Question 1

A firm that discriminates has ________ a firm that does not discriminate and ________.

Accepted Answer

A) the same costs as;competes most often with firms from other countries 
B) the same costs as;can successfully maximize profit in a competitive industry 
C) lower costs than;drives other firms out of a competitive industry 
D) higher costs than;competes most often with firms from other countries 
E) higher costs than;cannot survive in a competitive industry 
A) the same costs as;competes most often with firms from other countries 
B) the same costs as;can successfully maximize profit in a competitive industry 
C) lower costs than;drives other firms out of a competitive industry 
D) higher costs than;competes most often with firms from other countries 
E) higher costs than;cannot survive in a competitive industry

Question 2

A Lorenz curve illustrates the distribution of income by graphing the

Accepted Answer

A) cumulative percentage of income received and the cumulative percentage of households. 
B) chance of a family earning a specific income. 
C) wealth earned by a cumulative percentage of households. 
D) cumulative frequency of specific incomes. 
E) percentage change in income for a percentage change in population. 
A) cumulative percentage of income received and the cumulative percentage of households. 
B) chance of a family earning a specific income. 
C) wealth earned by a cumulative percentage of households. 
D) cumulative frequency of specific incomes. 
E) percentage change in income for a percentage change in population.

Question 3

A proportional income tax

Accepted Answer

A) taxes lower income people a larger percentage than higher income people. 
B) taxes lower income people a smaller percentage than higher income people. 
C) receives less tax from higher income people, but taxes them at the same rate as lower income people. 
D) taxes everyone at the same rate. 
E) taxes everyone the same amount. 
A) taxes lower income people a larger percentage than higher income people. 
B) taxes lower income people a smaller percentage than higher income people. 
C) receives less tax from higher income people, but taxes them at the same rate as lower income people. 
D) taxes everyone at the same rate. 
E) taxes everyone the same amount.

Question 4

If the supply of labour curve is upward sloping but not vertical,and if the value of marginal product of labour increases,

Accepted Answer

A) the supply of labour increases. 
B) the wage rate rises. 
C) the marginal cost of production increases. 
D) the exploitation of workers decreases. 
E) employment is unchanged. 
A) the supply of labour increases. 
B) the wage rate rises. 
C) the marginal cost of production increases. 
D) the exploitation of workers decreases. 
E) employment is unchanged.

Question 5

Measured wealth distributions that do not consider the distribution of human capital

Accepted Answer

A) overstate the equality of the income distribution. 
B) understate the inequality of the income distribution. 
C) are correct since human capital is difficult to accurately measure. 
D) overstate the inequality of the wealth distribution. 
E) are correct because the distribution of human capital is about the same as the distribution of non-human wealth. 
A) overstate the equality of the income distribution. 
B) understate the inequality of the income distribution. 
C) are correct since human capital is difficult to accurately measure. 
D) overstate the inequality of the wealth distribution. 
E) are correct because the distribution of human capital is about the same as the distribution of non-human wealth.

Question 6

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

Accepted Answer

A) average incomes in poorer countries are rising much faster than average incomes in rich countries. 
B) the distribution of income within most countries has become more equal. 
C) foreign aid programs from rich nations have increased in size and especially in effectiveness. 
D) technology is used similarly in all countries. 
E) all of the above 
A) average incomes in poorer countries are rising much faster than average incomes in rich countries. 
B) the distribution of income within most countries has become more equal. 
C) foreign aid programs from rich nations have increased in size and especially in effectiveness. 
D) technology is used similarly in all countries. 
E) all of the above

Question 7

Use the figure below to answer the following questions.
   
Figure 19.3.2
-Refer to Figure 19.3.2.At an employment level of 20 hours per week,firms are willing to pay

Accepted Answer

A) a wage rate of $7 an hour to low-skilled workers. 
B) a maximum of $5 an hour to high-skilled workers. 
C) up to $7 an hour for high-skilled workers. 
D) the same for high-skilled workers as for low-skilled workers. 
E) $3 an hour more for high-skilled workers. 
A) a wage rate of $7 an hour to low-skilled workers. 
B) a maximum of $5 an hour to high-skilled workers. 
C) up to $7 an hour for high-skilled workers. 
D) the same for high-skilled workers as for low-skilled workers. 
E) $3 an hour more for high-skilled workers.

