Question 1

________ is the single biggest factor affecting income distribution in the United States.

Accepted Answer

A)  Location of household 
B)  Type of household 
C)  Education 
D)  Age of household 
A)  Location of household 
B)  Type of household 
C)  Education 
D)  Age of household

Question 2

A Lorenz curve graphs the

Accepted Answer

A)  percentage of income or wealth against the percentage of households. 
B)  cumulative percentage of income or wealth against the cumulative percentage of households. 
C)  cumulative value of income against the cumulative percentage of households. 
D)  percentage of wealth against the percentage of income. 
A)  percentage of income or wealth against the percentage of households. 
B)  cumulative percentage of income or wealth against the cumulative percentage of households. 
C)  cumulative value of income against the cumulative percentage of households. 
D)  percentage of wealth against the percentage of income.

Question 3

Which of the following is NOT a government-run income maintenance program?

Accepted Answer

A)  Social Security 
B)  unemployment compensation 
C)  temporary Assistance of Needy Households 
D)  life insurance 
A)  Social Security 
B)  unemployment compensation 
C)  temporary Assistance of Needy Households 
D)  life insurance

Question 4

A proportional income tax is defined as a tax for which

Accepted Answer

A)  total taxes paid increase with the level of income. 
B)  total taxes paid are independent of the level of income. 
C)  the average tax rate increases with the level of income. 
D)  the average tax rate is the same at all levels of income. 
A)  total taxes paid increase with the level of income. 
B)  total taxes paid are independent of the level of income. 
C)  the average tax rate increases with the level of income. 
D)  the average tax rate is the same at all levels of income.

Question 5

Discrimination ________ the group being discriminated against and ________ the group being favored.

Accepted Answer

A)  decreases the demand for; increases the demand for 
B)  increases the demand for; decreases the demand for 
C)  decreases the supply of; increases the supply of 
D)  increases the supply of; decreases the supply of 
A)  decreases the demand for; increases the demand for 
B)  increases the demand for; decreases the demand for 
C)  decreases the supply of; increases the supply of 
D)  increases the supply of; decreases the supply of

Question 6

-The government in the country of Zappoo is trying to decide which tax plan to implement. The table above shows three alternative plans. If the government decides to implement a proportional income tax, it will implement tax plan ________.

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  None of the above because none of the above are proportional taxes. 
A)  A 
B)  B 
C)  C 
D)  None of the above because none of the above are proportional taxes.

Question 7

-In the above table, which tax plan is progressive?

Accepted Answer

A)  only plan A 
B)  only plan B 
C)  only plan C 
D)  both plan B and plan C 
A)  only plan A 
B)  only plan B 
C)  only plan C 
D)  both plan B and plan C

Question 8

The world distribution of income has become more equal since 1970 because

Accepted Answer

A)  the distribution of income within most countries has become more equal. 
B)  foreign aid programs from rich nations have increased in size and especially in effectiveness. 
C)  average incomes in poor nations, such as China, have risen faster than average incomes in rich nations, such as the United States. 
D)  None of the above answers are correct. 
A)  the distribution of income within most countries has become more equal. 
B)  foreign aid programs from rich nations have increased in size and especially in effectiveness. 
C)  average incomes in poor nations, such as China, have risen faster than average incomes in rich nations, such as the United States. 
D)  None of the above answers are correct.

Question 9

The income that includes a household's earnings in addition to cash transfers from the government is called

Accepted Answer

A)  market income. 
B)  real income. 
C)  money income. 
D)  cash income. 
A)  market income. 
B)  real income. 
C)  money income. 
D)  cash income.

Question 10

-The above table shows the distribution of income in two imaginary countries, Alpha and Beta.
a) In the figure above, draw the Lorenz curves for Alpha and Beta.
b) Compare the distribution of income in Alpha with that in Beta. Which distribution is more unequal?
c) What would be the distribution of income in a country with perfect income equality?

Accepted Answer

@#IMG-DLM& a) The Lorenz curves are above.
b) The

Question 11

How does the demand for high-skilled workers compare to the demand for low-skilled workers? Why does this difference exist?

Accepted Answer

The demand for high-skilled workers exce

Question 12

In the United States, globalization has caused the demand for unskilled labor to ________ and the demand for skilled labor to ________.

Accepted Answer

A)  decrease; increase 
B)  decrease; decrease 
C)  increase; increase 
D)  increase; decrease 
A)  decrease; increase 
B)  decrease; decrease 
C)  increase; increase 
D)  increase; decrease

Question 13

When China embarked on market changes towards urbanization and manufacturing in 1978, urban disposable incomes were 2.6 times greater than rural net income. By 2008 they were 3.3 times bigger. Which of the following have the market changes sketched above have most likely NOT caused?

