Question 1

-The Lorenz curves in the above figure imply that

Accepted Answer

A)  income is distributed more unequally than wealth. 
B)  wealth is distributed more unequally than income. 
C)  both wealth and income are distributed equally. 
D)  both wealth and income are distributed at the same level of inequality. 
A)  income is distributed more unequally than wealth. 
B)  wealth is distributed more unequally than income. 
C)  both wealth and income are distributed equally. 
D)  both wealth and income are distributed at the same level of inequality.

Question 2

Moe's Sweaters is a firm in perfect competition. Moe's customers don't know who the firm's workers are. If Moe is the only employer in the market who discriminates against women by paying them less than he pays to equally qualified men, his firm will

Accepted Answer

A)  lower its labor cost and receive a greater economic economic profit than its competitors. 
B)  receive a positive economic profit while its competitors will only receive a normal profit. 
C)  not maximize its economic profit and will not survive. 
D)  be able to lower its price and undercut the competitors. 
A)  lower its labor cost and receive a greater economic economic profit than its competitors. 
B)  receive a positive economic profit while its competitors will only receive a normal profit. 
C)  not maximize its economic profit and will not survive. 
D)  be able to lower its price and undercut the competitors.

Question 3

Which of the following taxes causes the greatest shift of the Lorenz curve toward the line of equality?

Accepted Answer

A)  proportional income tax 
B)  regressive income tax 
C)  flat-rate income tax 
D)  progressive income tax 
A)  proportional income tax 
B)  regressive income tax 
C)  flat-rate income tax 
D)  progressive income tax

Question 4

Customer discrimination against black investment advisers ________ the salaries of black investment advisors and ________ the number of black investment advisers.

Accepted Answer

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

Question 5

Suppose there are two types of labor, high skilled and low skilled. The demand curve for high skilled labor lies ________ the demand curve for low skilled labor and the supply curve of high skilled labor lies ________ the supply curve of low skilled labor.

Accepted Answer

A)  above; above 
B)  above; below 
C)  below; below 
D)  below; above 
A)  above; above 
B)  above; below 
C)  below; below 
D)  below; above

Question 6

The Lithuanian tax rate for all citizens' income is 24 percent and in Estonia, the tax rate is 21 percent. Lithuanian and Estonian income tax systems are examples of ________ taxes.

Accepted Answer

A)  proportional 
B)  progressive 
C)  regressive 
D)  equality 
A)  proportional 
B)  progressive 
C)  regressive 
D)  equality

Question 7

How do income and wealth change over a person's lifetime? How does this affect the distribution of income at a point in time?

Accepted Answer

On the average, incomes start out low, i

Question 8

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 the people in Konswano are aged 5, 15, 25, and 35, then the distribution of annual income

Accepted Answer

A)  is equal to the line of equality. 
B)  is above the line of equality. 
C)  has greater inequality than when everyone is 25 years old. 
D)  has greater equality than when everyone is 25 years old. 
A)  is equal to the line of equality. 
B)  is above the line of equality. 
C)  has greater inequality than when everyone is 25 years old. 
D)  has greater equality than when everyone is 25 years old.

Question 9

What factors explain why high-skilled workers are paid more than low-skilled workers?

Accepted Answer

High-skilled workers have a higher value

Question 10

-In the above figure, the long-run effect of providing university education at no charge to all qualified applicants would be to shift the curve SH

Accepted Answer

A)  and the curve SL leftward. 
B)  and the curve SL rightward. 
C)  leftward and the curve SL rightward. 
D)  rightward and the curve SL leftward. 
A)  and the curve SL leftward. 
B)  and the curve SL rightward. 
C)  leftward and the curve SL rightward. 
D)  rightward and the curve SL leftward.

Question 11

Wealth inequality persists across generations due, in part, to assortative mating.

Accepted Answer

A) True 
 B)False

Question 12

The entry of China and other developing countries into the global economy ________ the value of marginal product of factory workers in the United States and ________ their wage rate.

Accepted Answer

A)  increases; lowers 
B)  decreases; raises 
C)  decreases; lowers 
D)  increases; raises 
A)  increases; lowers 
B)  decreases; raises 
C)  decreases; lowers 
D)  increases; raises

Question 13

Which of the following is TRUE regarding the distribution of wealth and the distribution of income?

