Question 1

With respect to redistribution, one reason "The Big Tradeoff" exists is because

Accepted Answer

A)  low income households do not pay enough taxes. 
B)  government policymakers must choose between funding the various programs. 
C)  government programs only employ resources that had no value to society otherwise. 
D)  redistribution weakens the incentive to work. 
A)  low income households do not pay enough taxes. 
B)  government policymakers must choose between funding the various programs. 
C)  government programs only employ resources that had no value to society otherwise. 
D)  redistribution weakens the incentive to work.

Question 2

Income (percent of total)
  
-The table above shows the income distribution in the United States and Italy in a recent year.
a) Draw a Lorenz curve for the United States. According to your graph, what is the percentage of income received by the poorest 30 percent of households? The richest 10 percent?
b) On the same graph, draw a Lorenz curve for Italy. According to your graph, what is the percentage of income received by the poorest 30 percent of households? The richest 10 percent?
c) Draw the line of equality. How is it related to the Lorenz curve?
d) Is income distributed more equally in the United States or in Italy? Which country's Gini ratio is closer to zero? Explain your answers.

Accepted Answer

@#IMG-DLM& a) See the figure above. The percentage

Question 3

Making the distribution of wealth ________ equal is ________.

Accepted Answer

A)  more; differences in degrees of specialization 
B)  less; differences in degrees of specialization 
C)  more; assortative mating 
D)  less; assortative mating 
A)  more; differences in degrees of specialization 
B)  less; differences in degrees of specialization 
C)  more; assortative mating 
D)  less; assortative mating

Question 4

Explain how redistributing income creates a deadweight loss.

Accepted Answer

When income is redistributed from a rich

Question 5

-The government in the country of Zappoo is trying to decide which tax plan to implement. The table above shows three alternative plans. If the government decides to implement a progressive income tax, it will implement tax plan

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  A or B. 
A)  A. 
B)  B. 
C)  C. 
D)  A or B.

Question 6

-The above figure shows the supply and demand curves for high-skilled and low-skilled labor. Low-skilled workers earn a wage rate of

Accepted Answer

A)  $15 per hour. 
B)  $12 per hour. 
C)  $9 per hour. 
D)  $6 per hour. 
A)  $15 per hour. 
B)  $12 per hour. 
C)  $9 per hour. 
D)  $6 per hour.

Question 7

A proportional income tax is a tax that taxes income at a constant rate.

Accepted Answer

A) True 
 B)False

Question 8

A government redistribution of income program is proposed with the aim of making the income distribution the same as the 45° line in a Lorenz curve diagram. What implications does the idea of the "big tradeoff" have for the program?

Accepted Answer

If the distribution of income was the sa

Question 9

If a Lorenz curve moves leftward and becomes closer to the line of equality over time, then

Accepted Answer

A)  the population is growing. 
B)  income is growing. 
C)  income is being more equally distributed. 
D)  income is being more unequally distributed. 
A)  the population is growing. 
B)  income is growing. 
C)  income is being more equally distributed. 
D)  income is being more unequally distributed.

Question 10

In the United States, measured wealth is distributed more unequally than income.

Accepted Answer

A) True 
 B)False

Question 11

Over the period from 1971 to 2012, the U.S. Gini ratio for household income ________, which means income inequality in the United States ________.

Accepted Answer

A)  increased; increased 
B)  increased; decreased 
C)  decreased; increased 
D)  decreased; decreased 
A)  increased; increased 
B)  increased; decreased 
C)  decreased; increased 
D)  decreased; decreased

Question 12

If customer discrimination does NOT exist, firms that discriminate on the basis of race or sex will

Accepted Answer

A)  have higher costs than those that do not. 
B)  have the same level of costs as those that do not. 
C)  have lower costs than those that do not. 
D)  tend to survive whereas firms that do not discriminate will tend to fail. 
A)  have higher costs than those that do not. 
B)  have the same level of costs as those that do not. 
C)  have lower costs than those that do not. 
D)  tend to survive whereas firms that do not discriminate will tend to fail.

Question 13

Relative to the demand curve for low-skilled workers, the demand curve for high-skilled workers lies

Accepted Answer

A)  to the right. 
B)  to the left. 
C)  below. 
D)  in the same place. 
A)  to the right. 
B)  to the left. 
C)  below. 
D)  in the same place.

Question 14

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

Accepted Answer

A)  0 percent 
B)  5 percent 
C)  40 percent 
D)  60 percent 
A)  0 percent 
B)  5 percent 
C)  40 percent 
D)  60 percent

Question 15

When a group is discriminated against, its

Accepted Answer

A)  wages fall but its employment does not. 
B)  employment and its wages decrease. 
C)  employment decreases but its wages do not. 
D)  employment and its wages are unaffected. 
A)  wages fall but its employment does not. 
B)  employment and its wages decrease. 
C)  employment decreases but its wages do not. 
D)  employment and its wages are unaffected.

Question 16

Since 1970, the world Gini ratio has ________ indicating that the world distribution of income has ________.

Accepted Answer

A)  risen; become more equal 
B)  fallen; become more equal 
C)  risen; become less equal 
D)  not changed; not changed 
A)  risen; become more equal 
B)  fallen; become more equal 
C)  risen; become less equal 
D)  not changed; not changed

Question 17

What is the difference between wealth and income?

