Question 1

-The figure shows two Lorenz curves. Suppose both Lorenz curves measure income. Lorenz curve A shows ________ Lorenz curve B.

Accepted Answer

A)  income is more equally distributed than the income shown in 
B)  income is less equally distributed than the income shown in 
C)  the first quintile earns less income than the first quintile earned in 
D)  the fifth quintile earns more income than the fifth quintile earned in 
A)  income is more equally distributed than the income shown in 
B)  income is less equally distributed than the income shown in 
C)  the first quintile earns less income than the first quintile earned in 
D)  the fifth quintile earns more income than the fifth quintile earned in

Question 2

-In the figure above, if information technologies are introduced that are complements for high-skilled workers and substitutes for low-skilled workers, the wage rate of high-skilled workers will ________ and the wage rate of low-skilled workers will ________.

Accepted Answer

A)  rise; fall 
B)  fall; rise 
C)  fall; fall 
D)  rise; rise 
A)  rise; fall 
B)  fall; rise 
C)  fall; fall 
D)  rise; rise

Question 3

The higher the cost of acquiring skills, the ________ are the high-skilled and low-skilled labor ________ curves.

Accepted Answer

A)  closer together; demand 
B)  farther apart; demand 
C)  closer together; supply 
D)  farther apart; supply 
A)  closer together; demand 
B)  farther apart; demand 
C)  closer together; supply 
D)  farther apart; supply

Question 4

-In the figure above, if income were distributed equally across all households, the poorest 10 percent of households would receive ________ of total income.

Accepted Answer

A)  5 percent 
B)  10 percent 
C)  15 percent 
D)  20 percent 
A)  5 percent 
B)  10 percent 
C)  15 percent 
D)  20 percent

Question 5

What are the three ways that the government redistributes income in the United States? Briefly discuss each.

Accepted Answer

The government redistributes income usin

Question 6

-In the above table, which plan is a flat-rate tax?

Accepted Answer

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

Question 7

If one person has all the income and everyone else has none, the Gini ratio is 1.

Accepted Answer

A) True 
 B)False

Question 8

-The above figure shows the Lorenz curve for wealth for the nation of Rusha. The wealthiest forty percent of the population own what percent of wealth?

Accepted Answer

A)  40 percent 
B)  50 percent 
C)  60 percent 
D)  100 percent 
A)  40 percent 
B)  50 percent 
C)  60 percent 
D)  100 percent

Question 9

-In the above figure, the long-run effect of providing university education at no charge to all qualified applicants would be to shift the curve SH

Accepted Answer

A)  and the curve SL leftward. 
B)  and the curve SL rightward. 
C)  leftward and the curve SL rightward. 
D)  rightward and the curve SL leftward. 
A)  and the curve SL leftward. 
B)  and the curve SL rightward. 
C)  leftward and the curve SL rightward. 
D)  rightward and the curve SL leftward.

Question 10

If both rich and poor families pay 25 percent of their income in taxes, the tax scheme is ________.

Accepted Answer

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

Question 11

Market income in the United States is distributed

Accepted Answer

A)  more unequally than income after taxes and benefits. 
B)  less unequally than income after taxes and benefits. 
C)  the same as income after taxes and benefits. 
D)  according to a big tradeoff between equity and equality 
A)  more unequally than income after taxes and benefits. 
B)  less unequally than income after taxes and benefits. 
C)  the same as income after taxes and benefits. 
D)  according to a big tradeoff between equity and equality

Question 12

Of age, marital status, family size, education, and race, which is the single biggest factor affecting the household income distribution?

Accepted Answer

The single most important fact

Question 13

The mean household income is

Accepted Answer

A)  the income that separates households into two equal groups. 
B)  the most common household income. 
C)  the percentage of total income received by the richest 20 percent of households. 
D)  the average household income. 
A)  the income that separates households into two equal groups. 
B)  the most common household income. 
C)  the percentage of total income received by the richest 20 percent of households. 
D)  the average household income.

Question 14

-The above figure shows the Lorenz curves for four different countries. Which of the following statements is FALSE?

Accepted Answer

A)  Country A has an income distribution that is not perfectly equal. 
B)  Country D's income distribution is the most unequal of the four countries. 
C)  The distribution of income is more unequal in country A than in country B. 
D)  The distribution of income is more unequal in country D than in country C. 
A)  Country A has an income distribution that is not perfectly equal. 
B)  Country D's income distribution is the most unequal of the four countries. 
C)  The distribution of income is more unequal in country A than in country B. 
D)  The distribution of income is more unequal in country D than in country C.

