Question 1

Which is distributed more equally: income or wealth?

Accepted Answer

The income distribution is much more equ

Question 2

In the United States in 2010,a family of four was considered to be living below the poverty line only if its household income was less than approximately

Accepted Answer

A)  $400 per year. 
B)  $4,000 per year. 
C)  $11,900 per year. 
D)  $22,800 per year. 
E)  $35,800 per year. 
A)  $400 per year. 
B)  $4,000 per year. 
C)  $11,900 per year. 
D)  $22,800 per year. 
E)  $35,800 per year.

Question 3

Which of the following characterizes the negative income tax concept?

Accepted Answer

A)  It is a flat tax that lower-income households do not pay. 
B)  It is a progressive tax structure with enough deductions to provide refunds to some. 
C)  It is a regressive tax with low-income earners getting a refund back when taxes are filed. 
D)  It is a guaranteed annual income with earned incomes taxed at a flat rate. 
E)  It is an income tax that eliminates all the inefficiency that occurs with the current tax system. 
A)  It is a flat tax that lower-income households do not pay. 
B)  It is a progressive tax structure with enough deductions to provide refunds to some. 
C)  It is a regressive tax with low-income earners getting a refund back when taxes are filed. 
D)  It is a guaranteed annual income with earned incomes taxed at a flat rate. 
E)  It is an income tax that eliminates all the inefficiency that occurs with the current tax system.

Question 4

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 5

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.

Question 6

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 7

If buyers discriminate against women and minorities,
i.the value of marginal product of women and minorities is less than otherwise.
ii.the wage rate paid to women and minorities is less than otherwise.
iii.more women and minorities are hired than otherwise.

Accepted Answer

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

Question 8

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 9

Is the poverty rate the lowest among Hispanic households,black households,or white households?

Accepted Answer

The poverty rate is lowest amo

Question 10

Which type of household has the lowest poverty rate?

Accepted Answer

A)  black 
B)  Hispanic 
C)  white 
D)  White and Hispanic are almost tied. 
E)  White and black are almost tied. 
A)  black 
B)  Hispanic 
C)  white 
D)  White and Hispanic are almost tied. 
E)  White and black are almost tied.

Question 11

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 12

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 13

The demand curve for high-skilled workers lies ________ the demand curve for low-skilled workers and the supply curve of high-skilled workers lies ________ the supply curve of low-skilled workers.

Accepted Answer

A)  above; above 
B)  above; below 
C)  below; above 
D)  below; below 
E)  above; on 
A)  above; above 
B)  above; below 
C)  below; above 
D)  below; below 
E)  above; on

Question 14

Differences in skills
i.can arise partly from differences in education and/or partly from differences in on-the-job training.
ii.can lead to large differences in earnings.
iii.result in different demand curves for high-skilled and low-skilled labor.

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 15

The figure above shows Lorenz curves for a nation.
-Based on the figure above,

Accepted Answer

A)  the average household's income exceeds its wealth. 
B)  the average household's wealth exceeds its income. 
C)  income is distributed more equally than wealth. 
D)  wealth is distributed more equally than income. 
E)  Both answers A and C are correct. 
A)  the average household's income exceeds its wealth. 
B)  the average household's wealth exceeds its income. 
C)  income is distributed more equally than wealth. 
D)  wealth is distributed more equally than income. 
E)  Both answers A and C are correct.

Question 16

What determines the position of the supply curve of high-skilled workers relative to that of low-skilled workers?

Accepted Answer

A)  the cost of acquiring the skill 
B)  the difference in the demand curves for the two groups 
C)  Bureau of Labor Standard guidelines 
D)  the difference in the value of the marginal products 
E)  None of the above answers is correct. 
A)  the cost of acquiring the skill 
B)  the difference in the demand curves for the two groups 
C)  Bureau of Labor Standard guidelines 
D)  the difference in the value of the marginal products 
E)  None of the above answers is correct.

Question 17

Which of the following currently helps redistribute income in the United States?
i.negative income tax
ii.progressive income taxes
iii.Social Security

Accepted Answer

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

Question 18

The inequality of annual income

Accepted Answer

A)  overstates the amount of lifetime inequality. 
B)  understates the amount of lifetime inequality. 
C)  cannot change from one year to the next. 
D)  is about the same as the amount of lifetime inequality. 
E)  cannot be compared to the amount of lifetime inequality. 
A)  overstates the amount of lifetime inequality. 
B)  understates the amount of lifetime inequality. 
C)  cannot change from one year to the next. 
D)  is about the same as the amount of lifetime inequality. 
E)  cannot be compared to the amount of lifetime inequality.