Accepted Answer

Wealth is a stock of assets, that is, we

Question 18

The supply curve for high-skilled labor lies to the

Accepted Answer

A)  right of the supply curve for low-skilled labor because more people want a high-skilled job. 
B)  left of the supply curve for low-skilled labor because more people want a high-skilled job. 
C)  left of the supply curve for low-skilled labor because it is costly to acquire skills. 
D)  right of the supply curve for low-skilled labor because fewer high-skilled people are willing to work for a low wage. 
A)  right of the supply curve for low-skilled labor because more people want a high-skilled job. 
B)  left of the supply curve for low-skilled labor because more people want a high-skilled job. 
C)  left of the supply curve for low-skilled labor because it is costly to acquire skills. 
D)  right of the supply curve for low-skilled labor because fewer high-skilled people are willing to work for a low wage.

Question 19

Which of the following CORRECTLY describes characteristics of people who earn high incomes? I. Older, retired households have the highest incomes.
II) Married couples earned higher incomes than single people.
III) Households with Bachelor's degrees have higher incomes than households with doctorate degrees.

Accepted Answer

A)  I and II 
B)  I and III 
C)  II and III 
D)  II only 
A)  I and II 
B)  I and III 
C)  II and III 
D)  II only

Question 20

Sue has human capital worth $500,000 and nonhuman capital of $100,000. Todd has human capital worth $10,000 and nonhuman capital of $50,000. The return on each type of capital is 10 percent a year. According to the Census Bureau in the national wealth and income survey, Sue is

Accepted Answer

A)  as wealthy as Todd. 
B)  10 times wealthier than Todd. 
C)  twice as wealthy as Todd. 
D)  50 times wealthier than Todd. 
A)  as wealthy as Todd. 
B)  10 times wealthier than Todd. 
C)  twice as wealthy as Todd. 
D)  50 times wealthier than Todd.

With respect to redistribution, one reason "The Big Tradeoff" exists is because

Making the distribution of wealth equal is .

Explain how redistributing income creates a deadweight loss.

-The government in the country of Zappoo is trying to decide which tax plan to implement. The table above shows three alternative plans. If the government decides to implement a progressive income tax, it will implement tax plan

-The above figure shows the supply and demand curves for high-skilled and low-skilled labor. Low-skilled workers earn a wage rate of

A proportional income tax is a tax that taxes income at a constant rate.

A government redistribution of income program is proposed with the aim of making the income distribution the same as the 45° line in a Lorenz curve diagram. What implications does the idea of the "big tradeoff" have for the program?

If a Lorenz curve moves leftward and becomes closer to the line of equality over time, then

In the United States, measured wealth is distributed more unequally than income.

Over the period from 1971 to 2012, the U.S. Gini ratio for household income , which means income inequality in the United States .

If customer discrimination does NOT exist, firms that discriminate on the basis of race or sex will

Relative to the demand curve for low-skilled workers, the demand curve for high-skilled workers lies

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

When a group is discriminated against, its

Since 1970, the world Gini ratio has indicating that the world distribution of income has .

What is the difference between wealth and income?

The supply curve for high-skilled labor lies to the

Sue has human capital worth $500,000 and nonhuman capital of $100,000. Todd has human capital worth $10,000 and nonhuman capital of $50,000. The return on each type of capital is 10 percent a year. According to the Census Bureau in the national wealth and income survey, Sue is

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

With respect to redistribution, one reason "The Big Tradeoff" exists is because

Making the distribution of wealth ________ equal is ________.

Explain how redistributing income creates a deadweight loss.

-The government in the country of Zappoo is trying to decide which tax plan to implement. The table above shows three alternative plans. If the government decides to implement a progressive income tax, it will implement tax plan

-The above figure shows the supply and demand curves for high-skilled and low-skilled labor. Low-skilled workers earn a wage rate of

A proportional income tax is a tax that taxes income at a constant rate.

A government redistribution of income program is proposed with the aim of making the income distribution the same as the 45° line in a Lorenz curve diagram. What implications does the idea of the "big tradeoff" have for the program?

If a Lorenz curve moves leftward and becomes closer to the line of equality over time, then

In the United States, measured wealth is distributed more unequally than income.

Over the period from 1971 to 2012, the U.S. Gini ratio for household income ________, which means income inequality in the United States ________.

If customer discrimination does NOT exist, firms that discriminate on the basis of race or sex will

Relative to the demand curve for low-skilled workers, the demand curve for high-skilled workers lies

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

When a group is discriminated against, its

Since 1970, the world Gini ratio has ________ indicating that the world distribution of income has ________.

What is the difference between wealth and income?

The supply curve for high-skilled labor lies to the

Sue has human capital worth $500,000 and nonhuman capital of $100,000. Todd has human capital worth $10,000 and nonhuman capital of $50,000. The return on each type of capital is 10 percent a year. According to the Census Bureau in the national wealth and income survey, Sue is

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

Making the distribution of wealth equal is .

Over the period from 1971 to 2012, the U.S. Gini ratio for household income , which means income inequality in the United States .

Since 1970, the world Gini ratio has indicating that the world distribution of income has .