Question 1

Lee earns more than does Pat. Which of the following can explain why?

Accepted Answer

A)  Pat is discriminated against. 
B)  Lee has more human capital. 
C)  Lee has a greater degree of specialization in earning an income. 
D)  All of the above could be a factor leading to the wage difference. 
A)  Pat is discriminated against. 
B)  Lee has more human capital. 
C)  Lee has a greater degree of specialization in earning an income. 
D)  All of the above could be a factor leading to the wage difference.

Question 2

-In the above figure, the long-run effect of providing university education at no charge to all qualified applicants would be to shift the curve SH

Accepted Answer

A)  and the curve SL leftward. 
B)  and the curve SL rightward. 
C)  leftward and the curve SL rightward. 
D)  rightward and the curve SL leftward. 
A)  and the curve SL leftward. 
B)  and the curve SL rightward. 
C)  leftward and the curve SL rightward. 
D)  rightward and the curve SL leftward.

Question 3

-In the figure above, the Lorenz curve that shows the richest 20 percent of households receiving 80 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 4

If a Lorenz curve for a country's income bows more rightward over time, then the country's

Accepted Answer

A)  income is increasing. 
B)  income is decreasing. 
C)  income is becoming more unequally distributed. 
D)  income is becoming more equally distributed. 
A)  income is increasing. 
B)  income is decreasing. 
C)  income is becoming more unequally distributed. 
D)  income is becoming more equally distributed.

Question 5

Since 1970, the world Gini ratio has ________ indicating that the world distribution of income has ________.

Accepted Answer

A)  risen; become more equal 
B)  fallen; become more equal 
C)  risen; become less equal 
D)  not changed; not changed 
A)  risen; become more equal 
B)  fallen; become more equal 
C)  risen; become less equal 
D)  not changed; not changed

Question 6

The demand curve for high-skilled labor lies to the right of the demand curve for low-skilled labor because

Accepted Answer

A)  there are more high-skilled workers than low-skilled workers. 
B)  high-skilled workers require more compensation to convince them to work than do low-skilled workers. 
C)  high-skilled labor is more productive than low-skilled labor. 
D)  firms need not be concerned with the minimum wage in the market for high-skilled labor. 
A)  there are more high-skilled workers than low-skilled workers. 
B)  high-skilled workers require more compensation to convince them to work than do low-skilled workers. 
C)  high-skilled labor is more productive than low-skilled labor. 
D)  firms need not be concerned with the minimum wage in the market for high-skilled labor.

Question 7

-The above figure shows the Lorenz curves for four different countries. If country C implemented a policy of redistribution from rich to poor, its Lorenz curve would

Accepted Answer

A)  move toward country B's. 
B)  move toward country D's. 
C)  become positively sloped. 
D)  move above the line of equality. 
A)  move toward country B's. 
B)  move toward country D's. 
C)  become positively sloped. 
D)  move above the line of equality.

Question 8

An income tax system in which the average tax rate decreases with the level of income is called a

Accepted Answer

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

Question 9

If human capital was included in the measurement of wealth, the measurement of wealth would be

Accepted Answer

A)  more equal and more accurate. 
B)  more equal and less accurate. 
C)  less equal and more accurate. 
D)  less equal and less accurate. 
A)  more equal and more accurate. 
B)  more equal and less accurate. 
C)  less equal and more accurate. 
D)  less equal and less accurate.

Question 10

Assortative mating means that

Accepted Answer

A)  poor women and rich men tend to marry. 
B)  rich women and rich men tend to marry. 
C)  rich women and poor men tend to marry. 
D)  there are limited incentives to marry anyone. 
A)  poor women and rich men tend to marry. 
B)  rich women and rich men tend to marry. 
C)  rich women and poor men tend to marry. 
D)  there are limited incentives to marry anyone.

Question 11

"The Big Tradeoff" refers to the effect of redistribution on efficiency.

Accepted Answer

A) True 
 B)False

Question 12

Sue has human capital worth $500,000 and nonhuman capital of $100,000. Todd has human capital worth $10,000 and nonhuman capital of $50,000. The return on each type of capital is 10 percent a year. According to the Census Bureau in the national wealth and income survey, Sue is ________.

Accepted Answer

A)  as wealthy as Todd 
B)  10 times wealthier than Todd 
C)  twice as wealthy as Todd 
D)  50 times wealthier than Todd 
A)  as wealthy as Todd 
B)  10 times wealthier than Todd 
C)  twice as wealthy as Todd 
D)  50 times wealthier than Todd

Question 13

A firm that discriminates has ________ a nonprejudiced firm and ________.

Accepted Answer

A)  the same costs as; competes most often with imported goods and services 
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; cannot survive in a competitive industry 
A)  the same costs as; competes most often with imported goods and services 
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; cannot survive in a competitive industry

Question 14

What is the main reason that the distribution of measured wealth is more unequal than the distribution of income?

Accepted Answer

The distribution of income sta

Question 15

-In the figure above, the difference in wage rate between low-skilled and high-skilled labor is

Accepted Answer

A)  $16. 
B)  $8. 
C)  $20. 
D)  $28. 
A)  $16. 
B)  $8. 
C)  $20. 
D)  $28.

Question 16

Assortative mating results in

Accepted Answer

A)  many people being able to marry their way out of poverty. 
B)  wealth becoming more concentrated among families. 
C)  the Lorenz curve moving rightward closer to the line of equality. 
D)  people marrying at a later age. 
A)  many people being able to marry their way out of poverty. 
B)  wealth becoming more concentrated among families. 
C)  the Lorenz curve moving rightward closer to the line of equality. 
D)  people marrying at a later age.

Question 17

The table shows the distributions of market income and money income in the United States in 2007.  
-According to the table above, ________ percent of total income is redistributed from the highest income group.