Question 19

If all households in a nation receive the same income,the nation's Lorenz curve

Accepted Answer

A)  is horizontal. 
B)  is vertical. 
C)  is a 45° line. 
D)  runs along the horizontal axis until it reaches 50 percent of households and then runs vertically up to 100 percent of income. 
E)  runs along the horizontal axis until it reaches 100 percent of households and then runs vertically up to 100 percent of income. 
A)  is horizontal. 
B)  is vertical. 
C)  is a 45° line. 
D)  runs along the horizontal axis until it reaches 50 percent of households and then runs vertically up to 100 percent of income. 
E)  runs along the horizontal axis until it reaches 100 percent of households and then runs vertically up to 100 percent of income.

Question 20

The three main ways that governments in the United States redistribute income are

Accepted Answer

A)  using the rule of law, subsidized services, and income taxes. 
B)  private property rights, income taxes and the minimum wage. 
C)  income taxes, income maintenance programs, and subsidized services. 
D)  income taxes, rent control, and food stamps. 
E)  sales taxes, food stamps, and subsidized services. 
A)  using the rule of law, subsidized services, and income taxes. 
B)  private property rights, income taxes and the minimum wage. 
C)  income taxes, income maintenance programs, and subsidized services. 
D)  income taxes, rent control, and food stamps. 
E)  sales taxes, food stamps, and subsidized services.

Which is distributed more equally: income or wealth?

In the United States in 2010,a family of four was considered to be living below the poverty line only if its household income was less than approximately

Which of the following characterizes the negative income tax concept?

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 .

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

The demand curve for high-skilled workers

If buyers discriminate against women and minorities, i.the value of marginal product of women and minorities is less than otherwise. ii.the wage rate paid to women and minorities is less than otherwise. iii.more women and minorities are hired than otherwise.

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

Is the poverty rate the lowest among Hispanic households,black households,or white households?

Which type of household has the lowest poverty rate?

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.

The demand curve for high-skilled workers lies the demand curve for low-skilled workers and the supply curve of high-skilled workers lies the supply curve of low-skilled workers.

Differences in skills i.can arise partly from differences in education and/or partly from differences in on-the-job training. ii.can lead to large differences in earnings. iii.result in different demand curves for high-skilled and low-skilled labor.

The figure above shows Lorenz curves for a nation. -Based on the figure above,

What determines the position of the supply curve of high-skilled workers relative to that of low-skilled workers?

Which of the following currently helps redistribute income in the United States? i.negative income tax ii.progressive income taxes iii.Social Security

The inequality of annual income

If all households in a nation receive the same income,the nation's Lorenz curve

The three main ways that governments in the United States redistribute income are

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

Which is distributed more equally: income or wealth?

In the United States in 2010,a family of four was considered to be living below the poverty line only if its household income was less than approximately

Which of the following characterizes the negative income tax concept?

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 ________.

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

The demand curve for high-skilled workers

If buyers discriminate against women and minorities, i.the value of marginal product of women and minorities is less than otherwise. ii.the wage rate paid to women and minorities is less than otherwise. iii.more women and minorities are hired than otherwise.

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

Is the poverty rate the lowest among Hispanic households,black households,or white households?

Which type of household has the lowest poverty rate?

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.

The demand curve for high-skilled workers lies ________ the demand curve for low-skilled workers and the supply curve of high-skilled workers lies ________ the supply curve of low-skilled workers.

Differences in skills i.can arise partly from differences in education and/or partly from differences in on-the-job training. ii.can lead to large differences in earnings. iii.result in different demand curves for high-skilled and low-skilled labor.

The figure above shows Lorenz curves for a nation. -Based on the figure above,

What determines the position of the supply curve of high-skilled workers relative to that of low-skilled workers?

Which of the following currently helps redistribute income in the United States? i.negative income tax ii.progressive income taxes iii.Social Security

The inequality of annual income

If all households in a nation receive the same income,the nation's Lorenz curve

The three main ways that governments in the United States redistribute income are

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

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 .

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 curve for high-skilled workers lies the demand curve for low-skilled workers and the supply curve of high-skilled workers lies the supply curve of low-skilled workers.