Accepted Answer

A)  The distribution of wealth is a less accurate measure of inequality because it excludes human capital. 
B)  The distribution of wealth is a more accurate measure of inequality because it includes houses. 
C)  The distribution of income is a less accurate measure of inequality because it excludes the value of things you own. 
D)  The distribution of income is a less accurate measure of inequality because not everyone has a job. 
A)  The distribution of wealth is a less accurate measure of inequality because it excludes human capital. 
B)  The distribution of wealth is a more accurate measure of inequality because it includes houses. 
C)  The distribution of income is a less accurate measure of inequality because it excludes the value of things you own. 
D)  The distribution of income is a less accurate measure of inequality because not everyone has a job.

Question 14

With respect to market and nonmarket production, on average working women are ________ diversified than men and receive ________ pay as a result.

Accepted Answer

A)  less; lower 
B)  less; higher 
C)  more; lower 
D)  more; higher 
A)  less; lower 
B)  less; higher 
C)  more; lower 
D)  more; higher

Question 15

A regressive income tax is defined as a tax for which

Accepted Answer

A)  total taxes paid increase with the level of income. 
B)  total taxes paid are independent of the level of income. 
C)  the average tax rate increases with the level of income. 
D)  the average tax rate decreases with the level of income. 
A)  total taxes paid increase with the level of income. 
B)  total taxes paid are independent of the level of income. 
C)  the average tax rate increases with the level of income. 
D)  the average tax rate decreases with the level of income.

Question 16

-The above figure shows the Lorenz curve for wealth for the nation of Rusha. The poorest forty percent of the population own what percent of wealth?

Accepted Answer

A)  0 percent 
B)  10 percent 
C)  20 percent 
D)  40 percent 
A)  0 percent 
B)  10 percent 
C)  20 percent 
D)  40 percent

Question 17

A tax is regressive if the average tax rate

Accepted Answer

A)  increases as income increases. 
B)  increases as income decreases. 
C)  is negative. 
D)  is less than one. 
A)  increases as income increases. 
B)  increases as income decreases. 
C)  is negative. 
D)  is less than one.

Question 18

According to an Asian Development Bank report in 2007, China's Gini coefficient, a statistical measure of wealth distribution in society, soared to 47.3 in 2004 from 40.7 in 1993, putting the country at a level more typical of Latin America. China experienced

Accepted Answer

A)  a decrease in income inequality. 
B)  an increase in income inequality. 
C)  a decrease in income. 
D)  an increase in income. 
A)  a decrease in income inequality. 
B)  an increase in income inequality. 
C)  a decrease in income. 
D)  an increase in income.

Question 19

-An economy has the income shares information in the table above. Which of the following is TRUE?

Accepted Answer

A)  The information in the table represents the income distribution in the United States. 
B)  Income in the U.S. economy is more equally distributed than that represented in the table. 
C)  Income in the U.S. economy is less equally distributed than that represented in the table. 
D)  The information in the table represents the wealth distribution in the United States. 
A)  The information in the table represents the income distribution in the United States. 
B)  Income in the U.S. economy is more equally distributed than that represented in the table. 
C)  Income in the U.S. economy is less equally distributed than that represented in the table. 
D)  The information in the table represents the wealth distribution in the United States.

Question 20

Redistribution programs create a disincentive to work among

Accepted Answer

A)  taxpayers only. 
B)  benefit recipients only. 
C)  both taxpayers and benefit recipients. 
D)  neither taxpayers nor benefit recipients. 
A)  taxpayers only. 
B)  benefit recipients only. 
C)  both taxpayers and benefit recipients. 
D)  neither taxpayers nor benefit recipients.

-The Lorenz curves in the above figure imply that

Moe's Sweaters is a firm in perfect competition. Moe's customers don't know who the firm's workers are. If Moe is the only employer in the market who discriminates against women by paying them less than he pays to equally qualified men, his firm will

Which of the following taxes causes the greatest shift of the Lorenz curve toward the line of equality?

