Question 1

Which of the following is a way income is redistributed in the United States?
i.subsidizing services
ii.income taxes
iii.income maintenance programs

Accepted Answer

A)  i only 
B)  ii only 
C)  ii and iii 
D)  i and iii 
E)  i, ii, and iii 
A)  i only 
B)  ii only 
C)  ii and iii 
D)  i and iii 
E)  i, ii, and iii

Question 2

________ is the single biggest factor affecting income distribution in the United States.

Accepted Answer

A)  Location of household 
B)  Type of household 
C)  Education 
D)  Age of household 
E)  Gender 
A)  Location of household 
B)  Type of household 
C)  Education 
D)  Age of household 
E)  Gender

Question 3

Which of the following is (are)an example of an income maintenance program?
i.unemployment compensation
ii.welfare programs
iii.Social Security programs

Accepted Answer

A)  i and iii 
B)  ii and iii 
C)  iii only 
D)  i and ii 
E)  i, ii, and iii 
A)  i and iii 
B)  ii and iii 
C)  iii only 
D)  i and ii 
E)  i, ii, and iii

Question 4

High-skilled workers earn more relative to low-skilled workers because the demand for high-skilled workers is ________ that for low-skilled workers and the supply is ________ that for low-skilled workers.

Accepted Answer

A)  greater than; greater than 
B)  greater than; lower than 
C)  lower than; greater than 
D)  lower than; lower than 
E)  greater than; the same as 
A)  greater than; greater than 
B)  greater than; lower than 
C)  lower than; greater than 
D)  lower than; lower than 
E)  greater than; the same as

Question 5

The demand for labor
i.depends on the availability of labor.
ii.decreases when the supply of labor increases.
iii.depends on the value of marginal product of labor.

Accepted Answer

A)  i only 
B)  i and ii 
C)  iii only 
D)  i and iii 
E)  i, ii, and iii 
A)  i only 
B)  i and ii 
C)  iii only 
D)  i and iii 
E)  i, ii, and iii

Question 6

In 2004 the wealthiest 1 percent of all U.S.households owned what percentage of total wealth?

Accepted Answer

A)  more than 30 percent 
B)  less than 10 percent 
C)  more than 40 percent 
D)  more than 50 percent 
E)  more than 45 percent 
A)  more than 30 percent 
B)  less than 10 percent 
C)  more than 40 percent 
D)  more than 50 percent 
E)  more than 45 percent

Question 7

A ________ tax is one that taxes income at an average rate that increases with the level of income.

Accepted Answer

A)  regressive 
B)  progressive 
C)  flat 
D)  consumption 
E)  proportional 
A)  regressive 
B)  progressive 
C)  flat 
D)  consumption 
E)  proportional

Question 8

Inequality in the distribution of income and wealth is increased by

Accepted Answer

A)  the point that the children of the poorest find it difficult to get into college. 
B)  saving to redistribute an uneven income over the life cycle. 
C)  marrying outside one's own socioeconomic class. 
D)  donating money to charities. 
E)  the U.S. income tax. 
A)  the point that the children of the poorest find it difficult to get into college. 
B)  saving to redistribute an uneven income over the life cycle. 
C)  marrying outside one's own socioeconomic class. 
D)  donating money to charities. 
E)  the U.S. income tax.

Question 9

Three types of income maintenance programs used by the United States are

Accepted Answer

A)  income taxes, Social Security, and the earned income tax credit. 
B)  Social Security programs, OASDHI, and income taxes. 
C)  Social Security programs, unemployment compensation, and welfare programs. 
D)  welfare programs, income taxes, and the earned income tax credit. 
E)  income taxes, Social Security, and subsidized services. 
A)  income taxes, Social Security, and the earned income tax credit. 
B)  Social Security programs, OASDHI, and income taxes. 
C)  Social Security programs, unemployment compensation, and welfare programs. 
D)  welfare programs, income taxes, and the earned income tax credit. 
E)  income taxes, Social Security, and subsidized services.

Question 10

$$\begin{array} { l c c } 
 { \begin{array} { l } 
\text { Household } \
\text { percentage }
\end{array} } & \begin{array} { c } 
\text { Percent of } \
\text { income } \
\text { Alpha }
\end{array} & \begin{array} { c } 
\text { Percent of } \
\text { income } \
\text { Beta }
\end{array} \
\hline \text { Lowest 20 percent } & 9 & 5 \
\text { Second 20 percent } & 10 & 5 \
\text { Third 20 percent } & 12 & 10 \
\text { Fourth 20 percent } & 29 & 20 \
\text { Highest 20 percent } & 40 & 60 \
\hline
\end{array}$$
-The above table shows the distribution of income in two countries,Alpha and Beta.In Country Beta,the richest 40 percent of households receive ________ percent of total income.

Accepted Answer

A)  20 
B)  40 
C)  60 
D)  80 
E)  100 
A)  20 
B)  40 
C)  60 
D)  80 
E)  100

Question 11

Of the following major characteristics that lead to income disparity,the factor with the smallest impact is

Accepted Answer

A)  sex. 
B)  race. 
C)  region of the country. 
D)  education. 
E)  number of people in the household. 
A)  sex. 
B)  race. 
C)  region of the country. 
D)  education. 
E)  number of people in the household.

Question 12

-In the figure above,the nation with the most equal distribution of income is nation

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  The distribution of income is the same in all three nations because their Lorenz curves can be plotted on the same diagram. 
E)  It is impossible to determine with the information given. 
A)  A. 
B)  B. 
C)  C. 
D)  The distribution of income is the same in all three nations because their Lorenz curves can be plotted on the same diagram. 
E)  It is impossible to determine with the information given.

Question 13

How does an increase in the cost to acquire a skill affect the vertical distance between the supply curves of high-skilled and low-skilled workers?

