Question 1

What is "human capital"? How is it important in the determination of a worker's wage rate?

Accepted Answer

Human capital is the skill,education,and

Question 2

Describe the effect education and training have on outcomes in the labor market.

Accepted Answer

Education and training affect both the s

Question 3

In the United States,the richest 20 percent of households receive approximately ________ percent of total money income.

Accepted Answer

A)  33 
B)  12 
C)  50 
D)  75 
E)  20 
A)  33 
B)  12 
C)  50 
D)  75 
E)  20

Question 4

With a negative income tax that has a $10,000 guaranteed income and a 25 percent tax rate,a household that has a market income of $4,000 has a total income of

Accepted Answer

A)  $15,000. 
B)  $14,000. 
C)  $13,000. 
D)  $10,000. 
E)  $7,000. 
A)  $15,000. 
B)  $14,000. 
C)  $13,000. 
D)  $10,000. 
E)  $7,000.

Question 5

-The above table shows the distribution of income in two countries,Alpha and Beta.In Country Alpha,the poorest 20 percent receive ________ percent of total income.

Accepted Answer

A)  5 
B)  9 
C)  1 
D)  19 
E)  14 
A)  5 
B)  9 
C)  1 
D)  19 
E)  14

Question 6

A ________ has a constant tax rate regardless of the level of income.

Accepted Answer

A)  regressive tax 
B)  progressive tax 
C)  state tax 
D)  proportional tax 
E)  subsidy tax 
A)  regressive tax 
B)  progressive tax 
C)  state tax 
D)  proportional tax 
E)  subsidy tax

Question 7

-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 8

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 9

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 10

Which of the following statements is correct?

Accepted Answer

A)  Wealth inequality in the United States is greater than income inequality. 
B)  Income inequality in the United States is greater than wealth inequality. 
C)  Income includes all the things owned by a household at a certain point in time. 
D)  The top fifth of households have a greater share of the nation's income than the nation's wealth. 
E)  The fraction of wealth owned by the bottom 20 percent of households is larger than the fraction income earned by the bottom 20 percent of households. 
A)  Wealth inequality in the United States is greater than income inequality. 
B)  Income inequality in the United States is greater than wealth inequality. 
C)  Income includes all the things owned by a household at a certain point in time. 
D)  The top fifth of households have a greater share of the nation's income than the nation's wealth. 
E)  The fraction of wealth owned by the bottom 20 percent of households is larger than the fraction income earned by the bottom 20 percent of households.

Question 11

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 12

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 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

A Lorenz curve for income shows the

Accepted Answer

A)  demand for Lorenz cough drops. 
B)  average income graphed against the average number of people in the household. 
C)  cumulative percentage of income graphed against cumulative percentage of households. 
D)  relationship between income and wealth. 
E)  total amount of income graphed against the total number of households. 
A)  demand for Lorenz cough drops. 
B)  average income graphed against the average number of people in the household. 
C)  cumulative percentage of income graphed against cumulative percentage of households. 
D)  relationship between income and wealth. 
E)  total amount of income graphed against the total number of households.

Question 15

A tax is progressive if the average tax rate

Accepted Answer

A)  increases as income increases. 
B)  increases as income decreases. 
C)  is negative. 
D)  is positive. 
A)  increases as income increases. 
B)  increases as income decreases. 
C)  is negative. 
D)  is positive.

Question 16

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 17

If the income distribution is more unequal than the wealth distribution,then the

Accepted Answer

A)  Lorenz curve for income will be farther away from the line of equality than the Lorenz curve for wealth. 
B)  government has imposed a higher tax rate on income. 
C)  Lorenz curve for wealth will be farther away from the line of equality than the Lorenz curve for income. 
D)  Lorenz curve for wealth will lie above the Lorenz curve for income. 
E)  It is not possible to draw the Lorenz curve for wealth on the same figure with the Lorenz curve for income. 
A)  Lorenz curve for income will be farther away from the line of equality than the Lorenz curve for wealth. 
B)  government has imposed a higher tax rate on income. 
C)  Lorenz curve for wealth will be farther away from the line of equality than the Lorenz curve for income. 
D)  Lorenz curve for wealth will lie above the Lorenz curve for income. 
E)  It is not possible to draw the Lorenz curve for wealth on the same figure with the Lorenz curve for income.

