Exam 20: Economic Inequality

The above table shows the distribution of income in two imaginary countries, Alpha and Beta. a∙In the figure below, draw the Lorenz curves for Alpha and Beta. b∙Compare the distribution of income in Alpha with that in Beta.Which distribution is more unequal? c∙What would be the distribution of income in a country with perfect income equality?

________ is a component of welfare programs.

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

-The above table shows the distribution of income in two imaginary countries, Alpha and Beta. a∙What does the table tell you about the second 20 percent group in each country? b∙Calculate the cumulative percentage for both countries. c∙Interpret the cumulative percentage for the third 20 percent group in both countries.

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

A negative income tax

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 ________.

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

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

-The table above gives the average income received by each 20 percent group of households.Complete the table by finding the percentage of income earned by each group and the cumulative percentage of income.Label the figure below and then plot the Lorenz curve.

The gap between the salary of Tom Cruise and an unknown actor is over $15 million per movie.This difference means that Mr.Cruise's value of marginal product is

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 ________.

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

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

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

-The above table shows the distribution of income in two countries, Alpha and Beta.In Country Beta, the richest 40 percent of households receive ________ percent of total income.

The rates of return on high school and college educations have

Looking at the Lorenz curves for income distribution in all the world's nations, we would find that

Discrimination by customers creates a wage differential between two groups by creating a difference in the two groups'

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.