Question 1

If a Lorenz curve moves leftward and becomes closer to the line of equality over time, then

Accepted Answer

A)  the population is growing. 
B)  income is growing. 
C)  income is being more equally distributed. 
D)  income is being more unequally distributed. 
A)  the population is growing. 
B)  income is growing. 
C)  income is being more equally distributed. 
D)  income is being more unequally distributed.

Question 2

Unemployment compensation is an example of

Accepted Answer

A)  a subsidized service. 
B)  a regressive income program. 
C)  a Social Security benefit. 
D)  an income maintenance program. 
A)  a subsidized service. 
B)  a regressive income program. 
C)  a Social Security benefit. 
D)  an income maintenance program.

Question 3

-In the figure above, the curve going through point A represents

Accepted Answer

A)  an upward-sloping demand curve. 
B)  the line of equality. 
C)  the wage curve. 
D)  the Lorenz curve. 
A)  an upward-sloping demand curve. 
B)  the line of equality. 
C)  the wage curve. 
D)  the Lorenz curve.

Question 4

-In the figure above, the Lorenz curve that shows the richest 20 percent of households receiving 40 percent of all income is

Accepted Answer

A)  curve A. 
B)  curve B. 
C)  curve C. 
D)  curve D. 
A)  curve A. 
B)  curve B. 
C)  curve C. 
D)  curve D.

Question 5

If customer discrimination does not exist, firms that discriminate on the basis of race or sex will

Accepted Answer

A)  have higher costs than those that do not. 
B)  have the same level of costs as those that do not. 
C)  have lower costs than those that do not. 
D)  tend to survive whereas firms that do not discriminate will tend to fail. 
A)  have higher costs than those that do not. 
B)  have the same level of costs as those that do not. 
C)  have lower costs than those that do not. 
D)  tend to survive whereas firms that do not discriminate will tend to fail.

Question 6

-The figure above shows the demand for and supply of low-skilled labor. High-skilled workers have twice the marginal product of low-skilled workers. The cost of acquiring the skill adds $5 an hour to the wage that must be offered to attract high-skilled labor at each employment level.
a) What is the equilibrium wage rate of low-skilled labor and the equilibrium quantity of low-skilled labor employed?
b) Draw and explain the demand curve for high-skilled labor.
c) Draw and explain the supply curve of high-skilled labor.
d) What is the equilibrium wage rate of high-skilled labor and the equilibrium quantity of high-skilled labor employed?

Accepted Answer

@#IMG-DLM& a) The figure above shows the supply of

Question 7

An income tax in which the average tax rate increases with income is called a

Accepted Answer

A)  regressive income tax. 
B)  proportional income tax. 
C)  flat-rate income tax. 
D)  progressive income tax. 
A)  regressive income tax. 
B)  proportional income tax. 
C)  flat-rate income tax. 
D)  progressive income tax.

Question 8

A worker pays a tax for Social Security at a constant rate up until a certain level of income is reached. Beyond that income level, no more Social Security tax is paid. The Social Security tax is an example of a

Accepted Answer

A)  progressive tax. 
B)  regressive tax. 
C)  proportional tax. 
D)  sales tax. 
A)  progressive tax. 
B)  regressive tax. 
C)  proportional tax. 
D)  sales tax.

Question 9

The biggest single factor affecting household income is the householder's age.

Accepted Answer

A) True 
 B)False

Question 10

In recent years, average household income in the United States was highest for households headed by someone aged

Accepted Answer

A)  35 to 44. 
B)  45 to 54. 
C)  55 to 64. 
D)  65 and over. 
A)  35 to 44. 
B)  45 to 54. 
C)  55 to 64. 
D)  65 and over.