Accepted Answer

A)  Increased income inequality between rural and urban populations 
B)  A movement towards a bell-shaped distribution of income 
C)  An increased Gini ratio 
D)  The Lorenz curve for income to move further away to the line of equality 
A)  Increased income inequality between rural and urban populations 
B)  A movement towards a bell-shaped distribution of income 
C)  An increased Gini ratio 
D)  The Lorenz curve for income to move further away to the line of equality

Question 14

An income tax for which the average tax rate is constant called a

Accepted Answer

A)  regressive income tax. 
B)  proportional income tax. 
C)  marginal income tax. 
D)  progressive income tax. 
A)  regressive income tax. 
B)  proportional income tax. 
C)  marginal income tax. 
D)  progressive income tax.

Question 15

The U.S. government provides monthly payments to retired workers under which program?

Accepted Answer

A)  the Old Age, Survivors, Disability and Health Insurance (OASDHI) 
B)  the Temporary Assistance for Needy Households (TANF) 
C)  the Supplementary Security Income (SSI) 
D)  a series of income tax rebates 
A)  the Old Age, Survivors, Disability and Health Insurance (OASDHI) 
B)  the Temporary Assistance for Needy Households (TANF) 
C)  the Supplementary Security Income (SSI) 
D)  a series of income tax rebates

Question 16

Suppose that the income tax in the United States was such that all households had to pay 20 percent of their income to the government as taxes. This tax is an example of

Accepted Answer

A)  a regressive tax. 
B)  a proportional tax. 
C)  a progressive tax. 
D)  an efficient tax. 
A)  a regressive tax. 
B)  a proportional tax. 
C)  a progressive tax. 
D)  an efficient tax.

Question 17

Customer discrimination against black investment advisers ________ the salaries of black investment advisors and ________ the number of black investment advisers.

Accepted Answer

A)  decreases; decreases 
B)  decreases; does not change 
C)  does not change; decreases 
D)  does not change; does not change 
A)  decreases; decreases 
B)  decreases; does not change 
C)  does not change; decreases 
D)  does not change; does not change

Question 18

-The "big tradeoff" refers to the tradeoff between

Accepted Answer

A)  work and leisure. 
B)  equity and efficiency. 
C)  public goods and private goods. 
D)  taxes and transfers. 
A)  work and leisure. 
B)  equity and efficiency. 
C)  public goods and private goods. 
D)  taxes and transfers.

Question 19

A progressive income tax is defined as a tax for which

Accepted Answer

A)  total taxes paid increase with the level of income. 
B)  total taxes paid are independent of the level of income. 
C)  the average tax rate increases with the level of income. 
D)  the average tax rate decreases with the level of income. 
A)  total taxes paid increase with the level of income. 
B)  total taxes paid are independent of the level of income. 
C)  the average tax rate increases with the level of income. 
D)  the average tax rate decreases with the level of income.

Question 20

The demand curve for high-skilled workers lies to the right of the demand curve for low-skilled workers because of the higher productivity of high-skilled workers.

Accepted Answer

A) True 
 B)False

Exam 19: Economic Inequality

________ is the single biggest factor affecting income distribution in the United States.

A Lorenz curve graphs the

Which of the following is NOT a government-run income maintenance program?

A proportional income tax is defined as a tax for which

Discrimination ________ the group being discriminated against and ________ the group being favored.

-The government in the country of Zappoo is trying to decide which tax plan to implement. The table above shows three alternative plans. If the government decides to implement a proportional income tax, it will implement tax plan ________.

-In the above table, which tax plan is progressive?

The world distribution of income has become more equal since 1970 because

The income that includes a household's earnings in addition to cash transfers from the government is called

How does the demand for high-skilled workers compare to the demand for low-skilled workers? Why does this difference exist?

In the United States, globalization has caused the demand for unskilled labor to ________ and the demand for skilled labor to ________.

When China embarked on market changes towards urbanization and manufacturing in 1978, urban disposable incomes were 2.6 times greater than rural net income. By 2008 they were 3.3 times bigger. Which of the following have the market changes sketched above have most likely NOT caused?

An income tax for which the average tax rate is constant called a

The U.S. government provides monthly payments to retired workers under which program?

Suppose that the income tax in the United States was such that all households had to pay 20 percent of their income to the government as taxes. This tax is an example of

Customer discrimination against black investment advisers ________ the salaries of black investment advisors and ________ the number of black investment advisers.

-The "big tradeoff" refers to the tradeoff between

A progressive income tax is defined as a tax for which

The demand curve for high-skilled workers lies to the right of the demand curve for low-skilled workers because of the higher productivity of high-skilled workers.

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

Discrimination the group being discriminated against and the group being favored.

In the United States, globalization has caused the demand for unskilled labor to and the demand for skilled labor to .

Customer discrimination against black investment advisers the salaries of black investment advisors and the number of black investment advisers.