Question 1

Since 1970, the world Gini ratio has ________ indicating that the world distribution of income has ________.

Accepted Answer

A)  risen; become more equal 
B)  fallen; become more equal 
C)  risen; become less equal 
D)  not changed; not changed 
A)  risen; become more equal 
B)  fallen; become more equal 
C)  risen; become less equal 
D)  not changed; not changed

Question 2

-The figure above shows the demand for and supply of low-skilled labor. High-skilled workers have twice the marginal product of low-skilled workers. The cost of acquiring the skill adds $5 an hour to the wage that must be offered to attract high-skilled labor at each employment level.
a) What is the equilibrium wage rate of low-skilled labor and the equilibrium quantity of low-skilled labor employed?
b) Draw and explain the demand curve for high-skilled labor.
c) Draw and explain the supply curve of high-skilled labor.
d) What is the equilibrium wage rate of high-skilled labor and the equilibrium quantity of high-skilled labor employed?

Accepted Answer

@#IMG-DLM& a) The figure above shows the supply of

Question 3

High skilled labor and information technology are ________ while low skilled labor and information technology are ________.

Accepted Answer

A)  complements; substitutes 
B)  substitutes; substitutes 
C)  substitutes; complements 
D)  complements; complements 
A)  complements; substitutes 
B)  substitutes; substitutes 
C)  substitutes; complements 
D)  complements; complements

Question 4

The median household income is

Accepted Answer

A)  the income that separates households into two equal groups. 
B)  the most common household income. 
C)  the mean household income. 
D)  the average household income. 
A)  the income that separates households into two equal groups. 
B)  the most common household income. 
C)  the mean household income. 
D)  the average household income.

Question 5

-In the figure above, the quantity of low-skilled labor employed is

Accepted Answer

A)  2,000 hours per day. 
B)  4,000 hours per day. 
C)  5,000 hours per day. 
D)  7,000 hours per day. 
A)  2,000 hours per day. 
B)  4,000 hours per day. 
C)  5,000 hours per day. 
D)  7,000 hours per day.

Question 6

What factors explain why high-skilled workers are paid more than low-skilled workers?

Accepted Answer

High-skilled workers have a higher value

Question 7

The income distribution in the United States is

Accepted Answer

A)  positively skewed. 
B)  negatively skewed. 
C)  bell-shaped 
D)  uniform. 
A)  positively skewed. 
B)  negatively skewed. 
C)  bell-shaped 
D)  uniform.

Question 8

-The above figure shows the Lorenz curves for four different countries. In which country is income most equally distributed?

Accepted Answer

A)  country A 
B)  country B 
C)  country C 
D)  country D 
A)  country A 
B)  country B 
C)  country C 
D)  country D

Question 9

-In the above figure, if the Lorenz curve were to move closer to the diagonal line containing points b and c, the income distribution would be

Accepted Answer

A)  more unequal. 
B)  more equal. 
C)  unchanged. 
D)  More information is needed to determine how this change would affect the income distribution. 
A)  more unequal. 
B)  more equal. 
C)  unchanged. 
D)  More information is needed to determine how this change would affect the income distribution.

Question 10

The Gini ratio in Brazil was over 0.6 in 1990 and fell to 0.5 in 2010. This change means that over this time inequality ________ and the Lorenz curve moved ________ the 45 degree line.

Accepted Answer

A)  increased; closer to 
B)  increased; further away from 
C)  decreased; closer to 
D)  decreased; further away from 
A)  increased; closer to 
B)  increased; further away from 
C)  decreased; closer to 
D)  decreased; further away from

Question 11

-In the figure above, the difference in wage rate between low-skilled and high-skilled labor is

Accepted Answer

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

Question 12

The table shows the distributions of market income and money income in the United States in 2007.  
-According to the table above, income is redistributed from the ________ of households to the ________ of households.

Accepted Answer

A)  richest 20%; rest 
B)  richest 20%; poorest 20% 
C)  richest 40%; rest 
D)  poorest 40%; richest 20% 
A)  richest 20%; rest 
B)  richest 20%; poorest 20% 
C)  richest 40%; rest 
D)  poorest 40%; richest 20%

Question 13

-In the figure above, the Lorenz curve that shows the richest 20 percent of households receiving 40 percent of all income is

Accepted Answer

A)  curve A. 
B)  curve B. 
C)  curve C. 
D)  curve D. 
A)  curve A. 
B)  curve B. 
C)  curve C. 
D)  curve D.

