Question 1

Of all the characteristics that lead to income inequality, the factor with the largest impact is

Accepted Answer

A) race. 
B) sex. 
C) age. 
D) education. 
E) location. 
A) race. 
B) sex. 
C) age. 
D) education. 
E) location.

Question 2

In the United States, do the poorest 20 percent of the households receive more or less than 5 percent of money income?

Accepted Answer

The poorest 20 perce

Question 3

Assume a negative income tax is set up with a 20 percent tax rate on market income and a guaranteed minimum income of $9,000.
a∙What is the amount of taxes a household with $23,000 of market income pays or the amount of taxes this household receives?
b∙What is the amount of taxes a household with $65,000 of market income pays or the amount of taxes this household receives?

Accepted Answer

a∙The taxes paid with market income of $

Question 4

Country A has a more equal distribution of income than country B if

Accepted Answer

A) country A's Lorenz curve is closer to the line of equality than is country B's Lorenz curve. 
B) country B's Lorenz curve is closer to the line of equality than is country A's Lorenz curve. 
C) country A's Lorenz curve is just as close to the line of equality as is country B's Lorenz curve. 
D) country A's Lorenz curve lies below country B's Lorenz curve at low levels of income and above it at high levels of income. 
E) None of the above because it is impossible to compare income inequalities across countries. 
A) country A's Lorenz curve is closer to the line of equality than is country B's Lorenz curve. 
B) country B's Lorenz curve is closer to the line of equality than is country A's Lorenz curve. 
C) country A's Lorenz curve is just as close to the line of equality as is country B's Lorenz curve. 
D) country A's Lorenz curve lies below country B's Lorenz curve at low levels of income and above it at high levels of income. 
E) None of the above because it is impossible to compare income inequalities across countries.

Question 5

The higher the cost of acquiring skills, the ________ are the high-skilled and low-skilled labor ________ curves.

Accepted Answer

A) closer together; demand 
B) farther apart; demand 
C) closer together; supply 
D) farther apart; supply 
A) closer together; demand 
B) farther apart; demand 
C) closer together; supply 
D) farther apart; supply

Question 6

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, if the value of the marginal product of skill increased, then the

Accepted Answer

A) SL curve shifts leftward. 
B) SH curve shifts leftward. 
C) DH curve shifts rightward. 
D) DH curve shifts leftward. 
E) DL curve shifts leftward. 
A) SL curve shifts leftward. 
B) SH curve shifts leftward. 
C) DH curve shifts rightward. 
D) DH curve shifts leftward. 
E) DL curve shifts leftward.

Question 7

Describe how a negative income tax works.

Accepted Answer

A negative income tax provides every hou

Question 8

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 9

The ________ the value of marginal product of skill, the ________.

Accepted Answer

A) smaller; larger is the wage differential between low-skilled workers and high-skilled workers 
B) larger; more elastic the supply curve of labor 
C) larger; larger is the wage differential between low-skilled workers and high-skilled workers 
D) smaller; less elastic the supply curve of labor 
E) smaller; larger is the cost of acquiring the skill 
A) smaller; larger is the wage differential between low-skilled workers and high-skilled workers 
B) larger; more elastic the supply curve of labor 
C) larger; larger is the wage differential between low-skilled workers and high-skilled workers 
D) smaller; less elastic the supply curve of labor 
E) smaller; larger is the cost of acquiring the skill

Question 10

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 11

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

Accepted Answer

The poverty rate is lowest amo

Question 12

If a firm is willing to pay a high-skilled worker $25 per hour and a low-skilled worker $10 per hour then the value of marginal product of skill is

Accepted Answer

A) $15. 
B) $40. 
C) $10. 
D) $25 
E) There is not enough information to answer this question. 
A) $15. 
B) $40. 
C) $10. 
D) $25 
E) There is not enough information to answer this question.

Question 13

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, if the cost of acquiring the skill decreased, then the

Accepted Answer

A) SL curve shifts leftward. 
B) SH curve shifts leftward. 
C) SH curve shifts rightward. 
D) DH curve shifts leftward. 
E) DL curve shifts leftward. 
A) SL curve shifts leftward. 
B) SH curve shifts leftward. 
C) SH curve shifts rightward. 
D) DH curve shifts leftward. 
E) DL curve shifts leftward.