Question 18

Pete just started a new job as an assembler and is earning a wage of $10 per hour.Sam,who is an experienced assembler assigned to train Pete,earns $15 per hour.The opportunity cost to Pete of acquiring this skill is

Accepted Answer

A)  $25 per hour. 
B)  $15 per hour. 
C)  $10 per hour. 
D)  $5 per hour. 
E)  $0 per hour because Pete is being paid a wage. 
A)  $25 per hour. 
B)  $15 per hour. 
C)  $10 per hour. 
D)  $5 per hour. 
E)  $0 per hour because Pete is being paid a wage.

Question 19

In the United States,the poorest 20 percent of households receive about ________ percent of total money income while the richest 20 percent receive about ________ percent of total money income.

Accepted Answer

A)  3; 50 
B)  8; 71 
C)  12.; 32 
D)  13; 68 
E)  20; 20 
A)  3; 50 
B)  8; 71 
C)  12.; 32 
D)  13; 68 
E)  20; 20

Question 20

Which of the following statements correctly describes how taxes redistribute income across different households in an economy?

Accepted Answer

A)  The richest 40 percent of households increase their share of income. 
B)  The poorest 60 percent of households increase their share of income. 
C)  Taxes have no effect on the distribution of income. 
D)  The poorest 20 percent of households receive 20 percent of their income from the government. 
E)  The richest 20 percent of households increase their share of income and the poorest 20 percent decrease their share of income. 
A)  The richest 40 percent of households increase their share of income. 
B)  The poorest 60 percent of households increase their share of income. 
C)  Taxes have no effect on the distribution of income. 
D)  The poorest 20 percent of households receive 20 percent of their income from the government. 
E)  The richest 20 percent of households increase their share of income and the poorest 20 percent decrease their share of income.

What is "human capital"? How is it important in the determination of a worker's wage rate?

Describe the effect education and training have on outcomes in the labor market.

In the United States,the richest 20 percent of households receive approximately ________ percent of total money income.

With a negative income tax that has a $10,000 guaranteed income and a 25 percent tax rate,a household that has a market income of $4,000 has a total income of

-The above table shows the distribution of income in two countries,Alpha and Beta.In Country Alpha,the poorest 20 percent receive ________ percent of total income.

A ________ has a constant tax rate regardless of the level of income.

-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?

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

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

Which of the following statements is correct?

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

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

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?

A Lorenz curve for income shows the

A tax is progressive if the average tax rate

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

If the income distribution is more unequal than the wealth distribution,then the

Pete just started a new job as an assembler and is earning a wage of $10 per hour.Sam,who is an experienced assembler assigned to train Pete,earns $15 per hour.The opportunity cost to Pete of acquiring this skill is

In the United States,the poorest 20 percent of households receive about percent of total money income while the richest 20 percent receive about percent of total money income.

Which of the following statements correctly describes how taxes redistribute income across different households in an economy?

Getting Started

The Usand 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

What is "human capital"? How is it important in the determination of a worker's wage rate?

Describe the effect education and training have on outcomes in the labor market.

In the United States,the richest 20 percent of households receive approximately ________ percent of total money income.

With a negative income tax that has a $10,000 guaranteed income and a 25 percent tax rate,a household that has a market income of $4,000 has a total income of

-The above table shows the distribution of income in two countries,Alpha and Beta.In Country Alpha,the poorest 20 percent receive ________ percent of total income.

A ________ has a constant tax rate regardless of the level of income.

-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?

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

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

Which of the following statements is correct?

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

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

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?

A Lorenz curve for income shows the

A tax is progressive if the average tax rate

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

If the income distribution is more unequal than the wealth distribution,then the

Pete just started a new job as an assembler and is earning a wage of $10 per hour.Sam,who is an experienced assembler assigned to train Pete,earns $15 per hour.The opportunity cost to Pete of acquiring this skill is

In the United States,the poorest 20 percent of households receive about ________ percent of total money income while the richest 20 percent receive about ________ percent of total money income.

Which of the following statements correctly describes how taxes redistribute income across different households in an economy?

Getting Started

The Usand 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

In the United States,the poorest 20 percent of households receive about percent of total money income while the richest 20 percent receive about percent of total money income.