Question 1

Workers who have invested in education and training

Accepted Answer

A)  are more likely to find jobs that are not rewarding. 
B)  have a higher value of marginal product. 
C)  have a more difficult time finding a job because their wage rate is higher. 
D)  have identical supply curves to otherwise similar workers who have not invested in education and training. 
E)  None of the above answers is correct. 
A)  are more likely to find jobs that are not rewarding. 
B)  have a higher value of marginal product. 
C)  have a more difficult time finding a job because their wage rate is higher. 
D)  have identical supply curves to otherwise similar workers who have not invested in education and training. 
E)  None of the above answers is correct.

Question 2

The ________ distance between the supply curve of low-skilled labor and the supply curve of high-skilled labor is the ________.

Accepted Answer

A)  horizontal; value of marginal product of skill 
B)  horizontal; compensation for cost of acquiring skill 
C)  vertical; value of marginal product of skill 
D)  vertical; compensation for cost of acquiring skill 
E)  vertical; difference in the price of the product produced b y high-skilled labor minus the price of the product produced by low-skilled labor 
A)  horizontal; value of marginal product of skill 
B)  horizontal; compensation for cost of acquiring skill 
C)  vertical; value of marginal product of skill 
D)  vertical; compensation for cost of acquiring skill 
E)  vertical; difference in the price of the product produced b y high-skilled labor minus the price of the product produced by low-skilled labor

Question 3

Assume a negative income tax is set up with a 20 percent tax rate on market income and a guaranteed minimum income of $9,000.
a.What is the amount of taxes a household with $23,000 of market income pays or the amount of taxes this household receives?
b.What is the amount of taxes a household with $65,000 of market income pays or the amount of taxes this household receives?

Accepted Answer

a.The taxes paid with market income of $

Question 4

Of age,marital status,family size,education,and race,which is the single biggest factor affecting the household income distribution?

Accepted Answer

The single most important fact

Question 5

Which of the following statements is true regarding the distribution of income in the United States?

Accepted Answer

A)  The Lorenz curve shows that incomes are distributed fairly. 
B)  The line of equality shows that incomes are distributed equally. 
C)  The inequality in the distribution of income can be seen because the Lorenz curve lies below the line of equality. 
D)  The inequality in the distribution of income can be seen because the Lorenz curve lies above the line of equality. 
E)  Both answers A and B are correct. 
A)  The Lorenz curve shows that incomes are distributed fairly. 
B)  The line of equality shows that incomes are distributed equally. 
C)  The inequality in the distribution of income can be seen because the Lorenz curve lies below the line of equality. 
D)  The inequality in the distribution of income can be seen because the Lorenz curve lies above the line of equality. 
E)  Both answers A and B are correct.

Question 6

The figure above shows the demand and supply curves for high-skilled (indicated by an "H" subscript) and low-skilled (indicated by an "L" subscript) workers.
-In the figure above,the value of the marginal product of skill creates the difference between the ________ curves and ________.

Accepted Answer

A)  SL and SH; is equal to $10 per hour 
B)  SL and SH; exceeds $10 per hour 
C)  DL and DH; is less than $10 per hour 
D)  DL and DH; is equal to $10 per hour 
E)  DL and DH; exceeds $10 per hour 
A)  SL and SH; is equal to $10 per hour 
B)  SL and SH; exceeds $10 per hour 
C)  DL and DH; is less than $10 per hour 
D)  DL and DH; is equal to $10 per hour 
E)  DL and DH; exceeds $10 per hour

Question 7

$$\begin{array} { | c | c | } 
\hline \text { Group } & \begin{array} { c } 
\text { Percent of } \
\text { income }
\end{array} \
\hline \text { Poorest } 20 \% & 5 \
\hline \text { Second poorest } 20 \% & 10 \
\hline \text { Middle } 20 \% & 15 \
\hline \text { Second richest } 20 \% & 25 \
\hline \text { Richest } 20 \% & 45 \
\hline
\end{array}$$ 
The table gives the distribution of income in Mise
-What percent of income is earned by the richest 60 percent of the population?

Accepted Answer

A)  25 percent 
B)  30 percent 
C)  55 percent 
D)  85 percent 
E)  More information is needed to answer the question. 
A)  25 percent 
B)  30 percent 
C)  55 percent 
D)  85 percent 
E)  More information is needed to answer the question.

Question 8

The demand curve for high-skilled workers

Accepted Answer

A)  lies to the right of the demand curve for low-skilled workers. 
B)  lies to the left of the demand curve for low-skilled workers. 
C)  is vertical. 
D)  is horizontal. 
E)  lies to the right of the demand curve for low-skilled workers at high wages and to the left of the demand curve for low-skilled workers at low wages. 
A)  lies to the right of the demand curve for low-skilled workers. 
B)  lies to the left of the demand curve for low-skilled workers. 
C)  is vertical. 
D)  is horizontal. 
E)  lies to the right of the demand curve for low-skilled workers at high wages and to the left of the demand curve for low-skilled workers at low wages.