Question 11

Because of their higher value of marginal product

Accepted Answer

A)  the demand curve for high-skilled workers lies to the right of the demand curve for low-skilled workers. 
B)  the demand curve for high-skilled workers lies to the left of the demand curve for low-skilled workers. 
C)  the supply curve for high-skilled workers lies to the right of the supply curve for low-skilled workers. 
D)  the demand curve for high-skilled workers lies to the left of the supply curve for low-skilled workers. 
A)  the demand curve for high-skilled workers lies to the right of the demand curve for low-skilled workers. 
B)  the demand curve for high-skilled workers lies to the left of the demand curve for low-skilled workers. 
C)  the supply curve for high-skilled workers lies to the right of the supply curve for low-skilled workers. 
D)  the demand curve for high-skilled workers lies to the left of the supply curve for low-skilled workers.

Question 12

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

Accepted Answer

A)  increased; closer to 
B)  increased; further away from 
C)  decreased; closer to 
D)  decreased; further away from 
A)  increased; closer to 
B)  increased; further away from 
C)  decreased; closer to 
D)  decreased; further away from

Question 13

-The above table shows the distribution of wealth and income in Miseria. The Lorenz curve for wealth would

Accepted Answer

A)  intersect the horizontal axis at 100 percent. 
B)  bow outward more to the right than does the Lorenz curve for income. 
C)  lie parallel to the line of equality. 
D)  become flatter as one moves from left to right. 
A)  intersect the horizontal axis at 100 percent. 
B)  bow outward more to the right than does the Lorenz curve for income. 
C)  lie parallel to the line of equality. 
D)  become flatter as one moves from left to right.

Question 14

The distribution of income in the United States became more unequal in the 1990s. One explanation for this trend is that advances in information technologies have ________ low-skilled labor and ________ high-skilled labor.

Accepted Answer

A)  decreased the demand for; increased the demand for 
B)  increased the demand for; decreased the demand for 
C)  decreased the supply of; increased the supply of 
D)  increased the supply of; decreased the supply of 
A)  decreased the demand for; increased the demand for 
B)  increased the demand for; decreased the demand for 
C)  decreased the supply of; increased the supply of 
D)  increased the supply of; decreased the supply of

Question 15

Which of the following taxes causes the greatest shift of the Lorenz curve toward the line of equality?

Accepted Answer

A)  proportional income tax 
B)  regressive income tax 
C)  flat-rate income tax 
D)  progressive income tax 
A)  proportional income tax 
B)  regressive income tax 
C)  flat-rate income tax 
D)  progressive income tax

Question 16

Since 1970, the distribution of income in the United States

Accepted Answer

A)  generally has become more equal. 
B)  generally has become less equal. 
C)  has become more equal than the distribution of wealth. 
D)  has shown no discernible trend. 
A)  generally has become more equal. 
B)  generally has become less equal. 
C)  has become more equal than the distribution of wealth. 
D)  has shown no discernible trend.

Question 17

Regressive income taxes are

Accepted Answer

A)  an important form of income redistribution. 
B)  present when the average tax rate decreases as income decreases. 
C)  present when the average tax rate decreases as income increases. 
D)  Both answers A and B are correct. 
A)  an important form of income redistribution. 
B)  present when the average tax rate decreases as income decreases. 
C)  present when the average tax rate decreases as income increases. 
D)  Both answers A and B are correct.

Question 18

There is discrimination in the labor market on the planet of Yerk between two groups of people, the Mirks and the Morks. If the discrimination is against the Mirks, then the VMP curve for Mirks is ________ the VMP curve for Morks, and the Mirks receive ________ than the Morks.

Accepted Answer

A)  to the left of; the same wage rate, but fewer are employed 
B)  to the right of; the same wage rate, but fewer are employed 
C)  to the left of; a lower wage rate 
D)  to the right of; a lower wage rate 
A)  to the left of; the same wage rate, but fewer are employed 
B)  to the right of; the same wage rate, but fewer are employed 
C)  to the left of; a lower wage rate 
D)  to the right of; a lower wage rate

Question 19

The distribution of wealth is skewed in part because people with high wealth

Accepted Answer

A)  save very little. 
B)  tend to marry people with similar wealth. 
C)  have very little skills. 
D)  do not earn much more than those with low incomes. 
A)  save very little. 
B)  tend to marry people with similar wealth. 
C)  have very little skills. 
D)  do not earn much more than those with low incomes.

