Question 1

Customer discrimination against female realtors ________ the number of female realtors and ________ their perceived value of marginal product.

Accepted Answer

A) decreases; decreases 
B) decreases; increases 
C) increases; increases 
D) increases; decreases 
E) decreases; does not change 
A) decreases; decreases 
B) decreases; increases 
C) increases; increases 
D) increases; decreases 
E) decreases; does not change

Question 2

Use the figure below to answer the following questions.
   
Figure 19.3.2
-Refer to Figure 19.3.2. For the employer to hire 40 hours per week of both high-skilled and low-skilled labour,

Accepted Answer

A) high-skilled workers would have to earn a wage rate that is twice that of the low-skilled workers. 
B) high-skilled workers would have to earn a wage rate that is less than that of the low-skilled workers. 
C) high-skilled workers would have to earn a wage that is $2 more than the wage paid to low-skilled workers. 
D) low-skilled workers would have to earn a wage that is $2 more than the wage paid to high-skilled workers. 
E) high-skilled workers need to earn a wage that is between zero and $2 more than low-skilled workers. 
A) high-skilled workers would have to earn a wage rate that is twice that of the low-skilled workers. 
B) high-skilled workers would have to earn a wage rate that is less than that of the low-skilled workers. 
C) high-skilled workers would have to earn a wage that is $2 more than the wage paid to low-skilled workers. 
D) low-skilled workers would have to earn a wage that is $2 more than the wage paid to high-skilled workers. 
E) high-skilled workers need to earn a wage that is between zero and $2 more than low-skilled workers.

Question 3

A firm that discriminates has ________ a firm that does not discriminate and ________.

Accepted Answer

A) the same costs as; competes most often with firms from other countries 
B) the same costs as; can successfully maximize profit in a competitive industry 
C) lower costs than; drives other firms out of a competitive industry 
D) higher costs than; competes most often with firms from other countries 
E) higher costs than; cannot survive in a competitive industry 
A) the same costs as; competes most often with firms from other countries 
B) the same costs as; can successfully maximize profit in a competitive industry 
C) lower costs than; drives other firms out of a competitive industry 
D) higher costs than; competes most often with firms from other countries 
E) higher costs than; cannot survive in a competitive industry

Question 4

Use the figure below to answer the following questions.
   
Figure 19.1.2
-Refer only to the information in Figure 19.3.1. At any given wage rate,

Accepted Answer

A) more hours of low-skilled labour will be demanded than high-skilled labour. 
B) more hours of high-skilled labour will be demanded than low-skilled labour. 
C) more hours of low-skilled labour will be supplied than high-skilled labour. 
D) more hours of high-skilled labour will be supplied than low-skilled labour. 
E) both B and C are correct. 
A) more hours of low-skilled labour will be demanded than high-skilled labour. 
B) more hours of high-skilled labour will be demanded than low-skilled labour. 
C) more hours of low-skilled labour will be supplied than high-skilled labour. 
D) more hours of high-skilled labour will be supplied than low-skilled labour. 
E) both B and C are correct.

Question 5

Government transfer payments, such as welfare payments, redistribute income and

Accepted Answer

A) increase the incentive to work. 
B) improve economic efficiency. 
C) increase tax receipts. 
D) decrease the incentive to work. 
E) push the Lorenz curve further away from the line of equality. 
A) increase the incentive to work. 
B) improve economic efficiency. 
C) increase tax receipts. 
D) decrease the incentive to work. 
E) push the Lorenz curve further away from the line of equality.

Question 6

Use the figure below to answer the following questions.
   
Figure 19.1.2
-Consider the Lorenz curves in Figure 19.1.2. Which Lorenz curve corresponds to the greatest income inequality?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
E) impossible to tell without additional information 
A) A 
B) B 
C) C 
D) D 
E) impossible to tell without additional information

Question 7

The greater the value of marginal product of labour,

Accepted Answer

A) the greater is the supply of labour. 
B) the greater is the demand for labour. 
C) the greater is the marginal cost of production. 
D) the greater is unemployment. 
E) the lower is the wage rate. 
A) the greater is the supply of labour. 
B) the greater is the demand for labour. 
C) the greater is the marginal cost of production. 
D) the greater is unemployment. 
E) the lower is the wage rate.