Question 9

A progressive income tax is a tax for which the average tax rate

Accepted Answer

A)  increases as income increases. 
B)  becomes negative as income decreases. 
C)  decreases as income increases. 
D)  stays the same regardless of the income level. 
E)  first slowly decreases and then rapidly increases as income increases. 
A)  increases as income increases. 
B)  becomes negative as income decreases. 
C)  decreases as income increases. 
D)  stays the same regardless of the income level. 
E)  first slowly decreases and then rapidly increases as income increases.

Question 10

The wage differential between high-skilled and low-skilled workers is the result of

Accepted Answer

A)  a difference in the value of marginal product. 
B)  the cost of acquiring skills. 
C)  a negative income tax. 
D)  Both answers A and B are correct. 
E)  Both answers B and C are correct. 
A)  a difference in the value of marginal product. 
B)  the cost of acquiring skills. 
C)  a negative income tax. 
D)  Both answers A and B are correct. 
E)  Both answers B and C are correct.

Question 11

In the United States since 1970,the share of money income received by the richest 20 percent of households has ________ and the share of income received by the lowest 20 percent of households has ________.

Accepted Answer

A)  increased; not changed 
B)  not changed; increased 
C)  not changed; decreased 
D)  decreased; increased 
E)  increased; decreased 
A)  increased; not changed 
B)  not changed; increased 
C)  not changed; decreased 
D)  decreased; increased 
E)  increased; decreased

Question 12

Other things being equal,the demand curve for low-skilled workers ________ the demand curve for high-skilled workers.

Accepted Answer

A)  lies below 
B)  lies above 
C)  is the same as 
D)  is not comparable to 
E)  at high wages lies below and at low wages lies above 
A)  lies below 
B)  lies above 
C)  is the same as 
D)  is not comparable to 
E)  at high wages lies below and at low wages lies above

Question 13

Looking at wage differentials between white women and white men in the United States since 2000,we see that the amount of the difference

Accepted Answer

A)  has not changed. 
B)  has increased. 
C)  has decreased. 
D)  at first increased but in the last decade it decreased. 
E)  at first decreased but in the last decade it increased. 
A)  has not changed. 
B)  has increased. 
C)  has decreased. 
D)  at first increased but in the last decade it decreased. 
E)  at first decreased but in the last decade it increased.

Question 14

-The table above gives cumulative percent of income received by each 20 percent group of households.Label the figure below and then plot the Lorenz curves.In which nation is income more equally distributed?

Accepted Answer

@#IMG-DLM& The Lorenz curves a

Question 15

Suppose a state charges an in-state student $2000 in tuition for a college education and charges an out-of -state student $10,000 in tuition.This differential

Accepted Answer

A)  is a result of the state subsidizing education for its residents. 
B)  explains the difference between the demand curve for high-skilled and low-skilled labor. 
C)  explains the difference between the supply curve for high-skilled and low-skilled labor. 
D)  can be corrected via a negative income tax. 
E)  is an example of the positive theories of income redistribution. 
A)  is a result of the state subsidizing education for its residents. 
B)  explains the difference between the demand curve for high-skilled and low-skilled labor. 
C)  explains the difference between the supply curve for high-skilled and low-skilled labor. 
D)  can be corrected via a negative income tax. 
E)  is an example of the positive theories of income redistribution.

Question 16

High-skilled workers earn more than low-skilled workers in part because the high-skilled workers have

Accepted Answer

A)  a higher value of marginal product. 
B)  a lower value of marginal product. 
C)  better health. 
D)  fewer deductions. 
E)  a greater supply than do low-skilled workers. 
A)  a higher value of marginal product. 
B)  a lower value of marginal product. 
C)  better health. 
D)  fewer deductions. 
E)  a greater supply than do low-skilled workers.

Question 17

One reason why economists earn more than Taco Bell workers is because economists have a ________ value of marginal product of labor than Taco Bell workers.

Accepted Answer

A)  lower 
B)  higher 
C)  similar 
D)  more convex 
E)  more concave 
A)  lower 
B)  higher 
C)  similar 
D)  more convex 
E)  more concave

Question 18

The larger the value of marginal product of a skill,the

Accepted Answer

A)  larger the vertical difference between the demand curves for high- and low-skilled labor. 
B)  smaller the vertical difference between the demand curves for high- and low-skilled labor. 
C)  larger the vertical distance between the supply curves for high- and low-skilled labor. 
D)  smaller the vertical distance between the supply curves for high- and low-skilled labor. 
E)  higher is the wage rate at which the demand curve for high-skilled workers crosses the demand curve for low-skilled workers. 
A)  larger the vertical difference between the demand curves for high- and low-skilled labor. 
B)  smaller the vertical difference between the demand curves for high- and low-skilled labor. 
C)  larger the vertical distance between the supply curves for high- and low-skilled labor. 
D)  smaller the vertical distance between the supply curves for high- and low-skilled labor. 
E)  higher is the wage rate at which the demand curve for high-skilled workers crosses the demand curve for low-skilled workers.

Question 19

At any wage rate,the quantity of welders willing to work is less than the quantity of tomato pickers.Why?