Question 15

At any wage rate, the quantity of welders willing to work is less than the quantity of tomato pickers. Why?

Accepted Answer

For the welder the cost of acquiring his

Question 16

Mode income is

Accepted Answer

A)  the most common income. 
B)  the average income. 
C)  the middle income level. 
D)  the same as money income. 
A)  the most common income. 
B)  the average income. 
C)  the middle income level. 
D)  the same as money income.

Question 17

Relative to the demand curve for low-skilled workers, the demand curve for high-skilled workers lies

Accepted Answer

A)  to the right. 
B)  to the left. 
C)  below. 
D)  in the same place. 
A)  to the right. 
B)  to the left. 
C)  below. 
D)  in the same place.

Question 18

-The above figure shows two Lorenz curves. Suppose both Lorenz curves measure wealth. Then, the curves show that wealth is

Accepted Answer

A)  greater along Lorenz curve A. 
B)  greater along Lorenz curve B. 
C)  distributed more equally along Lorenz curve A. 
D)  distributed more equally along Lorenz curve B. 
A)  greater along Lorenz curve A. 
B)  greater along Lorenz curve B. 
C)  distributed more equally along Lorenz curve A. 
D)  distributed more equally along Lorenz curve B.

Question 19

All of the following are programs that redistribute income by making direct payments to people in the lower part of the income distribution EXCEPT

Accepted Answer

A)  social security programs. 
B)  welfare programs. 
C)  Individual Retirement Accounts. 
D)  unemployment compensation. 
A)  social security programs. 
B)  welfare programs. 
C)  Individual Retirement Accounts. 
D)  unemployment compensation.

Question 20

Albert, Betty, and Cecile live in Norland. Their annual incomes and the amounts they pay in income tax are shown in the table below.   The income tax in Norland is

Accepted Answer

A)  proportional. 
B)  fair. 
C)  regressive. 
D)  progressive. 
A)  proportional. 
B)  fair. 
C)  regressive. 
D)  progressive.

Exam 19: Economic Inequality

-The figure shows two Lorenz curves. Suppose both Lorenz curves measure income. Lorenz curve A shows ________ Lorenz curve B.

-In the figure above, if information technologies are introduced that are complements for high-skilled workers and substitutes for low-skilled workers, the wage rate of high-skilled workers will ________ and the wage rate of low-skilled workers will ________.

The higher the cost of acquiring skills, the ________ are the high-skilled and low-skilled labor ________ curves.

-In the figure above, if income were distributed equally across all households, the poorest 10 percent of households would receive ________ of total income.

What are the three ways that the government redistributes income in the United States? Briefly discuss each.

-In the above table, which plan is a flat-rate tax?

If one person has all the income and everyone else has none, the Gini ratio is 1.

-The above figure shows the Lorenz curve for wealth for the nation of Rusha. The wealthiest forty percent of the population own what percent of wealth?

-In the above figure, the long-run effect of providing university education at no charge to all qualified applicants would be to shift the curve SH

If both rich and poor families pay 25 percent of their income in taxes, the tax scheme is ________.

Market income in the United States is distributed

Of age, marital status, family size, education, and race, which is the single biggest factor affecting the household income distribution?

The mean household income is

-The above figure shows the Lorenz curves for four different countries. Which of the following statements is FALSE?

At any wage rate, the quantity of welders willing to work is less than the quantity of tomato pickers. Why?

Mode income is

Relative to the demand curve for low-skilled workers, the demand curve for high-skilled workers lies

-The above figure shows two Lorenz curves. Suppose both Lorenz curves measure wealth. Then, the curves show that wealth is

All of the following are programs that redistribute income by making direct payments to people in the lower part of the income distribution EXCEPT

Albert, Betty, and Cecile live in Norland. Their annual incomes and the amounts they pay in income tax are shown in the table below. The income tax in Norland 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

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, if information technologies are introduced that are complements for high-skilled workers and substitutes for low-skilled workers, the wage rate of high-skilled workers will and the wage rate of low-skilled workers will .

The higher the cost of acquiring skills, the are the high-skilled and low-skilled labor curves.

-In the above figure, the long-run effect of providing university education at no charge to all qualified applicants would be to shift the curve S_H