Question 14

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 15

-What is "human capital" and why is it considered an investment?

Accepted Answer

Human capital is the accumulated skill a

Question 16

Increased discrimination results in ________ of the workers discriminated against being hired and being paid ________ wage rates.

Accepted Answer

A) more; higher 
B) more; lower 
C) fewer; higher 
D) fewer; lower 
E) the same number; lower 
A) more; higher 
B) more; lower 
C) fewer; higher 
D) fewer; lower 
E) the same number; lower

Question 17

________ is the single biggest factor affecting income distribution in the United States.

Accepted Answer

A) Location of household 
B) Type of household 
C) Education 
D) Age of household 
E) Gender 
A) Location of household 
B) Type of household 
C) Education 
D) Age of household 
E) Gender

Question 18

"If the distribution of income was equal, the Lorenz curve would be a straight, 45° line." Is the previous statement correct or incorrect?

Accepted Answer

The statem

Question 19

What are the three ways that the government redistributes income in the United States? Briefly discuss each.

Accepted Answer

The government redistributes income usin

Question 20

In the United States, the federal and state income tax system is

Accepted Answer

A) progressive. 
B) proportional. 
C) regressive. 
D) a flat-rate tax. 
E) None of the above answers is correct. 
A) progressive. 
B) proportional. 
C) regressive. 
D) a flat-rate tax. 
E) None of the above answers is correct.

Of all the characteristics that lead to income inequality, the factor with the largest impact is

In the United States, do the poorest 20 percent of the households receive more or less than 5 percent of money income?

Country A has a more equal distribution of income than country B if

The higher the cost of acquiring skills, the are the high-skilled and low-skilled labor curves.

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, if the value of the marginal product of skill increased, then the

Describe how a negative income tax works.

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

The the value of marginal product of skill, the .

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

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

If a firm is willing to pay a high-skilled worker $25 per hour and a low-skilled worker $10 per hour then the value of marginal product of skill 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, if the cost of acquiring the skill decreased, then the

Which of the following currently helps redistribute income in the United States? I∙negative income tax Ii∙progressive income taxes Iii∙Social Security

-What is "human capital" and why is it considered an investment?

Increased discrimination results in of the workers discriminated against being hired and being paid wage rates.

________ is the single biggest factor affecting income distribution in the United States.

"If the distribution of income was equal, the Lorenz curve would be a straight, 45° line." Is the previous statement correct or incorrect?

What are the three ways that the government redistributes income in the United States? Briefly discuss each.

In the United States, the federal and state income tax system is

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

Of all the characteristics that lead to income inequality, the factor with the largest impact is

In the United States, do the poorest 20 percent of the households receive more or less than 5 percent of money income?

Country A has a more equal distribution of income than country B if

The higher the cost of acquiring skills, the ________ are the high-skilled and low-skilled labor ________ curves.

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, if the value of the marginal product of skill increased, then the

Describe how a negative income tax works.

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

The ________ the value of marginal product of skill, the ________.

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

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

If a firm is willing to pay a high-skilled worker $25 per hour and a low-skilled worker $10 per hour then the value of marginal product of skill 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, if the cost of acquiring the skill decreased, then the

Which of the following currently helps redistribute income in the United States? I∙negative income tax Ii∙progressive income taxes Iii∙Social Security

-What is "human capital" and why is it considered an investment?

Increased discrimination results in ________ of the workers discriminated against being hired and being paid ________ wage rates.

________ is the single biggest factor affecting income distribution in the United States.

"If the distribution of income was equal, the Lorenz curve would be a straight, 45° line." Is the previous statement correct or incorrect?

What are the three ways that the government redistributes income in the United States? Briefly discuss each.

In the United States, the federal and state income tax system is

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 higher the cost of acquiring skills, the are the high-skilled and low-skilled labor curves.

The the value of marginal product of skill, the .

Increased discrimination results in of the workers discriminated against being hired and being paid wage rates.