Question 1

The tax system at both the federal and provincial levels is

Accepted Answer

A) progressive. 
B) regressive. 
C) proportional. 
D) a combination of proportional and regressive. 
E) a combination of progressive and regressive. 
A) progressive. 
B) regressive. 
C) proportional. 
D) a combination of proportional and regressive. 
E) a combination of progressive and regressive.

Question 2

Economic efficiency and economic equity have what relation?

Accepted Answer

A) Redistribution of income reduces economic equality while it increases economic efficiency. 
B) Income is equitably distributed in free market systems without intervention by government. 
C) There is a no tradeoff between the two. 
D) There is a tradeoff between equality and efficiency. 
E) More equality is generally more efficient. 
A) Redistribution of income reduces economic equality while it increases economic efficiency. 
B) Income is equitably distributed in free market systems without intervention by government. 
C) There is a no tradeoff between the two. 
D) There is a tradeoff between equality and efficiency. 
E) More equality is generally more efficient.

Question 3

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

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

Question 4

The closer the Lorenz curve is to the line of equality,

Accepted Answer

A) the more equal is the distribution. 
B) the less equal is the distribution. 
C) the more unfair is the income distribution. 
D) the richer are the highest 5 percent of households. 
E) the poorer are the highest 5 percent of households. 
A) the more equal is the distribution. 
B) the less equal is the distribution. 
C) the more unfair is the income distribution. 
D) the richer are the highest 5 percent of households. 
E) the poorer are the highest 5 percent of households.

Question 5

A regressive income tax

Accepted Answer

A) taxes income at an average rate that decreases with income. 
B) taxes lower income people a smaller percentage than higher income people. 
C) receives more from rich people, but taxes them at the same rate as poor people. 
D) taxes everyone at the same rate. 
E) taxes income at a marginal rate that increases with rises in income. 
A) taxes income at an average rate that decreases with income. 
B) taxes lower income people a smaller percentage than higher income people. 
C) receives more from rich people, but taxes them at the same rate as poor people. 
D) taxes everyone at the same rate. 
E) taxes income at a marginal rate that increases with rises in income.

Question 6

Which one of the following reduces the inequality of income or wealth relative to the market distribution?

Accepted Answer

A) government payments to the poor 
B) a regressive income tax 
C) large inheritances 
D) assortative mating 
E) all of the above 
A) government payments to the poor 
B) a regressive income tax 
C) large inheritances 
D) assortative mating 
E) all of the above

Question 7

If discrimination takes the form of consumers discriminating against a group of workers,the effect on this group of workers will be to shift their

Accepted Answer

A) value of marginal product curve rightward and increase their wage rate. 
B) value of marginal product curve leftward and decrease their wage rate. 
C) value of marginal product curve rightward and decrease their wage rate. 
D) supply of labour curve leftward and increase their wage rate. 
E) supply of labour curve rightward and decrease their wage rate. 
A) value of marginal product curve rightward and increase their wage rate. 
B) value of marginal product curve leftward and decrease their wage rate. 
C) value of marginal product curve rightward and decrease their wage rate. 
D) supply of labour curve leftward and increase their wage rate. 
E) supply of labour curve rightward and decrease their wage rate.

Question 8

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.The equilibrium wage rate for low-skilled workers is

Accepted Answer

A) $3 an hour. 
B) $7 an hour. 
C) $6 an hour. 
D) $5 an hour. 
E) $4 an hour. 
A) $3 an hour. 
B) $7 an hour. 
C) $6 an hour. 
D) $5 an hour. 
E) $4 an hour.

Question 9

Use the figure below to answer the following questions.
   
Figure 19.3.2
-Refer to Figure 19.3.2.At a wage rate of $5,an employer would hire

Accepted Answer

A) the same amount of high-skilled workers and low-skilled workers. 
B) 20 hours of low-skilled labour and 40 hours of high-skilled labour. 
C) 60 hours of low-skilled labour and 20 hours of high-skilled labour. 
D) 20 hours of low-skilled labour and 60 hours of high-skilled labour. 
E) 40 hours of low-skilled labour and 60 hours of high-skilled labour. 
A) the same amount of high-skilled workers and low-skilled workers. 
B) 20 hours of low-skilled labour and 40 hours of high-skilled labour. 
C) 60 hours of low-skilled labour and 20 hours of high-skilled labour. 
D) 20 hours of low-skilled labour and 60 hours of high-skilled labour. 
E) 40 hours of low-skilled labour and 60 hours of high-skilled labour.