Question 8

Customer discrimination against female realtors ________ the number of female realtors and ________ their perceived value of marginal product.

Accepted Answer

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

Question 9

In 2009,the mode income received by 7.0 percent of households in Canada was between

Accepted Answer

A) $18,500 and $21,999. 
B) $15,000 and $19,999. 
C) $30,000 and $34,999. 
D) $16,000 and $22,500. 
E) $18,000 and $24,999. 
A) $18,500 and $21,999. 
B) $15,000 and $19,999. 
C) $30,000 and $34,999. 
D) $16,000 and $22,500. 
E) $18,000 and $24,999.

Question 10

Use the figure below to answer the following questions.
   
Figure 19.3.6
-Refer to Figure 19.3.6.If this is the market for a group of workers who are discriminated against by customers and point A represents the equilibrium without discrimination,which point represents the equilibrium for the workers who are discriminated against?

Accepted Answer

A) D 
B) B 
C) I 
D) C 
E) H 
A) D 
B) B 
C) I 
D) C 
E) H

Question 11

Use the figure below to answer the following questions.
   
Figure 19.3.5
-Refer to Figure 19.3.5.This figure shows the labour supply curves and the value of marginal product curves for high-skilled and low-skilled workers.If the labour markets are competitive,then for a 40-hour work week,high-skilled workers must be paid

Accepted Answer

A) an extra $3 to compensate for the cost of acquiring their human capital and for their increased productivity. 
B) an extra $20 to compensate for the cost of acquiring their human capital and for their increased productivity. 
C) an extra $120 to compensate for the cost of acquiring their human capital and for their increased productivity. 
D) an extra $300 to compensate for the cost of acquiring their human capital and for their enhanced productivity. 
E) an extra $180 to compensate for the cost of acquiring their human capital and for their increased productivity. 
A) an extra $3 to compensate for the cost of acquiring their human capital and for their increased productivity. 
B) an extra $20 to compensate for the cost of acquiring their human capital and for their increased productivity. 
C) an extra $120 to compensate for the cost of acquiring their human capital and for their increased productivity. 
D) an extra $300 to compensate for the cost of acquiring their human capital and for their enhanced productivity. 
E) an extra $180 to compensate for the cost of acquiring their human capital and for their increased productivity.

Question 12

Income maintenance programs include all of the following programs except

Accepted Answer

A) social security programs. 
B) workers' compensation. 
C) Canada Pension Plan. 
D) employment insurance. 
E) the minimum wage. 
A) social security programs. 
B) workers' compensation. 
C) Canada Pension Plan. 
D) employment insurance. 
E) the minimum wage.

Question 13

Use the figure below to answer the following questions.
   
Figure 19.1.3
-In Figure 19.1.3,the poorest 20 percent of all families receive what share of income?

Accepted Answer

A) 10 percent 
B) 20 percent 
C) 30 percent 
D) 40 percent 
E) none of the above 
A) 10 percent 
B) 20 percent 
C) 30 percent 
D) 40 percent 
E) none of the above

Question 14

The larger the gap between the Lorenz curve and the line of equality,

Accepted Answer

A) the greater is the equality in the income distribution. 
B) the less is the inequality in the income distribution. 
C) the poorer are the top 50 percent of households. 
D) the richer are the lowest 50 percent of households. 
E) the greater is the inequality in the income distribution. 
A) the greater is the equality in the income distribution. 
B) the less is the inequality in the income distribution. 
C) the poorer are the top 50 percent of households. 
D) the richer are the lowest 50 percent of households. 
E) the greater is the inequality in the income distribution.

Question 15

Use the figure below to answer the following questions.
   
Figure 19.3.1
-The vertical distance between the two supply curves in Figure 19.3.1

Accepted Answer

A) is the compensation for the cost of acquiring human capital. 
B) is the VMP of skill. 
C) is the result of discrimination against low-skilled workers. 
D) is the result of subsidies for high-skilled workers. 
E) will disappear if there is free entry in the high-skilled market. 
A) is the compensation for the cost of acquiring human capital. 
B) is the VMP of skill. 
C) is the result of discrimination against low-skilled workers. 
D) is the result of subsidies for high-skilled workers. 
E) will disappear if there is free entry in the high-skilled market.

Question 16

Which one of the following is not a reason why the wages of high-skilled workers exceed the wages of low-skilled workers?

