Exam 19: Economic Inequality

-The first table above gives the average income received by each 20 percent group of households. Complete the second table. Label the axes above and then plot the Lorenz curve.

Wealth inequality persists across generations due, in part, to assortative mating.

The Lorenz curve

Moe's Sweaters is a firm in perfect competition. Moe's customers don't know who the firm's workers are. If Moe is the only employer in the market who discriminates against women by paying them less than he pays to equally qualified men, his firm will

If a tax was instituted such that every dollar collected in taxes from high income households resulted in a distribution of $.80 to low income households,

If a Lorenz curve moves leftward and becomes closer to the line of equality over time, then

In the United States, measured wealth is distributed more unequally than income.

The distribution of income in the United States is skewed so that the mode level of household income is ________ the median household income and the median household income is ________ than the mean household income.

In a Lorenz diagram for income, the line of equality shows

The entry of China and other developing countries into the global economy ________ the value of marginal product of factory workers in the United States and ________ their wage rate.

-In the figure above, the second poorest 20 percent of households receive ________ of total income.

The Lorenz curve graphs the

-In the figure above, if the government starts to provide university education at no charge, in the long run, the wage rate of high-skilled workers will ________ and the wage rate of low-skilled workers will ________.

The federal income tax in the United States is

The demand curve for low-skilled labor lies to the left of the demand curve for high-skilled labor because

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

-In the figure above, the second richest 20 percent of households receive ________ of total income.

-Alice, Bob, and Cody live in Wesland. Their annual incomes and the amounts they pay in income tax are shown in the table below. The income tax in Wesland is

A proportional income tax is a tax for which the total amount paid does not increase with income.

Taxes and transfers in the United States