Question 1

After 1929 in the United States, as measured by the Lorenz curve, income inequality:

Accepted Answer

A)  increased sharply. 
B)  remain unchanged. 
C)  declined. 
D)  increased. 
A)  increased sharply. 
B)  remain unchanged. 
C)  declined. 
D)  increased.

Question 2

Wage discrimination means workers with equal productivity are paid unequal wages, or workers with unequal productivity are paid equal wages.

Accepted Answer

A) True 
 B)False

Question 3

Discrimination lowers the average wage of members of one group of workers in spite of laws that require equal pay for all workers.

Accepted Answer

A) True 
 B)False

Question 4

The distribution of income has become more equal since 1929.

Accepted Answer

A) True 
 B)False

Question 5

The poorest 20 percent of the U.S. population received approximately ____ of total income.

Accepted Answer

A)  5 percent 
B)  10 percent 
C)  15 percent 
D)  20 percent 
A)  5 percent 
B)  10 percent 
C)  15 percent 
D)  20 percent

Question 6

Some people believe that employees should be paid the same wages when their jobs, although different, require similar levels of education, training, experience, and responsibility. This principle is known as:

Accepted Answer

A)  the equal-pay-for-equal work doctrine. 
B)  Lorenz equivalence. 
C)  marginal productivity theory. 
D)  comparable worth. 
A)  the equal-pay-for-equal work doctrine. 
B)  Lorenz equivalence. 
C)  marginal productivity theory. 
D)  comparable worth.

Question 7

Medicaid is an example of a cash assistance poverty program.

Accepted Answer

A) True 
 B)False

Question 8

Consider a law that limits women's access to certain "dangerous" occupations like coal mining and military combat service. Such a law would likely reduce women's wages because:

Accepted Answer

A)  women would be overqualified for "non-dangerous" jobs. 
B)  labor supply in female-intensive occupations would increase. 
C)  women would be less likely to obtain college degrees. 
D)  comparable worth would no longer exist between men's and women's occupations. 
A)  women would be overqualified for "non-dangerous" jobs. 
B)  labor supply in female-intensive occupations would increase. 
C)  women would be less likely to obtain college degrees. 
D)  comparable worth would no longer exist between men's and women's occupations.

Question 9

Food stamps and Medicaid are in-kind transfer programs.

Accepted Answer

A) True 
 B)False

Question 10

According to the statistics, the distribution of money income:

Accepted Answer

A)  fluctuated widely since 1947. 
B)  changed significantly in favor of the bottom 5 percent. 
C)  has not changed greatly since 1947. 
D)  has not changed greatly since 1929. 
A)  fluctuated widely since 1947. 
B)  changed significantly in favor of the bottom 5 percent. 
C)  has not changed greatly since 1947. 
D)  has not changed greatly since 1929.

Question 11

Using the Lorenz curve, the degree of income inequality is measured by the:

Accepted Answer

A)  line connecting all points for which a given percentage of families receives exactly that cumulative percentage of income. 
B)  distance of the Lorenz curve from the line of perfect equality. 
C)  flat diagonal line that applies to a perfectly elastic demand curve. 
D)  number of times the Lorenz curve crosses the line of perfect equality. 
A)  line connecting all points for which a given percentage of families receives exactly that cumulative percentage of income. 
B)  distance of the Lorenz curve from the line of perfect equality. 
C)  flat diagonal line that applies to a perfectly elastic demand curve. 
D)  number of times the Lorenz curve crosses the line of perfect equality.

Question 12

Which of the following might increase the supply curve of labor?

Accepted Answer

A)  Elimination of discrimination against blacks. 
B)  Elimination of discrimination against females. 
C)  Easing licensing requirements. 
D)  All of these. 
A)  Elimination of discrimination against blacks. 
B)  Elimination of discrimination against females. 
C)  Easing licensing requirements. 
D)  All of these.

Question 13

If official U.S. poverty statistics included in-kind transfer payments the:

Accepted Answer

A)  poverty rate would be close to zero. 
B)  poverty rate would be lower. 
C)  government deficit would be lower. 
D)  top 10 percent of those in the income distribution would be wealthier. 
A)  poverty rate would be close to zero. 
B)  poverty rate would be lower. 
C)  government deficit would be lower. 
D)  top 10 percent of those in the income distribution would be wealthier.

Question 14

Exhibit 12-4 Lorenz curve  
-As shown in Exhibit 12-4, 40 percent of families earned a cumulative share of about ____ percent of income.

Accepted Answer

A)  5 
B)  15 
C)  30 
D)  50 
A)  5 
B)  15 
C)  30 
D)  50

Question 15

When the Lorenz curve lies above the diagonal,

Accepted Answer

A)  the poorest 20 percent of the population receive more than 20 percent of income. 
B)  the richest 20 percent of the population receive more than 20 percent of income. 
C)  everyone receives the same income. 
D)  the country's income has been rising over time. 
E)  it is wrong since it is impossible for the graph to look like this. 
A)  the poorest 20 percent of the population receive more than 20 percent of income. 
B)  the richest 20 percent of the population receive more than 20 percent of income. 
C)  everyone receives the same income. 
D)  the country's income has been rising over time. 
E)  it is wrong since it is impossible for the graph to look like this.

Question 16

Which of the following countries has the most unequal distribution of income?

Accepted Answer

A)  The United States. 
B)  Czech Republic. 
C)  Brazil. 
D)  cannot be determined. 
A)  The United States. 
B)  Czech Republic. 
C)  Brazil. 
D)  cannot be determined.

Question 17

The U.S. Lorenz curve today is closer to the perfect equality line than in 1929.