Accepted Answer

A) The market for high-skilled workers is more competitive than the market for low-skilled labour. 
B) The value of marginal product of high-skilled workers is greater than that of low-skilled workers. 
C) The cost of obtaining the human capital required for high-skilled workers is greater than the cost of obtaining the human capital required for low-skilled workers. 
D) High-skilled workers have acquired more human capital than low-skilled workers. 
E) The demand curve for high-skilled workers lies to the right of the demand curve for low-skilled workers. 
A) The market for high-skilled workers is more competitive than the market for low-skilled labour. 
B) The value of marginal product of high-skilled workers is greater than that of low-skilled workers. 
C) The cost of obtaining the human capital required for high-skilled workers is greater than the cost of obtaining the human capital required for low-skilled workers. 
D) High-skilled workers have acquired more human capital than low-skilled workers. 
E) The demand curve for high-skilled workers lies to the right of the demand curve for low-skilled workers.

Question 17

Use the figure below to answer the following questions.
   
Figure 19.1.2
-Consider the Lorenz curves in Figure 19.1.2.Which Lorenz curve corresponds to the greatest income inequality?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
E) impossible to tell without additional information 
A) A 
B) B 
C) C 
D) D 
E) impossible to tell without additional information

Question 18

The inequality in the distribution of wealth is

Accepted Answer

A) less than the inequality in the distribution of income. 
B) decreased by the existence of assortative mating. 
C) a better measure of the inequality in the distribution of economic resources than is the inequality in the distribution of income. 
D) shown by a Lorenz curve that is farther away from the line of equality than the Lorenz curve for income. 
E) all of the above. 
A) less than the inequality in the distribution of income. 
B) decreased by the existence of assortative mating. 
C) a better measure of the inequality in the distribution of economic resources than is the inequality in the distribution of income. 
D) shown by a Lorenz curve that is farther away from the line of equality than the Lorenz curve for income. 
E) all of the above.

Question 19

Which of the following does Statistics Canada use to provide measures of economic inequality?

Accepted Answer

A) market income only 
B) market income and after-tax income only 
C) after-tax income only 
D) total market and after-tax income only 
E) market income, total income, and after-tax income 
A) market income only 
B) market income and after-tax income only 
C) after-tax income only 
D) total market and after-tax income only 
E) market income, total income, and after-tax income

Question 20

Use the table below to answer the following questions.
Table 19.4.1
  
-In Table 19.4.1,which tax plan is progressive?

Accepted Answer

A) Plan A 
B) Plan B 
C) Plan C 
D) Plan D 
E) impossible to calculate without additional information 
A) Plan A 
B) Plan B 
C) Plan C 
D) Plan D 
E) impossible to calculate without additional information

Exam 19: Economic Inequality

A firm that discriminates has ________ a firm that does not discriminate and ________.

A Lorenz curve illustrates the distribution of income by graphing the

A proportional income tax

If the supply of labour curve is upward sloping but not vertical,and if the value of marginal product of labour increases,

Measured wealth distributions that do not consider the distribution of human capital

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

Use the figure below to answer the following questions. Figure 19.3.2 -Refer to Figure 19.3.2.At an employment level of 20 hours per week,firms are willing to pay

Customer discrimination against female realtors ________ the number of female realtors and ________ their perceived value of marginal product.

In 2009,the mode income received by 7.0 percent of households in Canada was between

Income maintenance programs include all of the following programs except

Use the figure below to answer the following questions. Figure 19.1.3 -In Figure 19.1.3,the poorest 20 percent of all families receive what share of income?

The larger the gap between the Lorenz curve and the line of equality,

Use the figure below to answer the following questions. Figure 19.3.1 -The vertical distance between the two supply curves in Figure 19.3.1

Which one of the following is not a reason why the wages of high-skilled workers exceed the wages of low-skilled workers?

Use the figure below to answer the following questions. Figure 19.1.2 -Consider the Lorenz curves in Figure 19.1.2.Which Lorenz curve corresponds to the greatest income inequality?

The inequality in the distribution of wealth is

Which of the following does Statistics Canada use to provide measures of economic inequality?

Use the table below to answer the following questions. Table 19.4.1 -In Table 19.4.1,which tax plan is progressive?

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

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: The Keynesian Model

Canadian Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

A firm that discriminates has a firm that does not discriminate and .

Customer discrimination against female realtors the number of female realtors and their perceived value of marginal product.