Question 10

Assortative mating means that

Accepted Answer

A) poor men tend to marry rich women. 
B) people tend to marry within their own socioeconomic class. 
C) people tend to marry above their own socioeconomic class. 
D) same sex marriages occur because "like attracts like." 
E) people with different values will marry. 
A) poor men tend to marry rich women. 
B) people tend to marry within their own socioeconomic class. 
C) people tend to marry above their own socioeconomic class. 
D) same sex marriages occur because "like attracts like." 
E) people with different values will marry.

Question 11

Poverty is

Accepted Answer

A) an income below the national average income level. 
B) an income below the national median income level. 
C) a state in which a family's income is too low to be able to buy the quantities of food, shelter, and clothing that are deemed necessary. 
D) the income earned by the poorest 20 percent of households. 
E) a state in which a family spends more than 50 percent of its income on food, shelter, and clothing. 
A) an income below the national average income level. 
B) an income below the national median income level. 
C) a state in which a family's income is too low to be able to buy the quantities of food, shelter, and clothing that are deemed necessary. 
D) the income earned by the poorest 20 percent of households. 
E) a state in which a family spends more than 50 percent of its income on food, shelter, and clothing.

Question 12

The distribution of world income is ________ the distribution of Canadian income.

Accepted Answer

A) more equal than 
B) equal to 
C) not comparable to 
D) equal to the distribution of Canadian wealth and more equal than 
E) less equal than 
A) more equal than 
B) equal to 
C) not comparable to 
D) equal to the distribution of Canadian wealth and more equal than 
E) less equal than

Question 13

Use the figure below to answer the following questions.
   
Figure 19.3.2
-Refer to Figure 19.3.2.At an employment level of 40 hours per week,the difference in the value of marginal product of high-skilled workers and low-skilled workers is

Accepted Answer

A) $0. 
B) $2 an hour. 
C) $6 an hour. 
D) $4 an hour. 
E) $3 an hour. 
A) $0. 
B) $2 an hour. 
C) $6 an hour. 
D) $4 an hour. 
E) $3 an hour.

Question 14

If the average tax rate increases as income increases,the income tax is

Accepted Answer

A) progressive. 
B) proportional. 
C) negative. 
D) regressive. 
E) excessive. 
A) progressive. 
B) proportional. 
C) negative. 
D) regressive. 
E) excessive.

Question 15

Use the figure below to answer the following questions.
   
Figure 19.1.3
-In Figure 19.1.3,the middle 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 16

The demand for low-skilled labour is derived from the

Accepted Answer

A) work left undone by the high-skilled workers. 
B) marginal cost of production. 
C) lower wage rate of the labour. 
D) supply of the high-skilled labourers. 
E) value of marginal product of low-skilled labour. 
A) work left undone by the high-skilled workers. 
B) marginal cost of production. 
C) lower wage rate of the labour. 
D) supply of the high-skilled labourers. 
E) value of marginal product of low-skilled labour.

Question 17

Use the figure below to answer the following questions.
   
Figure 19.1.3
-The curve in Figure 19.1.3 is the

Accepted Answer

A) line of fairness. 
B) line of equality. 
C) learning curve. 
D) wage differential curve. 
E) Lorenz curve. 
A) line of fairness. 
B) line of equality. 
C) learning curve. 
D) wage differential curve. 
E) Lorenz curve.

Exam 19: Economic Inequality

The tax system at both the federal and provincial levels is

Economic efficiency and economic equity have what relation?

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

The closer the Lorenz curve is to the line of equality,

A regressive income tax

Which one of the following reduces the inequality of income or wealth relative to the market distribution?

If discrimination takes the form of consumers discriminating against a group of workers,the effect on this group of workers will be to shift their

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.The equilibrium wage rate for low-skilled workers is

Use the figure below to answer the following questions. Figure 19.3.2 -Refer to Figure 19.3.2.At a wage rate of $5,an employer would hire

Assortative mating means that

Poverty is

The distribution of world income is ________ the distribution of Canadian income.

Use the figure below to answer the following questions. Figure 19.3.2 -Refer to Figure 19.3.2.At an employment level of 40 hours per week,the difference in the value of marginal product of high-skilled workers and low-skilled workers is

If the average tax rate increases as income increases,the income tax is

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

The demand for low-skilled labour is derived from the

Use the figure below to answer the following questions. Figure 19.1.3 -The curve in Figure 19.1.3 is the

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

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