cost of acquiring human capital is

Accepted Answer

A) $0. 
B) $2 an hour. 
C) $4 an hour. 
D) $6 an hour. 
E) cannot be determined without knowing the demand for labour. 
A) $0. 
B) $2 an hour. 
C) $4 an hour. 
D) $6 an hour. 
E) cannot be determined without knowing the demand for labour.

Question 16

Use the figure below to answer the following questions.   Figure 18.1.2
-Consider the Lorenz curves in Figure 18.1.2.Which Lorenz curve corresponds to the greatest income inequality?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
E) impossible to tell without additional information 
A) A 
B) B 
C) C 
D) D 
E) impossible to tell without additional information

Question 17

Use the figure below to answer the following questions.   Figure 18.1.2
-Consider the Lorenz curves in Figure 18.1.2.Which point indicates that the richest 20 percent of families earn 60 percent of the income?

Accepted Answer

A) a 
B) b 
C) c 
D) d 
E) the origin 
A) a 
B) b 
C) c 
D) d 
E) the origin

Question 18

Use the figure below to answer the following questions.   Figure 18.1.2
-Consider the Lorenz curves in Figure 18.1.2.Which point indicates that the poorest 20 percent of families earn 9 percent of the income?

Accepted Answer

A) a 
B) b 
C) c 
D) d 
E) the origin 
A) a 
B) b 
C) c 
D) d 
E) the origin

Question 19

In Canada,the low-income cut-off level for a family is when ________ or more of income is spent on food,shelter,and clothing.

Accepted Answer

A) 33.6 percent 
B) 43.6 percent 
C) 53.6 percent 
D) 63.6 percent 
E) 73.6 percent 
A) 33.6 percent 
B) 43.6 percent 
C) 53.6 percent 
D) 63.6 percent 
E) 73.6 percent

Question 20

If the average tax rate increases as income increases,the income tax is

Accepted Answer

A) progressive. 
B) proportional. 
C) negative. 
D) regressive. 
E) excessive. 
A) progressive. 
B) proportional. 
C) negative. 
D) regressive. 
E) excessive.

Wealth differs from income because

Use the figure below to answer the following question. Figure 18.3.3 -Refer to Figure 18.3.3.At any given level of employment for high-skilled and low-skilled workers,the vertical distance between the two supply curves

Which of the following statements is false? Human capital

If the supply of labour curve is upward sloping but not vertical,and if the value of marginal product of labour increases,

A welfare trap occurs when the marginal tax rate is

Use the figure below to answer the following questions. Figure 18.1.1 -In Figure 18.1.1,the second poorest 20 percent of all families receive what share of income?

In 2015,the poorest 20 percent of Canadian households received what percentage of the nation's after-tax income?

A proportional income tax

Complete the following sentence.Passing on wealth from one generation to another

Since 1976 the Canadian Gini ratio has

The inequality in the distribution of wealth is

Economic efficiency and economic equity have what relationship?

If the area between the line of equality and the Lorenz curve is 1,250 and the entire area beneath the line of equality is 5,000,the Gini ratio is

Refer to the table below to answer the following questions. Table 18.4.2 -Refer to Table 18.4.2.The table shows three tax payment schemes.Which tax payment plan reduces inequality?

Use the figure below to answer the following question. Figure 18.3.4 -Refer to Figure 18.3.4.At an employment level of 30 hours per week,the compensation required for the cost of acquiring human capital is

Use the figure below to answer the following questions. Figure 18.1.2 -Consider the Lorenz curves in Figure 18.1.2.Which Lorenz curve corresponds to the greatest income inequality?

Use the figure below to answer the following questions. Figure 18.1.2 -Consider the Lorenz curves in Figure 18.1.2.Which point indicates that the richest 20 percent of families earn 60 percent of the income?

Use the figure below to answer the following questions. Figure 18.1.2 -Consider the Lorenz curves in Figure 18.1.2.Which point indicates that the poorest 20 percent of families earn 9 percent of the income?

In Canada,the low-income cut-off level for a family is when ________ or more of income is spent on food,shelter,and clothing.

If the average tax rate increases as income increases,the income tax is

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Filters

Exam 18: Economic Inequality

Wealth differs from income because

Use the figure below to answer the following question. Figure 18.3.3 -Refer to Figure 18.3.3.At any given level of employment for high-skilled and low-skilled workers,the vertical distance between the two supply curves

Which of the following statements is false? Human capital

If the supply of labour curve is upward sloping but not vertical,and if the value of marginal product of labour increases,

A welfare trap occurs when the marginal tax rate is

Use the figure below to answer the following questions. Figure 18.1.1 -In Figure 18.1.1,the second poorest 20 percent of all families receive what share of income?

In 2015,the poorest 20 percent of Canadian households received what percentage of the nation's after-tax income?

A proportional income tax

Complete the following sentence.Passing on wealth from one generation to another

Since 1976 the Canadian Gini ratio has

The inequality in the distribution of wealth is

Economic efficiency and economic equity have what relationship?

If the area between the line of equality and the Lorenz curve is 1,250 and the entire area beneath the line of equality is 5,000,the Gini ratio is

Refer to the table below to answer the following questions. Table 18.4.2 -Refer to Table 18.4.2.The table shows three tax payment schemes.Which tax payment plan reduces inequality?

Use the figure below to answer the following question. Figure 18.3.4 -Refer to Figure 18.3.4.At an employment level of 30 hours per week,the compensation required for the cost of acquiring human capital is

Use the figure below to answer the following questions. Figure 18.1.2 -Consider the Lorenz curves in Figure 18.1.2.Which Lorenz curve corresponds to the greatest income inequality?

Use the figure below to answer the following questions. Figure 18.1.2 -Consider the Lorenz curves in Figure 18.1.2.Which point indicates that the richest 20 percent of families earn 60 percent of the income?

Use the figure below to answer the following questions. Figure 18.1.2 -Consider the Lorenz curves in Figure 18.1.2.Which point indicates that the poorest 20 percent of families earn 9 percent of the income?

In Canada,the low-income cut-off level for a family is when ________ or more of income is spent on food,shelter,and clothing.

If the average tax rate increases as income increases,the income tax is

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Filters