Question 8

Total income equals

Accepted Answer

A) market income minus payments to firms by governments. 
B) market income plus cash payments to households by governments. 
C) the wages, interest, rent, and profit earned in factor markets before paying income taxes. 
D) the wages, interest, rent, and profit earned in factor markets after paying income taxes. 
E) market income minus cash payments to households by governments. 
A) market income minus payments to firms by governments. 
B) market income plus cash payments to households by governments. 
C) the wages, interest, rent, and profit earned in factor markets before paying income taxes. 
D) the wages, interest, rent, and profit earned in factor markets after paying income taxes. 
E) market income minus cash payments to households by governments.

Question 9

The larger the gap between the Lorenz curve and the line of equality,

Accepted Answer

A) the greater is the equality in the income distribution. 
B) the less is the inequality in the income distribution. 
C) the poorer are the top 50 percent of households. 
D) the richer are the lowest 50 percent of households. 
E) the greater is the inequality in the income distribution. 
A) the greater is the equality in the income distribution. 
B) the less is the inequality in the income distribution. 
C) the poorer are the top 50 percent of households. 
D) the richer are the lowest 50 percent of households. 
E) the greater is the inequality in the income distribution.

Question 10

An income Lorenz curve

Accepted Answer

A) graphs the cumulative percentage of income against the cumulative percentage of households. 
B) measures the income among households ranked from the poorest to the richest. 
C) measures the income among households ranked from the richest to the poorest. 
D) measures the factor prices earned by the rich compared with the poor. 
E) is a downward-sloping curve. 
A) graphs the cumulative percentage of income against the cumulative percentage of households. 
B) measures the income among households ranked from the poorest to the richest. 
C) measures the income among households ranked from the richest to the poorest. 
D) measures the factor prices earned by the rich compared with the poor. 
E) is a downward-sloping curve.

Question 11

The Gini ratio in Brazil was over 0.6 in 1990 and fell to 0.5 in 2010. This change means that between 1990 and 2010, income inequality ________ and the Lorenz curve moved ________ the 45-degree line.

Accepted Answer

A) decreased; closer to 
B) decreased; further away from 
C) increased; closer to 
D) increased; further away from 
E) increased; so that it was the same as 
A) decreased; closer to 
B) decreased; further away from 
C) increased; closer to 
D) increased; further away from 
E) increased; so that it was the same as

Question 12

Between 1970 and 2005, the world Gini ratio ________ indicating ________ in the world distribution of income.

Accepted Answer

A) fell; greater equality 
B) fell; greater inequality 
C) did not change; no change 
D) rose; greater equality 
E) rose; greater inequality 
A) fell; greater equality 
B) fell; greater inequality 
C) did not change; no change 
D) rose; greater equality 
E) rose; greater inequality

Question 13

In 2011, what percentage of households received the mode income in Canada?

Accepted Answer

A) 5 percent 
B) 6 percent 
C) 7 percent 
D) 17.4 percent 
E) 20 percent 
A) 5 percent 
B) 6 percent 
C) 7 percent 
D) 17.4 percent 
E) 20 percent

Question 14

If the area between the line of equality and the Lorenz curve is 1,250 and the entire area beneath the line of equality is 5,000, the Gini ratio is

Accepted Answer

A) 1,250. 
B) 0.80. 
C) 0.25. 
D) 0.33. 
E) 4.00. 
A) 1,250. 
B) 0.80. 
C) 0.25. 
D) 0.33. 
E) 4.00.

Question 15

Use the figure below to answer the following questions.
   
Figure 19.3.5
-Refer to Figure 19.3.5. This figure shows the labour supply curves and the value of marginal product curves for high-skilled and low-skilled workers. If there is an increase in the supply of high-skilled workers and the supply of high-skilled workers is now equal to the supply of low-skilled workers, then employment of high-skilled labour would

Accepted Answer

A) remain the same. 
B) decrease. 
C) increase to 40 hours per week. 
D) increase to 50 hours per week. 
E) none of the above 
A) remain the same. 
B) decrease. 
C) increase to 40 hours per week. 
D) increase to 50 hours per week. 
E) none of the above

Question 16

After-tax income equals

Accepted Answer

A) total income minus tax payments by households to governments. 
B) total income minus tax payments by households to firms. 
C) total income plus tax payments by households to governments. 
D) market income plus cash payments to households by governments. 
E) market income minus tax payments by households to governments. 
A) total income minus tax payments by households to governments. 
B) total income minus tax payments by households to firms. 
C) total income plus tax payments by households to governments. 
D) market income plus cash payments to households by governments. 
E) market income minus tax payments by households to governments.

