Question 1

When the Lorenz curve moves closer to the diagonal, this shows:

Accepted Answer

A)  the rich getting richer and the poor getting poorer. 
B)  total income is rising. 
C)  the distribution of income is becoming more even. 
D)  the population is decreasing. 
E)  the prices of goods are rising. 
A)  the rich getting richer and the poor getting poorer. 
B)  total income is rising. 
C)  the distribution of income is becoming more even. 
D)  the population is decreasing. 
E)  the prices of goods are rising.

Question 2

Which of the following is not included in census income?

Accepted Answer

A)  wages and salaries. 
B)  property income. 
C)  cash welfare benefits. 
D)  in-kind transfers. 
A)  wages and salaries. 
B)  property income. 
C)  cash welfare benefits. 
D)  in-kind transfers.

Question 3

A negative income tax program provides a simple way to assist the unemployed.

Accepted Answer

A) True 
 B)False

Question 4

Critics of an equal distribution of income argue that the effect would be to raise the incentive to be productive.

Accepted Answer

A) True 
 B)False

Question 5

Economists look at which of the following to get a quick visual expression of income distribution?

Accepted Answer

A)  Gini coefficient. 
B)  IRS records of how much income each household earned. 
C)  supply and demand curves for resources. 
D)  Lorenz curve. 
E)  surveys of business estimates for MRPs. 
A)  Gini coefficient. 
B)  IRS records of how much income each household earned. 
C)  supply and demand curves for resources. 
D)  Lorenz curve. 
E)  surveys of business estimates for MRPs.

Question 6

Exhibit 12-2 Lorenz curve  
-As shown in Exhibit 12-2, the distance between points B and D means that 60 percent of families earn ____ less of total income than required for perfect equality.

Accepted Answer

A)  30 percent 
B)  60 percent 
C)  90 percent 
D)  insufficient information to answer question. 
A)  30 percent 
B)  60 percent 
C)  90 percent 
D)  insufficient information to answer question.

Question 7

The Lorenz curve is best used to measure the distribution of income.

Accepted Answer

A) True 
 B)False

Question 8

Since the 1970s, the percentage of total income earned by the poorest 20 percent of American families has fallen.

Accepted Answer

A) True 
 B)False

Question 9

Exhibit 12-8 Negative income tax for a family  
-Under the negative income tax shown in Exhibit 12-8, what cash payment would a family with no earned income receive from the government?

Accepted Answer

A)  $0. 
B)  $10,000. 
C)  $15,000. 
D)  $30,000. 
A)  $0. 
B)  $10,000. 
C)  $15,000. 
D)  $30,000.

Question 10

The Lorenz curve measures the:

Accepted Answer

A)  distribution of income. 
B)  effectiveness of government transfer payments. 
C)  extent to which family incomes are affected by welfare. 
D)  all of these. 
A)  distribution of income. 
B)  effectiveness of government transfer payments. 
C)  extent to which family incomes are affected by welfare. 
D)  all of these.

Question 11

A graph that shows the percentage of the families on one axis and the percentage of income on the other is called the:

Accepted Answer

A)  Budget-distribution curve. 
B)  Income-consumption curve. 
C)  Lorenz curve. 
D)  Marx curve. 
A)  Budget-distribution curve. 
B)  Income-consumption curve. 
C)  Lorenz curve. 
D)  Marx curve.

Question 12

For the calculation of a Lorenz curve using quintiles, the:

Accepted Answer

A)  first quintile contains the richest 50 percent of population. 
B)  first quintile contains the richest 20 percent of population. 
C)  first quintile contains the poorest 50 percent of population. 
D)  first quintile contains the poorest 20 percent of population. 
E)  last quintile contains the poorest 10 percent of population. 
A)  first quintile contains the richest 50 percent of population. 
B)  first quintile contains the richest 20 percent of population. 
C)  first quintile contains the poorest 50 percent of population. 
D)  first quintile contains the poorest 20 percent of population. 
E)  last quintile contains the poorest 10 percent of population.

Question 13

Which of the following is an in-kind transfer payment?