Accepted Answer

A) True 
 B)False

Question 18

Exhibit 12-1 Income distribution for three countries $$\begin{array} { | l | c | c | c | } 
\hline \text { Quintile } & \text { Country I (\%) } & \text { Country II (\%) } & \text { Country III (\%) } \
\hline\text { Poorest } & 6 & 8 & 4 \
\text { Second } & 12 & 12 & 8 \
\text { Third } & 15 & 15 & 10 \
\text { Fourth } & 27 & 30 & 30 \
\text { Richest } & 40 & 35 & 48 \
\hline
\end{array}$$
-Exhibit 12-1 shows the percentage of income received by each population quintile. From this chart we can conclude:

Accepted Answer

A)  Country I has the most unequal income distribution. 
B)  Country III has the most equal income distribution. 
C)  Country II has the most unequal income distribution. 
D)  Country II has the most equal income distribution. 
E)  Country III has a more equal income distribution than Country II. 
A)  Country I has the most unequal income distribution. 
B)  Country III has the most equal income distribution. 
C)  Country II has the most unequal income distribution. 
D)  Country II has the most equal income distribution. 
E)  Country III has a more equal income distribution than Country II.

Question 19

Exhibit 12-3 Lorenz curve for an economy  
-According to the Lorenz curve shown in Exhibit 12-3, what percentage of total income is earned by the richest 20 percent of families?

Accepted Answer

A)  20 percent. 
B)  40 percent. 
C)  60 percent. 
D)  80 percent. 
A)  20 percent. 
B)  40 percent. 
C)  60 percent. 
D)  80 percent.

Question 20

Exhibit 12-6 Lorenz curves  
-Exhibit 12-6 shows the Lorenz Curve for three countries, I, II, and III. Of the three countries shown,

Accepted Answer

A)  Country III has the most unequal income distribution. 
B)  Country II has the most unequal income distribution. 
C)  Country I has the most unequal income distribution. 
D)  Country III has the most equal income distribution. 
E)  Country II has a more equal income distribution than Country I. 
A)  Country III has the most unequal income distribution. 
B)  Country II has the most unequal income distribution. 
C)  Country I has the most unequal income distribution. 
D)  Country III has the most equal income distribution. 
E)  Country II has a more equal income distribution than Country I.

After 1929 in the United States, as measured by the Lorenz curve, income inequality:

Wage discrimination means workers with equal productivity are paid unequal wages, or workers with unequal productivity are paid equal wages.

Discrimination lowers the average wage of members of one group of workers in spite of laws that require equal pay for all workers.

The distribution of income has become more equal since 1929.

The poorest 20 percent of the U.S. population received approximately ____ of total income.

Some people believe that employees should be paid the same wages when their jobs, although different, require similar levels of education, training, experience, and responsibility. This principle is known as:

Medicaid is an example of a cash assistance poverty program.

Consider a law that limits women's access to certain "dangerous" occupations like coal mining and military combat service. Such a law would likely reduce women's wages because:

Food stamps and Medicaid are in-kind transfer programs.

According to the statistics, the distribution of money income:

Using the Lorenz curve, the degree of income inequality is measured by the:

Which of the following might increase the supply curve of labor?

If official U.S. poverty statistics included in-kind transfer payments the:

Exhibit 12-4 Lorenz curve -As shown in Exhibit 12-4, 40 percent of families earned a cumulative share of about ____ percent of income.

When the Lorenz curve lies above the diagonal,

Which of the following countries has the most unequal distribution of income?

The U.S. Lorenz curve today is closer to the perfect equality line than in 1929.

Exhibit 12-3 Lorenz curve for an economy -According to the Lorenz curve shown in Exhibit 12-3, what percentage of total income is earned by the richest 20 percent of families?

Exhibit 12-6 Lorenz curves -Exhibit 12-6 shows the Lorenz Curve for three countries, I, II, and III. Of the three countries shown,

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Price Elasticity of Demand and Supply

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Exam 12: Income Distribution, Poverty, and Discrimination

After 1929 in the United States, as measured by the Lorenz curve, income inequality:

Wage discrimination means workers with equal productivity are paid unequal wages, or workers with unequal productivity are paid equal wages.

Discrimination lowers the average wage of members of one group of workers in spite of laws that require equal pay for all workers.

The distribution of income has become more equal since 1929.

The poorest 20 percent of the U.S. population received approximately ____ of total income.

Some people believe that employees should be paid the same wages when their jobs, although different, require similar levels of education, training, experience, and responsibility. This principle is known as:

Medicaid is an example of a cash assistance poverty program.

Consider a law that limits women's access to certain "dangerous" occupations like coal mining and military combat service. Such a law would likely reduce women's wages because:

Food stamps and Medicaid are in-kind transfer programs.

According to the statistics, the distribution of money income:

Using the Lorenz curve, the degree of income inequality is measured by the:

Which of the following might increase the supply curve of labor?

If official U.S. poverty statistics included in-kind transfer payments the:

Exhibit 12-4 Lorenz curve -As shown in Exhibit 12-4, 40 percent of families earned a cumulative share of about ____ percent of income.

When the Lorenz curve lies above the diagonal,

Which of the following countries has the most unequal distribution of income?

The U.S. Lorenz curve today is closer to the perfect equality line than in 1929.

Exhibit 12-3 Lorenz curve for an economy -According to the Lorenz curve shown in Exhibit 12-3, what percentage of total income is earned by the richest 20 percent of families?

Exhibit 12-6 Lorenz curves -Exhibit 12-6 shows the Lorenz Curve for three countries, I, II, and III. Of the three countries shown,

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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