Question 1

Looking at the results of government income redistribution programs,we find that the income received by the

Accepted Answer

A)  lowest 20 percent of households is almost unchanged because most don't work. 
B)  highest 20 percent is left unaffected because they are able to shelter income from taxes. 
C)  lowest 20 percent increases and the income received by the highest 20 percent decreases. 
D)  lowest 20 percent increases somewhat but the income received by the next 20 percent increases the most. 
E)  lowest 20 percent decreases because of government taxes and the income received by the highest 20 percent increases because of government subsidies. 
A)  lowest 20 percent of households is almost unchanged because most don't work. 
B)  highest 20 percent is left unaffected because they are able to shelter income from taxes. 
C)  lowest 20 percent increases and the income received by the highest 20 percent decreases. 
D)  lowest 20 percent increases somewhat but the income received by the next 20 percent increases the most. 
E)  lowest 20 percent decreases because of government taxes and the income received by the highest 20 percent increases because of government subsidies.

Question 2

In the United States in 2010,the Census Bureau determined that approximately ________ million Americans lived in households that had incomes below the poverty line.

Accepted Answer

A)  46 
B)  22 
C)  84 
D)  11 
E)  112 
A)  46 
B)  22 
C)  84 
D)  11 
E)  112

Question 3

With a negative income tax that has a $10,000 guaranteed minimum income and a 25 percent tax rate,a household that has earned income of $16,000 has a total income of

Accepted Answer

A)  $16,000. 
B)  $22,000. 
C)  $26,000. 
D)  $24,000. 
E)  $10,000. 
A)  $16,000. 
B)  $22,000. 
C)  $26,000. 
D)  $24,000. 
E)  $10,000.

Question 4

Describe how a negative income tax works.

Accepted Answer

A negative income tax provides every hou

Question 5

A Lorenz curve

Accepted Answer

A)  is identical to the straight line sloping up at a 45° angle. 
B)  lies above the straight line sloping up at a 45° angle. 
C)  lies below the straight line sloping up at a 45° angle. 
D)  starts below the straight line sloping up at a 45° angle and then ends above this line. 
E)  starts above the straight line sloping up at a 45° angle and then ends below this line. 
A)  is identical to the straight line sloping up at a 45° angle. 
B)  lies above the straight line sloping up at a 45° angle. 
C)  lies below the straight line sloping up at a 45° angle. 
D)  starts below the straight line sloping up at a 45° angle and then ends above this line. 
E)  starts above the straight line sloping up at a 45° angle and then ends below this line.

Question 6

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 7

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 8

As a tool that is used to measure inequality in the distribution of income,the Lorenz curve graphs

Accepted Answer

A)  the cumulative percentage of money income against the cumulative percentage of households. 
B)  the percentage of total money income received by each given percentage of households. 
C)  the mean income, median income, and mode income against the percentage of households. 
D)  the mean money income received by households over time. 
E)  the cumulative percentage of money income against the mean and median money income. 
A)  the cumulative percentage of money income against the cumulative percentage of households. 
B)  the percentage of total money income received by each given percentage of households. 
C)  the mean income, median income, and mode income against the percentage of households. 
D)  the mean money income received by households over time. 
E)  the cumulative percentage of money income against the mean and median money income.

Question 9

Which of the following is true? At a given quantity of employment,if the
i.value of marginal product of a high-skill worker is $35 and the value of marginal product of a low-skill worker is $10,the value of marginal product of the skill is $25.
ii.value of marginal product of a high-skill worker is $35 and the value of marginal product of a low-skill worker is $10,the cost of acquiring the skill is $25.
iii.value of marginal product of a skill is $25,then the wage rate must be $25.

Accepted Answer

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

Question 10

How does the supply curve of high-skilled workers compare to the supply curve of low-skilled workers?

Accepted Answer

A)  Because skills are costly to acquire, at a given wage rate the quantity supplied of high-skilled workers is greater than that of low-skilled workers. 
B)  Because skills are costly to acquire, at any given wage rate the quantity supplied of high-skilled workers is less than that of low-skilled workers. 
C)  Because skills are inexpensive to acquire, at any given wage rate the quantity supplied of high-skilled workers is less than that of low-skilled workers. 
D)  Because skills are inexpensive to acquire, at any given wage rate the quantity supplied of high-skilled workers is greater than that of low-skilled workers. 
E)  None of the above answers is correct. 
A)  Because skills are costly to acquire, at a given wage rate the quantity supplied of high-skilled workers is greater than that of low-skilled workers. 
B)  Because skills are costly to acquire, at any given wage rate the quantity supplied of high-skilled workers is less than that of low-skilled workers. 
C)  Because skills are inexpensive to acquire, at any given wage rate the quantity supplied of high-skilled workers is less than that of low-skilled workers. 
D)  Because skills are inexpensive to acquire, at any given wage rate the quantity supplied of high-skilled workers is greater than that of low-skilled workers. 
E)  None of the above answers is correct.