Accepted Answer

For the welder the cost of acquiring his

Question 20

Looking at the income distribution in the United States since 1970,we see that

Accepted Answer

A)  only the lowest 20 percent and highest 20 percent increased their shares of income. 
B)  the lower 50 percent increased its share of income and the upper 50 percent stayed the same. 
C)  the highest 20 percent increased its share of income. 
D)  all the 20 percent groups increased their shares of income. 
E)  the lower 50 percent increased its share of income and the upper 50 percent decreased its share of income. 
A)  only the lowest 20 percent and highest 20 percent increased their shares of income. 
B)  the lower 50 percent increased its share of income and the upper 50 percent stayed the same. 
C)  the highest 20 percent increased its share of income. 
D)  all the 20 percent groups increased their shares of income. 
E)  the lower 50 percent increased its share of income and the upper 50 percent decreased its share of income.

Workers who have invested in education and training

The distance between the supply curve of low-skilled labor and the supply curve of high-skilled labor is the .

Of age,marital status,family size,education,and race,which is the single biggest factor affecting the household income distribution?

Which of the following statements is true regarding the distribution of income in the United States?

The figure above shows the demand and supply curves for high-skilled (indicated by an "H" subscript) and low-skilled (indicated by an "L" subscript) workers. -In the figure above,the value of the marginal product of skill creates the difference between the curves and .

Group Percent of income Poorest 20\% 5 Second poorest 20\% 10 Middle 20\% 15 Second richest 20\% 25 Richest 20\% 45 The table gives the distribution of income in Mise -What percent of income is earned by the richest 60 percent of the population?

The demand curve for high-skilled workers

A progressive income tax is a tax for which the average tax rate

The wage differential between high-skilled and low-skilled workers is the result of

In the United States since 1970,the share of money income received by the richest 20 percent of households has and the share of income received by the lowest 20 percent of households has .

Other things being equal,the demand curve for low-skilled workers ________ the demand curve for high-skilled workers.

Looking at wage differentials between white women and white men in the United States since 2000,we see that the amount of the difference

-The table above gives cumulative percent of income received by each 20 percent group of households.Label the figure below and then plot the Lorenz curves.In which nation is income more equally distributed?

Suppose a state charges an in-state student $2000 in tuition for a college education and charges an out-of -state student $10,000 in tuition.This differential

High-skilled workers earn more than low-skilled workers in part because the high-skilled workers have

One reason why economists earn more than Taco Bell workers is because economists have a ________ value of marginal product of labor than Taco Bell workers.

The larger the value of marginal product of a skill,the

At any wage rate,the quantity of welders willing to work is less than the quantity of tomato pickers.Why?

Looking at the income distribution in the United States since 1970,we see that

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

Workers who have invested in education and training

The ________ distance between the supply curve of low-skilled labor and the supply curve of high-skilled labor is the ________.

Of age,marital status,family size,education,and race,which is the single biggest factor affecting the household income distribution?

Which of the following statements is true regarding the distribution of income in the United States?

The figure above shows the demand and supply curves for high-skilled (indicated by an "H" subscript) and low-skilled (indicated by an "L" subscript) workers. -In the figure above,the value of the marginal product of skill creates the difference between the ________ curves and ________.

Group Percent of income Poorest 20\% 5 Second poorest 20\% 10 Middle 20\% 15 Second richest 20\% 25 Richest 20\% 45 The table gives the distribution of income in Mise -What percent of income is earned by the richest 60 percent of the population?

The demand curve for high-skilled workers

A progressive income tax is a tax for which the average tax rate

The wage differential between high-skilled and low-skilled workers is the result of

In the United States since 1970,the share of money income received by the richest 20 percent of households has ________ and the share of income received by the lowest 20 percent of households has ________.

Other things being equal,the demand curve for low-skilled workers ________ the demand curve for high-skilled workers.

Looking at wage differentials between white women and white men in the United States since 2000,we see that the amount of the difference

-The table above gives cumulative percent of income received by each 20 percent group of households.Label the figure below and then plot the Lorenz curves.In which nation is income more equally distributed?

Suppose a state charges an in-state student $2000 in tuition for a college education and charges an out-of -state student $10,000 in tuition.This differential

High-skilled workers earn more than low-skilled workers in part because the high-skilled workers have

One reason why economists earn more than Taco Bell workers is because economists have a ________ value of marginal product of labor than Taco Bell workers.

The larger the value of marginal product of a skill,the

At any wage rate,the quantity of welders willing to work is less than the quantity of tomato pickers.Why?

Looking at the income distribution in the United States since 1970,we see that

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

The distance between the supply curve of low-skilled labor and the supply curve of high-skilled labor is the .

The figure above shows the demand and supply curves for high-skilled (indicated by an "H" subscript) and low-skilled (indicated by an "L" subscript) workers. -In the figure above,the value of the marginal product of skill creates the difference between the curves and .

In the United States since 1970,the share of money income received by the richest 20 percent of households has and the share of income received by the lowest 20 percent of households has .