Question 17

Use the figure below to answer the following questions.
   
Figure 19.3.5
-Refer to Figure 19.3.5. This figure shows the labour supply curves and the value of marginal product curves for high-skilled and low-skilled workers. The equilibrium wage rate for low-skilled workers is

Accepted Answer

A) $3 an hour. 
B) $7 an hour. 
C) $6 an hour. 
D) $5 an hour. 
E) $4 an hour. 
A) $3 an hour. 
B) $7 an hour. 
C) $6 an hour. 
D) $5 an hour. 
E) $4 an hour.

Question 18

Use the figure below to answer the following questions.
   
Figure 19.1.2
-Refer to Figure 19.1.2. What is curve A called?

Accepted Answer

A) market distribution line 
B) line of equality 
C) fairness line 
D) low-income cut-off line 
E) after-tax income 
A) market distribution line 
B) line of equality 
C) fairness line 
D) low-income cut-off line 
E) after-tax income

Question 19

In 2011, the poorest 20 percent of households received what percentage of the nation's after-tax income?

Accepted Answer

A) 10.6 percent 
B) 4.8 percent 
C) 24.1 percent 
D) 16.3 percent 
E) 17.4 percent 
A) 10.6 percent 
B) 4.8 percent 
C) 24.1 percent 
D) 16.3 percent 
E) 17.4 percent

Question 20

Policies that result in a redistribution of income toward the poor include all of the following except

Accepted Answer

A) public provision of elementary education. 
B) public provision of high school education. 
C) public provision of health-care services. 
D) public excise taxes. 
E) public provision of subsidized university education. 
A) public provision of elementary education. 
B) public provision of high school education. 
C) public provision of health-care services. 
D) public excise taxes. 
E) public provision of subsidized university education.

Exam 19: Economic Inequality

Customer discrimination against female realtors ________ the number of female realtors and ________ their perceived value of marginal product.

Use the figure below to answer the following questions. Figure 19.3.2 -Refer to Figure 19.3.2. For the employer to hire 40 hours per week of both high-skilled and low-skilled labour,

A firm that discriminates has ________ a firm that does not discriminate and ________.

Use the figure below to answer the following questions. Figure 19.1.2 -Refer only to the information in Figure 19.3.1. At any given wage rate,

Government transfer payments, such as welfare payments, redistribute income and

Use the figure below to answer the following questions. Figure 19.1.2 -Consider the Lorenz curves in Figure 19.1.2. Which Lorenz curve corresponds to the greatest income inequality?

The greater the value of marginal product of labour,

Total income equals

The larger the gap between the Lorenz curve and the line of equality,

An income Lorenz curve

The Gini ratio in Brazil was over 0.6 in 1990 and fell to 0.5 in 2010. This change means that between 1990 and 2010, income inequality ________ and the Lorenz curve moved ________ the 45-degree line.

Between 1970 and 2005, the world Gini ratio ________ indicating ________ in the world distribution of income.

In 2011, what percentage of households received the mode income in Canada?

If the area between the line of equality and the Lorenz curve is 1,250 and the entire area beneath the line of equality is 5,000, the Gini ratio is

After-tax income equals

Use the figure below to answer the following questions. Figure 19.3.5 -Refer to Figure 19.3.5. This figure shows the labour supply curves and the value of marginal product curves for high-skilled and low-skilled workers. The equilibrium wage rate for low-skilled workers is

Use the figure below to answer the following questions. Figure 19.1.2 -Refer to Figure 19.1.2. What is curve A called?

In 2011, the poorest 20 percent of households received what percentage of the nation's after-tax income?

Policies that result in a redistribution of income toward the poor include all of the following except

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Customer discrimination against female realtors the number of female realtors and their perceived value of marginal product.

A firm that discriminates has a firm that does not discriminate and .

The Gini ratio in Brazil was over 0.6 in 1990 and fell to 0.5 in 2010. This change means that between 1990 and 2010, income inequality and the Lorenz curve moved the 45-degree line.

Between 1970 and 2005, the world Gini ratio indicating in the world distribution of income.