Question 1

Mode income is

Accepted Answer

A)  the most common income. 
B)  the average income. 
C)  the middle income level. 
D)  the same as money income. 
A)  the most common income. 
B)  the average income. 
C)  the middle income level. 
D)  the same as money income.

Question 2

If one person has all the income and everyone else has none, the Gini ratio is 1.

Accepted Answer

A) True 
 B)False

Question 3

-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 4

High-skilled workers have

Accepted Answer

A)  a lower value of marginal product because they have higher wages. 
B)  the same labor supply curve as do low-skilled workers. 
C)  more human capital than do low-skilled workers. 
D)  None of the above answers is correct. 
A)  a lower value of marginal product because they have higher wages. 
B)  the same labor supply curve as do low-skilled workers. 
C)  more human capital than do low-skilled workers. 
D)  None of the above answers is correct.

Question 5

Pamela Michelle Scott, a low income single mom, had just finished her monthly shopping to purchase 30 days' worth of meat from Hollins Market. She's reared five healthy children and said that she made good use of the free health clinics and food stamps. Pamela benefits from free health clinics which are ________ and food stamps which is a ________.

Accepted Answer

A)  Social Security programs; subsidized service 
B)  unemployment compensation programs; Social Security program 
C)  subsidized services; welfare program 
D)  welfare programs; unemployment compensation program 
A)  Social Security programs; subsidized service 
B)  unemployment compensation programs; Social Security program 
C)  subsidized services; welfare program 
D)  welfare programs; unemployment compensation program

Question 6

Information technologies ________ the demand for low-skilled labor, increase the ________ high-skilled labor, lower the wage rate of ________ labor, and raise the wage rate of ________ labor.

Accepted Answer

A)  decrease; demand for; low-skilled; high-skilled 
B)  decrease; supply of; low-skilled; high-skilled 
C)  do not change; supply of; high-skilled; low-skilled 
D)  do not change; demand for; high-skilled; low-skilled 
A)  decrease; demand for; low-skilled; high-skilled 
B)  decrease; supply of; low-skilled; high-skilled 
C)  do not change; supply of; high-skilled; low-skilled 
D)  do not change; demand for; high-skilled; low-skilled

Question 7

What is a Lorenz curve and what does it show?

Accepted Answer

A Lorenz curve graphs the cumulative per

Question 8

-The above figure shows the Lorenz curve for wealth for the nation of Rusha. What percent of wealth is owned by the poorest quintile?

Accepted Answer

A)  0 percent 
B)  5 percent 
C)  20 percent 
D)  35 percent 
A)  0 percent 
B)  5 percent 
C)  20 percent 
D)  35 percent

Question 9

Social security provides payments

Accepted Answer

A)  for food so that the poor can obtain a basic diet. 
B)  to aid married families with dependents. 
C)  to unemployed able-bodied workers. 
D)  to retired and disabled workers. 
A)  for food so that the poor can obtain a basic diet. 
B)  to aid married families with dependents. 
C)  to unemployed able-bodied workers. 
D)  to retired and disabled workers.

Question 10

The income distribution is a more accurate measure of economic inequality than the wealth distribution because income excludes human capital.

Accepted Answer

A) True 
 B)False

Question 11

-The above figure shows the Lorenz curve for wealth for the nation of Rusha. If the government were to confiscate half of the wealth from the wealthiest twenty percent of the population and give it to the poorest twenty percent, then

Accepted Answer

A)  wealth distribution would be more equal. 
B)  wealth distribution would be unchanged. 
C)  wealth distribution would be more unequal. 
D)  the Lorenz curve would shift rightward. 
A)  wealth distribution would be more equal. 
B)  wealth distribution would be unchanged. 
C)  wealth distribution would be more unequal. 
D)  the Lorenz curve would shift rightward.

Question 12

-Which of the following statements is TRUE?

Accepted Answer

A)  Both wealth and income measure variables over a period of time. 
B)  Wealth measures a variable at a point in time and income measures a variable over a period of time. 
C)  Wealth measures a variable over a period of time, and income measures a variable at a point in time. 
D)  Both wealth and income measure variables at a point in time. 
A)  Both wealth and income measure variables over a period of time. 
B)  Wealth measures a variable at a point in time and income measures a variable over a period of time. 
C)  Wealth measures a variable over a period of time, and income measures a variable at a point in time. 
D)  Both wealth and income measure variables at a point in time.

Question 13

Income redistribution

Accepted Answer

A)  creates an income distribution that is less equal than the market distribution. 
B)  is efficient because it makes the distribution of income more equal. 
C)  eliminates the big tradeoff between rich and poor. 
D)  creates a deadweight loss. 
A)  creates an income distribution that is less equal than the market distribution. 
B)  is efficient because it makes the distribution of income more equal. 
C)  eliminates the big tradeoff between rich and poor. 
D)  creates a deadweight loss.

Question 14

-The above table shows the distribution of wealth and income in Miseria. The Lorenz curve for wealth would

Accepted Answer

A)  be parallel to the line of equality. 
B)  lie to the left of the Lorenz curve for income. 
C)  become flatter when moving from left to right. 
D)  intersect the horizontal axis at twenty percent. 
A)  be parallel to the line of equality. 
B)  lie to the left of the Lorenz curve for income. 
C)  become flatter when moving from left to right. 
D)  intersect the horizontal axis at twenty percent.