Customer discrimination against black investment advisers the salaries of black investment advisors and the number of black investment advisers.

Suppose there are two types of labor, high skilled and low skilled. The demand curve for high skilled labor lies the demand curve for low skilled labor and the supply curve of high skilled labor lies the supply curve of low skilled labor.

The Lithuanian tax rate for all citizens' income is 24 percent and in Estonia, the tax rate is 21 percent. Lithuanian and Estonian income tax systems are examples of ________ taxes.

How do income and wealth change over a person's lifetime? How does this affect the distribution of income at a point in time?

What factors explain why high-skilled workers are paid more than low-skilled workers?

-In the above figure, the long-run effect of providing university education at no charge to all qualified applicants would be to shift the curve S_H

Wealth inequality persists across generations due, in part, to assortative mating.

The entry of China and other developing countries into the global economy the value of marginal product of factory workers in the United States and their wage rate.

Which of the following is TRUE regarding the distribution of wealth and the distribution of income?

With respect to market and nonmarket production, on average working women are diversified than men and receive pay as a result.

A regressive income tax is defined as a tax for which

-The above figure shows the Lorenz curve for wealth for the nation of Rusha. The poorest forty percent of the population own what percent of wealth?

A tax is regressive if the average tax rate

According to an Asian Development Bank report in 2007, China's Gini coefficient, a statistical measure of wealth distribution in society, soared to 47.3 in 2004 from 40.7 in 1993, putting the country at a level more typical of Latin America. China experienced

-An economy has the income shares information in the table above. Which of the following is TRUE?

Redistribution programs create a disincentive to work among

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

-The Lorenz curves in the above figure imply that

Moe's Sweaters is a firm in perfect competition. Moe's customers don't know who the firm's workers are. If Moe is the only employer in the market who discriminates against women by paying them less than he pays to equally qualified men, his firm will

Which of the following taxes causes the greatest shift of the Lorenz curve toward the line of equality?

Customer discrimination against black investment advisers ________ the salaries of black investment advisors and ________ the number of black investment advisers.

Suppose there are two types of labor, high skilled and low skilled. The demand curve for high skilled labor lies ________ the demand curve for low skilled labor and the supply curve of high skilled labor lies ________ the supply curve of low skilled labor.

The Lithuanian tax rate for all citizens' income is 24 percent and in Estonia, the tax rate is 21 percent. Lithuanian and Estonian income tax systems are examples of ________ taxes.

How do income and wealth change over a person's lifetime? How does this affect the distribution of income at a point in time?

What factors explain why high-skilled workers are paid more than low-skilled workers?

-In the above figure, the long-run effect of providing university education at no charge to all qualified applicants would be to shift the curve SH

Wealth inequality persists across generations due, in part, to assortative mating.

The entry of China and other developing countries into the global economy ________ the value of marginal product of factory workers in the United States and ________ their wage rate.

Which of the following is TRUE regarding the distribution of wealth and the distribution of income?

With respect to market and nonmarket production, on average working women are ________ diversified than men and receive ________ pay as a result.

A regressive income tax is defined as a tax for which

-The above figure shows the Lorenz curve for wealth for the nation of Rusha. The poorest forty percent of the population own what percent of wealth?

A tax is regressive if the average tax rate

According to an Asian Development Bank report in 2007, China's Gini coefficient, a statistical measure of wealth distribution in society, soared to 47.3 in 2004 from 40.7 in 1993, putting the country at a level more typical of Latin America. China experienced

-An economy has the income shares information in the table above. Which of the following is TRUE?

Redistribution programs create a disincentive to work among

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

Customer discrimination against black investment advisers the salaries of black investment advisors and the number of black investment advisers.

Suppose there are two types of labor, high skilled and low skilled. The demand curve for high skilled labor lies the demand curve for low skilled labor and the supply curve of high skilled labor lies the supply curve of low skilled labor.

-In the above figure, the long-run effect of providing university education at no charge to all qualified applicants would be to shift the curve S_H

The entry of China and other developing countries into the global economy the value of marginal product of factory workers in the United States and their wage rate.

With respect to market and nonmarket production, on average working women are diversified than men and receive pay as a result.