Question 14

In recent years, average household income in the United States was highest for households headed by someone aged

Accepted Answer

A)  35 to 44. 
B)  45 to 54. 
C)  55 to 64. 
D)  65 and over. 
A)  35 to 44. 
B)  45 to 54. 
C)  55 to 64. 
D)  65 and over.

Question 15

The table shows the distributions of market income and money income in the United States in 2007.  
-According to the table above, ________ percent of total income is redistributed from the highest income group.

Accepted Answer

A)  4.7 
B)  2.3 
C)  1.5 
D)  3.8 
A)  4.7 
B)  2.3 
C)  1.5 
D)  3.8

Question 16

-In the figure above, the quantity of high-skilled labor employed is

Accepted Answer

A)  2,000 hours per day. 
B)  4,000 hours per day. 
C)  5,000 hours per day. 
D)  7,000 hours per day. 
A)  2,000 hours per day. 
B)  4,000 hours per day. 
C)  5,000 hours per day. 
D)  7,000 hours per day.

Question 17

A Lorenz curve graphs the difference between money income and market income.

Accepted Answer

A) True 
 B)False

Question 18

-In the figure above, the richest 40 percent of households receive ________ of total income.

Accepted Answer

A)  70 percent 
B)  30 percent 
C)  60 percent 
D)  80 percent 
A)  70 percent 
B)  30 percent 
C)  60 percent 
D)  80 percent

Question 19

Suppose there are two types of labor, high skilled and low skilled. The demand curve for high skilled labor lies ________ the demand curve for low skilled labor and the supply curve of high skilled labor lies ________ the supply curve of low skilled labor.

Accepted Answer

A)  above; above 
B)  above; below 
C)  below; below 
D)  below; above 
A)  above; above 
B)  above; below 
C)  below; below 
D)  below; above

Question 20

Market income is

Accepted Answer

A)  wage, interest, rent, and profit earned in factor markets. 
B)  wage income. 
C)  wage and salary income. 
D)  money income. 
A)  wage, interest, rent, and profit earned in factor markets. 
B)  wage income. 
C)  wage and salary income. 
D)  money income.

Exam 19: Economic Inequality

Since 1970, the world Gini ratio has ________ indicating that the world distribution of income has ________.

High skilled labor and information technology are ________ while low skilled labor and information technology are ________.

The median household income is

-In the figure above, the quantity of low-skilled labor employed is

What factors explain why high-skilled workers are paid more than low-skilled workers?

The income distribution in the United States is

-The above figure shows the Lorenz curves for four different countries. In which country is income most equally distributed?

-In the above figure, if the Lorenz curve were to move closer to the diagonal line containing points b and c, the income distribution would be

The Gini ratio in Brazil was over 0.6 in 1990 and fell to 0.5 in 2010. This change means that over this time inequality ________ and the Lorenz curve moved ________ the 45 degree line.

-In the figure above, the difference in wage rate between low-skilled and high-skilled labor is

The table shows the distributions of market income and money income in the United States in 2007. -According to the table above, income is redistributed from the ________ of households to the ________ of households.

-In the figure above, the Lorenz curve that shows the richest 20 percent of households receiving 40 percent of all income is

In recent years, average household income in the United States was highest for households headed by someone aged

The table shows the distributions of market income and money income in the United States in 2007. -According to the table above, ________ percent of total income is redistributed from the highest income group.

-In the figure above, the quantity of high-skilled labor employed is

A Lorenz curve graphs the difference between money income and market income.

-In the figure above, the richest 40 percent of households receive ________ of total income.

Suppose there are two types of labor, high skilled and low skilled. The demand curve for high skilled labor lies ________ the demand curve for low skilled labor and the supply curve of high skilled labor lies ________ the supply curve of low skilled labor.

Market income 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

Since 1970, the world Gini ratio has indicating that the world distribution of income has .

High skilled labor and information technology are while low skilled labor and information technology are .

The Gini ratio in Brazil was over 0.6 in 1990 and fell to 0.5 in 2010. This change means that over this time inequality and the Lorenz curve moved the 45 degree line.

The table shows the distributions of market income and money income in the United States in 2007. -According to the table above, income is redistributed from the of households to the of households.

Suppose there are two types of labor, high skilled and low skilled. The demand curve for high skilled labor lies the demand curve for low skilled labor and the supply curve of high skilled labor lies the supply curve of low skilled labor.