Exam 19: Economic Inequality

On the Lorenz curve graph, the area between the line of equality and the Lorenz curve is 2,500, and the entire area beneath the line of equality is 5,000. What does the Gini ratio equal?

The more that Clayton earns, the higher is his average tax rate. Clayton faces a ________ income tax.

-The table shows the distribution of human and non-human capital for two people, Sam and Janet. a) Looking just at tangible assets (non-human capital), by how many times does Janet's wealth exceed Sam's? b) Assume that both human and non-human capital earn a 10 percent annual interest rate. Calculate Sam's and Janet's total income. c) By how many times does Janet's total income exceed Sam's? d) Which comparison results in a more equal distribution? e) Which comparison gives a better indication of each person's economic condition?

"The Big Tradeoff" refers to the effect of redistribution on efficiency.

-In the figure above, the middle fifth of all households receive what share of all income?

-In the figure above, the line of equality is

-In the figure above, 10 percent of income in country C is distributed to the

Economists who have compared the incomes of never-married men and women have found that with equal amounts of human capital, ________.

Consider the country of Outland. In Outland, people pay 10 percent of their income as a tax whether they earn $10,000 or $100,000 annually. Outland has ________ tax structure.

One possible reason the U.S. income distribution has become more unequal is

The inefficiency created by income taxation occurs due to

Social security provides payments

Last year you earned $45,000 and paid $9,000 in income taxes. This year you earned $60,000 and paid $15,000 in income taxes. What kind of income tax do you face?

-In the figure above, the richest 20 percent of all households receive what share of all income?

Measured wealth is a less accurate indicator of economic inequality than is measured income because measured wealth excludes

Income is distributed very unequally in ________ and very equally in ________.

Because of assortative mating, wealth becomes ________ and the distribution of wealth becomes more ________.

-In the above figure, point ________ shows an equal distribution of income, while point ________ shows an unequal distribution of income.

With respect to income redistribution programs, what is meant by "The Big Tradeoff," and what causes it?

What is the difference between wealth and income?