Accepted Answer

A)  Medicaid. 
B)  Social Security. 
C)  unemployment insurance. 
D)  Temporary Assistance to Needy Families. 
A)  Medicaid. 
B)  Social Security. 
C)  unemployment insurance. 
D)  Temporary Assistance to Needy Families.

Question 14

Economists can illustrate an uneven distribution of income by sketching a Lorenz curve that lies above the diagonal.

Accepted Answer

A) True 
 B)False

Question 15

The Lorenz curve is best used to measure international competitiveness.

Accepted Answer

A) True 
 B)False

Question 16

Contrary to popular belief, the richest families in the United States became slightly poorer in recent years.

Accepted Answer

A) True 
 B)False

Question 17

The distribution of income in developed countries is less egalitarian than less developed countries.

Accepted Answer

A) True 
 B)False

Question 18

An example of in-kind assistance to the poor is TANF.

Accepted Answer

A) True 
 B)False

Question 19

If a negative income tax system were implemented, then the poor would have no incentive to find work.

Accepted Answer

A) True 
 B)False

Question 20

In the United States, families headed by single women have higher poverty rates than families headed by single men or by married couples.

Accepted Answer

A) True 
 B)False

When the Lorenz curve moves closer to the diagonal, this shows:

Which of the following is not included in census income?

A negative income tax program provides a simple way to assist the unemployed.

Critics of an equal distribution of income argue that the effect would be to raise the incentive to be productive.

Economists look at which of the following to get a quick visual expression of income distribution?

Exhibit 12-2 Lorenz curve -As shown in Exhibit 12-2, the distance between points B and D means that 60 percent of families earn ____ less of total income than required for perfect equality.

The Lorenz curve is best used to measure the distribution of income.

Since the 1970s, the percentage of total income earned by the poorest 20 percent of American families has fallen.

Exhibit 12-8 Negative income tax for a family -Under the negative income tax shown in Exhibit 12-8, what cash payment would a family with no earned income receive from the government?

The Lorenz curve measures the:

A graph that shows the percentage of the families on one axis and the percentage of income on the other is called the:

For the calculation of a Lorenz curve using quintiles, the:

Which of the following is an in-kind transfer payment?

Economists can illustrate an uneven distribution of income by sketching a Lorenz curve that lies above the diagonal.

The Lorenz curve is best used to measure international competitiveness.

Contrary to popular belief, the richest families in the United States became slightly poorer in recent years.

The distribution of income in developed countries is less egalitarian than less developed countries.

An example of in-kind assistance to the poor is TANF.

If a negative income tax system were implemented, then the poor would have no incentive to find work.

In the United States, families headed by single women have higher poverty rates than families headed by single men or by married couples.

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

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Exam 12: Income Distribution, Poverty, and Discrimination

When the Lorenz curve moves closer to the diagonal, this shows:

Which of the following is not included in census income?

A negative income tax program provides a simple way to assist the unemployed.

Critics of an equal distribution of income argue that the effect would be to raise the incentive to be productive.

Economists look at which of the following to get a quick visual expression of income distribution?

Exhibit 12-2 Lorenz curve -As shown in Exhibit 12-2, the distance between points B and D means that 60 percent of families earn ____ less of total income than required for perfect equality.

The Lorenz curve is best used to measure the distribution of income.

Since the 1970s, the percentage of total income earned by the poorest 20 percent of American families has fallen.

Exhibit 12-8 Negative income tax for a family -Under the negative income tax shown in Exhibit 12-8, what cash payment would a family with no earned income receive from the government?

The Lorenz curve measures the:

A graph that shows the percentage of the families on one axis and the percentage of income on the other is called the:

For the calculation of a Lorenz curve using quintiles, the:

Which of the following is an in-kind transfer payment?

Economists can illustrate an uneven distribution of income by sketching a Lorenz curve that lies above the diagonal.

The Lorenz curve is best used to measure international competitiveness.

Contrary to popular belief, the richest families in the United States became slightly poorer in recent years.

The distribution of income in developed countries is less egalitarian than less developed countries.

An example of in-kind assistance to the poor is TANF.

If a negative income tax system were implemented, then the poor would have no incentive to find work.

In the United States, families headed by single women have higher poverty rates than families headed by single men or by married couples.

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters