Question 1

-In the figure above in the market for high-skilled labor, the equilibrium wage rate is

Accepted Answer

A)  $8. 
B)  $4. 
C)  $10. 
D)  $14. 
A)  $8. 
B)  $4. 
C)  $10. 
D)  $14.

Question 2

A progressive tax is a tax that taxes income so that the average tax rate increases with income.

Accepted Answer

A) True 
 B)False

Question 3

If customer discrimination does not exist, firms that discriminate on the basis of race or sex will

Accepted Answer

A)  have higher costs than those that do not. 
B)  have the same level of costs as those that do not. 
C)  have lower costs than those that do not. 
D)  tend to survive whereas firms that do not discriminate will tend to fail. 
A)  have higher costs than those that do not. 
B)  have the same level of costs as those that do not. 
C)  have lower costs than those that do not. 
D)  tend to survive whereas firms that do not discriminate will tend to fail.

Question 4

-In the figure above, in which country do the lowest-income 30 percent of households have the highest fraction of the nation's income?

Accepted Answer

A)  Country A 
B)  Country B 
C)  Country C 
D)  It is impossible to answer the question without more information. 
A)  Country A 
B)  Country B 
C)  Country C 
D)  It is impossible to answer the question without more information.

Question 5

The Lithuanian tax rate for all citizens' income is 24 percent and in Estonia, the tax rate is 21 percent. Lithuanian and Estonian income tax systems are examples of ________ taxes.

Accepted Answer

A)  proportional 
B)  progressive 
C)  regressive 
D)  equality 
A)  proportional 
B)  progressive 
C)  regressive 
D)  equality

Question 6

In the United States, the poorest 50 percent of households own about ________ of total wealth.

Accepted Answer

A)  1 percent 
B)  10 percent 
C)  20 percent 
D)  30 percent 
A)  1 percent 
B)  10 percent 
C)  20 percent 
D)  30 percent

Question 7

Is the poverty rate the lowest among Hispanic households, black households, or white households?

Accepted Answer

The poverty rate is lowest amo

Question 8

-The above table shows the distribution of wealth and income in Miseria. With respect to income, the richest twenty percent of the population earn

Accepted Answer

A)  90 percent of the income. 
B)  11 times as much as the poorest twenty percent. 
C)  9 times as much as the poorest twenty percent. 
D)  just as much as the second richest twenty percent. 
A)  90 percent of the income. 
B)  11 times as much as the poorest twenty percent. 
C)  9 times as much as the poorest twenty percent. 
D)  just as much as the second richest twenty percent.

Question 9

The distribution of income in the United States is characterized by the following relationship between the mean, median, and mode incomes:

Accepted Answer

A)  mean income < median income < mode income. 
B)  mode income < median income < mean income. 
C)  median income < mean income < mode income. 
D)  mode income < mean income < median income. 
A)  mean income < median income < mode income. 
B)  mode income < median income < mean income. 
C)  median income < mean income < mode income. 
D)  mode income < mean income < median income.

Question 10

Measured distributions of wealth that do not consider the role of human capital

Accepted Answer

A)  are more equal than the distribution of income. 
B)  overstate the inequality in wealth distribution. 
C)  are more equal than the distribution of consumption. 
D)  understate the inequality in wealth distribution. 
A)  are more equal than the distribution of income. 
B)  overstate the inequality in wealth distribution. 
C)  are more equal than the distribution of consumption. 
D)  understate the inequality in wealth distribution.

Question 11

-The above table shows the distribution of income and wealth in Miseria. What percent of income is earned by the richest 40 percent of the population?

Accepted Answer

A)  20 percent 
B)  30 percent 
C)  55 percent 
D)  70 percent 
A)  20 percent 
B)  30 percent 
C)  55 percent 
D)  70 percent

Question 12

The closer an income Lorenz curve is to the line of equality, the

Accepted Answer

A)  slower income is growing. 
B)  more equally income is distributed. 
C)  less equally income is distributed. 
D)  faster income is growing. 
A)  slower income is growing. 
B)  more equally income is distributed. 
C)  less equally income is distributed. 
D)  faster income is growing.

Question 13

-The above figure shows the Lorenz curve for wealth for the nation of Rusha. If the government were to confiscate all of the wealth from the poorest twenty percent of the population and give it to the wealthiest twenty percent, the Lorenz curve would

Accepted Answer

A)  not change. 
B)  shift farther away from the line of equality. 
C)  shift closer to the line of equality. 
D)  flip above the line of equality. 
A)  not change. 
B)  shift farther away from the line of equality. 
C)  shift closer to the line of equality. 
D)  flip above the line of equality.

Question 14

Country A has a more equal distribution of income than country B if

Accepted Answer

A)  country A's Lorenz curve is closer to the line of equality than is country B's Lorenz curve. 
B)  country B's Lorenz curve is closer to the line of equality than is country A's Lorenz curve. 
C)  country A's Lorenz curve is just as close to the line of equality as is country B's Lorenz curve. 
D)  None of the above because it is impossible to compare income inequalities across countries. 
A)  country A's Lorenz curve is closer to the line of equality than is country B's Lorenz curve. 
B)  country B's Lorenz curve is closer to the line of equality than is country A's Lorenz curve. 
C)  country A's Lorenz curve is just as close to the line of equality as is country B's Lorenz curve. 
D)  None of the above because it is impossible to compare income inequalities across countries.