Question 20

-In the figure above, the poorest 20 percent of households receive ________ of total income.

Accepted Answer

A)  20 percent 
B)  10 percent 
C)  5 percent 
D)  15 percent 
A)  20 percent 
B)  10 percent 
C)  5 percent 
D)  15 percent

If a Lorenz curve moves leftward and becomes closer to the line of equality over time, then

Unemployment compensation is an example of

-In the figure above, the curve going through point A represents

-In the figure above, the Lorenz curve that shows the richest 20 percent of households receiving 40 percent of all income is

If customer discrimination does not exist, firms that discriminate on the basis of race or sex will

An income tax in which the average tax rate increases with income is called a

A worker pays a tax for Social Security at a constant rate up until a certain level of income is reached. Beyond that income level, no more Social Security tax is paid. The Social Security tax is an example of a

The biggest single factor affecting household income is the householder's age.

In recent years, average household income in the United States was highest for households headed by someone aged

Because of their higher value of marginal product

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

-The above table shows the distribution of wealth and income in Miseria. The Lorenz curve for wealth would

The distribution of income in the United States became more unequal in the 1990s. One explanation for this trend is that advances in information technologies have low-skilled labor and high-skilled labor.

Which of the following taxes causes the greatest shift of the Lorenz curve toward the line of equality?

Since 1970, the distribution of income in the United States

Regressive income taxes are

There is discrimination in the labor market on the planet of Yerk between two groups of people, the Mirks and the Morks. If the discrimination is against the Mirks, then the VMP curve for Mirks is the VMP curve for Morks, and the Mirks receive than the Morks.

The distribution of wealth is skewed in part because people with high wealth

-In the figure above, the poorest 20 percent of households receive ________ of total income.

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Uncertainty and Information

Filters

Exam 19: Economic Inequality

If a Lorenz curve moves leftward and becomes closer to the line of equality over time, then

Unemployment compensation is an example of

-In the figure above, the curve going through point A represents

-In the figure above, the Lorenz curve that shows the richest 20 percent of households receiving 40 percent of all income is

If customer discrimination does not exist, firms that discriminate on the basis of race or sex will

An income tax in which the average tax rate increases with income is called a

A worker pays a tax for Social Security at a constant rate up until a certain level of income is reached. Beyond that income level, no more Social Security tax is paid. The Social Security tax is an example of a

The biggest single factor affecting household income is the householder's age.

In recent years, average household income in the United States was highest for households headed by someone aged

Because of their higher value of marginal product

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

-The above table shows the distribution of wealth and income in Miseria. The Lorenz curve for wealth would

The distribution of income in the United States became more unequal in the 1990s. One explanation for this trend is that advances in information technologies have ________ low-skilled labor and ________ high-skilled labor.

Which of the following taxes causes the greatest shift of the Lorenz curve toward the line of equality?

Since 1970, the distribution of income in the United States

Regressive income taxes are

There is discrimination in the labor market on the planet of Yerk between two groups of people, the Mirks and the Morks. If the discrimination is against the Mirks, then the VMP curve for Mirks is ________ the VMP curve for Morks, and the Mirks receive ________ than the Morks.

The distribution of wealth is skewed in part because people with high wealth

-In the figure above, the poorest 20 percent of households receive ________ of total income.

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Uncertainty and Information

Filters

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

The distribution of income in the United States became more unequal in the 1990s. One explanation for this trend is that advances in information technologies have low-skilled labor and high-skilled labor.

There is discrimination in the labor market on the planet of Yerk between two groups of people, the Mirks and the Morks. If the discrimination is against the Mirks, then the VMP curve for Mirks is the VMP curve for Morks, and the Mirks receive than the Morks.