Question 15

In the country of Konswano there are 4 people. Each person lives for 40 years. In their first 10 years, they earn no income. In the next 20 years, they earn $40,000 per year and in the last 10 years they earn no income. Each year their consumption is $20,000. If everyone in Konswano is 25 years old, then the Lorenz curve for income is

Accepted Answer

A)  above the Lorenz curve for wealth. 
B)  above the line of equality. 
C)  equal to the line of equality. 
D)  below the Lorenz curve for wealth. 
A)  above the Lorenz curve for wealth. 
B)  above the line of equality. 
C)  equal to the line of equality. 
D)  below the Lorenz curve for wealth.

Question 16

-The above figure shows the Lorenz curves for four different countries. Which country has the most unequal distribution of income?

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 17

Because of their higher value of marginal product

Accepted Answer

A)  the demand curve for high-skilled workers lies to the right of the demand curve for low-skilled workers. 
B)  the demand curve for high-skilled workers lies to the left of the demand curve for low-skilled workers. 
C)  the supply curve for high-skilled workers lies to the right of the supply curve for low-skilled workers. 
D)  the demand curve for high-skilled workers lies to the left of the supply curve for low-skilled workers. 
A)  the demand curve for high-skilled workers lies to the right of the demand curve for low-skilled workers. 
B)  the demand curve for high-skilled workers lies to the left of the demand curve for low-skilled workers. 
C)  the supply curve for high-skilled workers lies to the right of the supply curve for low-skilled workers. 
D)  the demand curve for high-skilled workers lies to the left of the supply curve for low-skilled workers.

Question 18

The Gini ratio is a measure of

Accepted Answer

A)  income inequality. 
B)  wealth distribution. 
C)  income distribution. 
D)  income as compared to wealth. 
A)  income inequality. 
B)  wealth distribution. 
C)  income distribution. 
D)  income as compared to wealth.

Question 19

The distribution of world income is ________ the distribution of U.S. income.

Accepted Answer

A)  more equal than 
B)  less equal than 
C)  the same as 
D)  not comparable to 
A)  more equal than 
B)  less equal than 
C)  the same as 
D)  not comparable to

Question 20

With respect to income redistribution programs, what is meant by "The Big Tradeoff," and what causes it?

Accepted Answer

The big tradeoff refers to the tradeoff

Mode income is

If one person has all the income and everyone else has none, the Gini ratio is 1.

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

High-skilled workers have

Information technologies the demand for low-skilled labor, increase the high-skilled labor, lower the wage rate of labor, and raise the wage rate of labor.

What is a Lorenz curve and what does it show?

-The above figure shows the Lorenz curve for wealth for the nation of Rusha. What percent of wealth is owned by the poorest quintile?

Social security provides payments

The income distribution is a more accurate measure of economic inequality than the wealth distribution because income excludes human capital.

-The above figure shows the Lorenz curve for wealth for the nation of Rusha. If the government were to confiscate half of the wealth from the wealthiest twenty percent of the population and give it to the poorest twenty percent, then

-Which of the following statements is TRUE?

Income redistribution

-The above table shows the distribution of wealth and income in Miseria. The Lorenz curve for wealth would

-The above figure shows the Lorenz curves for four different countries. Which country has the most unequal distribution of income?

Because of their higher value of marginal product

The Gini ratio is a measure of

The distribution of world income is ________ the distribution of U.S. income.

With respect to income redistribution programs, what is meant by "The Big Tradeoff," and what causes it?

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Uncertainty and Information

Filters

Exam 19: Economic Inequality

Mode income is

If one person has all the income and everyone else has none, the Gini ratio is 1.

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

High-skilled workers have

Information technologies ________ the demand for low-skilled labor, increase the ________ high-skilled labor, lower the wage rate of ________ labor, and raise the wage rate of ________ labor.

What is a Lorenz curve and what does it show?

-The above figure shows the Lorenz curve for wealth for the nation of Rusha. What percent of wealth is owned by the poorest quintile?

Social security provides payments

The income distribution is a more accurate measure of economic inequality than the wealth distribution because income excludes human capital.

-The above figure shows the Lorenz curve for wealth for the nation of Rusha. If the government were to confiscate half of the wealth from the wealthiest twenty percent of the population and give it to the poorest twenty percent, then

-Which of the following statements is TRUE?

Income redistribution

-The above table shows the distribution of wealth and income in Miseria. The Lorenz curve for wealth would

-The above figure shows the Lorenz curves for four different countries. Which country has the most unequal distribution of income?

Because of their higher value of marginal product

The Gini ratio is a measure of

The distribution of world income is ________ the distribution of U.S. income.

With respect to income redistribution programs, what is meant by "The Big Tradeoff," and what causes it?

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Uncertainty and Information

Filters

Information technologies the demand for low-skilled labor, increase the high-skilled labor, lower the wage rate of labor, and raise the wage rate of labor.