Accepted Answer

The vertical distance between the supply

Question 14

If discrimination against women decreases their value of marginal product,then women will have ________ wage rate than men and there will be ________ high-paying jobs for women.

Accepted Answer

A)  a lower; more 
B)  a higher; fewer 
C)  a lower; fewer 
D)  a higher; more 
E)  the same; fewer 
A)  a lower; more 
B)  a higher; fewer 
C)  a lower; fewer 
D)  a higher; more 
E)  the same; fewer

Question 15

Social Security and unemployment compensation

Accepted Answer

A)  are paid only to the poorest households. 
B)  are both funded by income taxes. 
C)  are distributed by individual states. 
D)  both redistribute income. 
E)  make the distribution of income less equal. 
A)  are paid only to the poorest households. 
B)  are both funded by income taxes. 
C)  are distributed by individual states. 
D)  both redistribute income. 
E)  make the distribution of income less equal.

Question 16

Of the following types of income tax systems,the one that provides the greatest amount of redistribution from the rich to the poor is a

Accepted Answer

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

Question 17

A household's income earned from the markets for factors of production and with no government redistribution is

Accepted Answer

A)  money income. 
B)  welfare. 
C)  market income. 
D)  exploitative income. 
E)  factored income. 
A)  money income. 
B)  welfare. 
C)  market income. 
D)  exploitative income. 
E)  factored income.

Question 18

Social Security is a ________ program paid for by ________.

Accepted Answer

A)  compulsory; payroll taxes 
B)  compulsory; government money 
C)  voluntary; payroll taxes 
D)  voluntary; income taxes 
E)  compulsory; voluntary taxes on income 
A)  compulsory; payroll taxes 
B)  compulsory; government money 
C)  voluntary; payroll taxes 
D)  voluntary; income taxes 
E)  compulsory; voluntary taxes on income

Question 19

What do the Lorenz curves for wealth and income in the United States look like? Which is closer to the line of equality?

Accepted Answer

Both the Lorenz curve for wealth and the

Question 20

The table below shows the distribution of market income in an economy.The government redistributes income by collecting income taxes and paying benefits shown in the table.
a.Calculate the income shares of each 20 percent of households after tax and redistribution.
   
b.In the figure below,draw the Lorenz curves for this economy,both before and after taxes and benefits.

Accepted Answer

@#IMG-DLM& 
a.The completed ta

Which of the following is a way income is redistributed in the United States? i.subsidizing services ii.income taxes iii.income maintenance programs

________ is the single biggest factor affecting income distribution in the United States.

Which of the following is (are)an example of an income maintenance program? i.unemployment compensation ii.welfare programs iii.Social Security programs

High-skilled workers earn more relative to low-skilled workers because the demand for high-skilled workers is that for low-skilled workers and the supply is that for low-skilled workers.

The demand for labor i.depends on the availability of labor. ii.decreases when the supply of labor increases. iii.depends on the value of marginal product of labor.

In 2004 the wealthiest 1 percent of all U.S.households owned what percentage of total wealth?

A ________ tax is one that taxes income at an average rate that increases with the level of income.

Inequality in the distribution of income and wealth is increased by

Three types of income maintenance programs used by the United States are

Of the following major characteristics that lead to income disparity,the factor with the smallest impact is

-In the figure above,the nation with the most equal distribution of income is nation

How does an increase in the cost to acquire a skill affect the vertical distance between the supply curves of high-skilled and low-skilled workers?

If discrimination against women decreases their value of marginal product,then women will have wage rate than men and there will be high-paying jobs for women.

Social Security and unemployment compensation

Of the following types of income tax systems,the one that provides the greatest amount of redistribution from the rich to the poor is a

A household's income earned from the markets for factors of production and with no government redistribution is

Social Security is a program paid for by .

What do the Lorenz curves for wealth and income in the United States look like? Which is closer to the line of equality?

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Filters

Exam 20: Economic Inequality

Which of the following is a way income is redistributed in the United States? i.subsidizing services ii.income taxes iii.income maintenance programs

________ is the single biggest factor affecting income distribution in the United States.

Which of the following is (are)an example of an income maintenance program? i.unemployment compensation ii.welfare programs iii.Social Security programs

High-skilled workers earn more relative to low-skilled workers because the demand for high-skilled workers is ________ that for low-skilled workers and the supply is ________ that for low-skilled workers.

The demand for labor i.depends on the availability of labor. ii.decreases when the supply of labor increases. iii.depends on the value of marginal product of labor.

In 2004 the wealthiest 1 percent of all U.S.households owned what percentage of total wealth?

A ________ tax is one that taxes income at an average rate that increases with the level of income.

Inequality in the distribution of income and wealth is increased by

Three types of income maintenance programs used by the United States are

Of the following major characteristics that lead to income disparity,the factor with the smallest impact is

-In the figure above,the nation with the most equal distribution of income is nation

How does an increase in the cost to acquire a skill affect the vertical distance between the supply curves of high-skilled and low-skilled workers?

If discrimination against women decreases their value of marginal product,then women will have ________ wage rate than men and there will be ________ high-paying jobs for women.

Social Security and unemployment compensation

Of the following types of income tax systems,the one that provides the greatest amount of redistribution from the rich to the poor is a

A household's income earned from the markets for factors of production and with no government redistribution is

Social Security is a ________ program paid for by ________.

What do the Lorenz curves for wealth and income in the United States look like? Which is closer to the line of equality?

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Filters

High-skilled workers earn more relative to low-skilled workers because the demand for high-skilled workers is that for low-skilled workers and the supply is that for low-skilled workers.

If discrimination against women decreases their value of marginal product,then women will have wage rate than men and there will be high-paying jobs for women.

Social Security is a program paid for by .