Accepted Answer

A)  4.7 
B)  2.3 
C)  1.5 
D)  3.8 
A)  4.7 
B)  2.3 
C)  1.5 
D)  3.8

Question 18

Measured distributions of wealth that do not consider the role of human capital

Accepted Answer

A)  are more equal than the distribution of income. 
B)  overstate the inequality in wealth distribution. 
C)  are more equal than the distribution of consumption. 
D)  understate the inequality in wealth distribution. 
A)  are more equal than the distribution of income. 
B)  overstate the inequality in wealth distribution. 
C)  are more equal than the distribution of consumption. 
D)  understate the inequality in wealth distribution.

Question 19

Over the past decade, the incomes of the top 1 percent have increased while the incomes of the middle class declined. These changes mean that the Lorenz curve moved ________ the 45 degree line and the Gini ratio has ________.

Accepted Answer

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

Question 20

-The table above shows the demand for labor and supply of labor schedules for low-skilled labor. If the labor market is competitive, what is the wage rate of low-skilled labor and what is the quantity of low-skilled labor employed?

Accepted Answer

A)  $6 an hour; 60 hours a day 
B)  $6 an hour; 65 hours a day 
C)  $4 an hour; 70 hours a day 
D)  $4 an hour; 55 hours a day 
A)  $6 an hour; 60 hours a day 
B)  $6 an hour; 65 hours a day 
C)  $4 an hour; 70 hours a day 
D)  $4 an hour; 55 hours a day

Lee earns more than does Pat. Which of the following can explain why?

-In the above figure, the long-run effect of providing university education at no charge to all qualified applicants would be to shift the curve S_H

-In the figure above, the Lorenz curve that shows the richest 20 percent of households receiving 80 percent of all income is

If a Lorenz curve for a country's income bows more rightward over time, then the country's

Since 1970, the world Gini ratio has indicating that the world distribution of income has .

The demand curve for high-skilled labor lies to the right of the demand curve for low-skilled labor because

-The above figure shows the Lorenz curves for four different countries. If country C implemented a policy of redistribution from rich to poor, its Lorenz curve would

An income tax system in which the average tax rate decreases with the level of income is called a

If human capital was included in the measurement of wealth, the measurement of wealth would be

Assortative mating means that

"The Big Tradeoff" refers to the effect of redistribution on efficiency.

Sue has human capital worth $500,000 and nonhuman capital of $100,000. Todd has human capital worth $10,000 and nonhuman capital of $50,000. The return on each type of capital is 10 percent a year. According to the Census Bureau in the national wealth and income survey, Sue is ________.

A firm that discriminates has a nonprejudiced firm and .

What is the main reason that the distribution of measured wealth is more unequal than the distribution of income?

-In the figure above, the difference in wage rate between low-skilled and high-skilled labor is

Assortative mating results in

The table shows the distributions of market income and money income in the United States in 2007. -According to the table above, ________ percent of total income is redistributed from the highest income group.

Measured distributions of wealth that do not consider the role of human capital

Over the past decade, the incomes of the top 1 percent have increased while the incomes of the middle class declined. These changes mean that the Lorenz curve moved the 45 degree line and the Gini ratio has .

-The table above shows the demand for labor and supply of labor schedules for low-skilled labor. If the labor market is competitive, what is the wage rate of low-skilled labor and what is the quantity of low-skilled labor employed?

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

Lee earns more than does Pat. Which of the following can explain why?

-In the above figure, the long-run effect of providing university education at no charge to all qualified applicants would be to shift the curve SH

-In the figure above, the Lorenz curve that shows the richest 20 percent of households receiving 80 percent of all income is

If a Lorenz curve for a country's income bows more rightward over time, then the country's

Since 1970, the world Gini ratio has ________ indicating that the world distribution of income has ________.

The demand curve for high-skilled labor lies to the right of the demand curve for low-skilled labor because

-The above figure shows the Lorenz curves for four different countries. If country C implemented a policy of redistribution from rich to poor, its Lorenz curve would

An income tax system in which the average tax rate decreases with the level of income is called a

If human capital was included in the measurement of wealth, the measurement of wealth would be

Assortative mating means that

"The Big Tradeoff" refers to the effect of redistribution on efficiency.

Sue has human capital worth $500,000 and nonhuman capital of $100,000. Todd has human capital worth $10,000 and nonhuman capital of $50,000. The return on each type of capital is 10 percent a year. According to the Census Bureau in the national wealth and income survey, Sue is ________.

A firm that discriminates has ________ a nonprejudiced firm and ________.

What is the main reason that the distribution of measured wealth is more unequal than the distribution of income?

-In the figure above, the difference in wage rate between low-skilled and high-skilled labor is

Assortative mating results in

The table shows the distributions of market income and money income in the United States in 2007. -According to the table above, ________ percent of total income is redistributed from the highest income group.

Measured distributions of wealth that do not consider the role of human capital

Over the past decade, the incomes of the top 1 percent have increased while the incomes of the middle class declined. These changes mean that the Lorenz curve moved ________ the 45 degree line and the Gini ratio has ________.

-The table above shows the demand for labor and supply of labor schedules for low-skilled labor. If the labor market is competitive, what is the wage rate of low-skilled labor and what is the quantity of low-skilled labor employed?

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

-In the above figure, the long-run effect of providing university education at no charge to all qualified applicants would be to shift the curve S_H

Since 1970, the world Gini ratio has indicating that the world distribution of income has .

A firm that discriminates has a nonprejudiced firm and .

Over the past decade, the incomes of the top 1 percent have increased while the incomes of the middle class declined. These changes mean that the Lorenz curve moved the 45 degree line and the Gini ratio has .