Question 11

Fully explain why it is a good idea for young people who are considering dropping out of high school to stay in school if the U.S.government pursues more liberal immigration policies over the next 20 years.

Accepted Answer

Over the past several years,the number o

Question 12

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 13

Comparing the wealth and income distribution in the United States,we see that

Accepted Answer

A)  wealth is distributed less equally than income. 
B)  because wealth and income are different terms for the same thing, the distributions are the same. 
C)  income is distributed less equally than wealth. 
D)  we cannot compare the distribution of wealth and income. 
E)  None of the above answers is correct. 
A)  wealth is distributed less equally than income. 
B)  because wealth and income are different terms for the same thing, the distributions are the same. 
C)  income is distributed less equally than wealth. 
D)  we cannot compare the distribution of wealth and income. 
E)  None of the above answers is correct.

Question 14

Lorenz curves are

Accepted Answer

A)  horizontal. 
B)  vertical. 
C)  upward sloping. 
D)  downward sloping. 
E)  straight lines. 
A)  horizontal. 
B)  vertical. 
C)  upward sloping. 
D)  downward sloping. 
E)  straight lines.

Question 15

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 compensation for the cost of acquiring the skill creates the difference between the ________ curves and ________.

Accepted Answer

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

Question 16

Suppose the government implements a negative income tax with a minimum guaranteed income of $20,000 and a tax rate of 30 percent on market income.
a.What amount of tax would be paid by a household with no market income?
b.What amount of tax would be paid by a household earning $100,000 of market income?

Accepted Answer

a.A household with no market income woul

Question 17

How does the demand for high-skilled workers compare to the demand for low-skilled workers? Why does this difference exist?

Accepted Answer

The demand for high-skilled workers exce

Question 18

Which of the following is correct about the United States?

Accepted Answer

A)  Income is equally distributed. 
B)  Wealth is equally distributed. 
C)  Income is equally distributed but wealth is unequally distributed because of inheritances. 
D)  Both wealth and income are unequally distributed. 
E)  Both wealth and income are equally distributed. 
A)  Income is equally distributed. 
B)  Wealth is equally distributed. 
C)  Income is equally distributed but wealth is unequally distributed because of inheritances. 
D)  Both wealth and income are unequally distributed. 
E)  Both wealth and income are equally distributed.

Question 19

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 20

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

Looking at the results of government income redistribution programs,we find that the income received by the

In the United States in 2010,the Census Bureau determined that approximately ________ million Americans lived in households that had incomes below the poverty line.

With a negative income tax that has a $10,000 guaranteed minimum income and a 25 percent tax rate,a household that has earned income of $16,000 has a total income of

Describe how a negative income tax works.

A Lorenz curve

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.

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

As a tool that is used to measure inequality in the distribution of income,the Lorenz curve graphs

How does the supply curve of high-skilled workers compare to the supply curve of low-skilled workers?

Fully explain why it is a good idea for young people who are considering dropping out of high school to stay in school if the U.S.government pursues more liberal immigration policies over the next 20 years.

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

Comparing the wealth and income distribution in the United States,we see that

Lorenz curves are

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 compensation for the cost of acquiring the skill creates the difference between the curves and .

How does the demand for high-skilled workers compare to the demand for low-skilled workers? Why does this difference exist?

Which of the following is correct about the United States?

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

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

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

Looking at the results of government income redistribution programs,we find that the income received by the

In the United States in 2010,the Census Bureau determined that approximately ________ million Americans lived in households that had incomes below the poverty line.

With a negative income tax that has a $10,000 guaranteed minimum income and a 25 percent tax rate,a household that has earned income of $16,000 has a total income of

Describe how a negative income tax works.

A Lorenz curve

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.

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

As a tool that is used to measure inequality in the distribution of income,the Lorenz curve graphs

How does the supply curve of high-skilled workers compare to the supply curve of low-skilled workers?

Fully explain why it is a good idea for young people who are considering dropping out of high school to stay in school if the U.S.government pursues more liberal immigration policies over the next 20 years.

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

Comparing the wealth and income distribution in the United States,we see that

Lorenz curves are

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 compensation for the cost of acquiring the skill creates the difference between the ________ curves and ________.

How does the demand for high-skilled workers compare to the demand for low-skilled workers? Why does this difference exist?

Which of the following is correct about the United States?

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

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

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

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.

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 compensation for the cost of acquiring the skill creates the difference between the curves and .