Question 15

-The table above shows the distribution of income in Swacko. The government of Swacko imposes a 20 percent tax on people with the highest 40 percent of income. The government then distributes 40 percent of the tax collected to the lowest 20 percent and 30 percent to the second 20 percent and the middle 20 percent. After the redistribution, the Lorenz curve for income ________.

Accepted Answer

A)  is equal to the line of equality 
B)  equals the Lorenz curve for wealth 
C)  is closer to the line of equality 
D)  is above the line of equality 
A)  is equal to the line of equality 
B)  equals the Lorenz curve for wealth 
C)  is closer to the line of equality 
D)  is above the line of equality

Question 16

The distribution of wealth is skewed because more families are below the average level of wealth than are above.

Accepted Answer

A) True 
 B)False

Question 17

-According to the 2007/2008 United Nations Human Development Report, the Gini ratio for Portugal is 38.5, Norway is 25.8, the United States is 40.8, and Russia is 39.9. Which of these four countries has the lowest level of income equality?

Accepted Answer

A)  Portugal 
B)  United States 
C)  Norway 
D)  Russia 
A)  Portugal 
B)  United States 
C)  Norway 
D)  Russia

Question 18

-The above figure shows the Lorenz curve for wealth for the nation of Rusha. If the government were to confiscate half of the wealth from the wealthiest twenty percent of the population and give it to the poorest twenty percent, then

Accepted Answer

A)  wealth distribution would be more equal. 
B)  wealth distribution would be unchanged. 
C)  wealth distribution would be more unequal. 
D)  the Lorenz curve would shift rightward. 
A)  wealth distribution would be more equal. 
B)  wealth distribution would be unchanged. 
C)  wealth distribution would be more unequal. 
D)  the Lorenz curve would shift rightward.

Question 19

-The above table shows the distribution of wealth and income in Miseria. What percent of wealth is owned by the poorest twenty percent?

Accepted Answer

A)  0 percent 
B)  2 percent 
C)  3 percent 
D)  5 percent 
A)  0 percent 
B)  2 percent 
C)  3 percent 
D)  5 percent

Question 20

Income redistribution ________.

Accepted Answer

A)  creates an income distribution that is less equal than the market distribution 
B)  is efficient because it makes the distribution of income more equal. 
C)  eliminates the big tradeoff between rich and poor 
D)  creates a deadweight loss 
A)  creates an income distribution that is less equal than the market distribution 
B)  is efficient because it makes the distribution of income more equal. 
C)  eliminates the big tradeoff between rich and poor 
D)  creates a deadweight loss

Exam 19: Economic Inequality

-In the figure above in the market for high-skilled labor, the equilibrium wage rate is

A progressive tax is a tax that taxes income so that the average tax rate increases with income.

If customer discrimination does not exist, firms that discriminate on the basis of race or sex will

-In the figure above, in which country do the lowest-income 30 percent of households have the highest fraction of the nation's income?

The Lithuanian tax rate for all citizens' income is 24 percent and in Estonia, the tax rate is 21 percent. Lithuanian and Estonian income tax systems are examples of ________ taxes.

In the United States, the poorest 50 percent of households own about ________ of total wealth.

Is the poverty rate the lowest among Hispanic households, black households, or white households?

-The above table shows the distribution of wealth and income in Miseria. With respect to income, the richest twenty percent of the population earn

The distribution of income in the United States is characterized by the following relationship between the mean, median, and mode incomes:

Measured distributions of wealth that do not consider the role of human capital

-The above table shows the distribution of income and wealth in Miseria. What percent of income is earned by the richest 40 percent of the population?

The closer an income Lorenz curve is to the line of equality, the

-The above figure shows the Lorenz curve for wealth for the nation of Rusha. If the government were to confiscate all of the wealth from the poorest twenty percent of the population and give it to the wealthiest twenty percent, the Lorenz curve would

Country A has a more equal distribution of income than country B if

The distribution of wealth is skewed because more families are below the average level of wealth than are above.

-According to the 2007/2008 United Nations Human Development Report, the Gini ratio for Portugal is 38.5, Norway is 25.8, the United States is 40.8, and Russia is 39.9. Which of these four countries has the lowest level of income equality?

-The above figure shows the Lorenz curve for wealth for the nation of Rusha. If the government were to confiscate half of the wealth from the wealthiest twenty percent of the population and give it to the poorest twenty percent, then

-The above table shows the distribution of wealth and income in Miseria. What percent of wealth is owned by the poorest twenty percent?

Income redistribution ________.

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

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices and Public Goods

Externalities and the Environment

Markets for Factors of Production

Uncertainty and Information

Extension A: Review

Extension B: Review

Extension C: Review

Extension D: Review

Extension E: Review

Extension F: Review

Filters

$-In the figure above, in which country do the lowest-income 30 percent of households have the highest fraction of the nation's income?$ -In the figure above, in which country do the lowest-income 30 percent of households have the highest fraction of the nation's income?