Exam 19: Economic Inequality

Market income in the United States is distributed

Which of the following is NOT a government-run income maintenance program?

Welding has changed dramatically over the last decade with more welding jobs dependent on the use of computers. Computers are a complement only for high-skilled welders, so as more welding companies buy computers the wages of high-skilled welders will ________ and the wages of low-skilled welders will ________.

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

-A Lorenz curve can be used to illustrate

If one person has all the income and everyone else has none, the Gini ratio is zero.

What do the Lorenz curves for wealth and income in the United States look like? Which is closer to the line of equality?

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

Which is distributed more equally: income or wealth?

From left to right, the horizontal axis of the Lorenz curve ranks households from

Which of the following is TRUE regarding the distribution of wealth and the distribution of income?

-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.

Suppose there are two types of labor, high skilled and low skilled. The demand curve for high skilled labor lies ________ the demand curve for low skilled labor and the supply curve of high skilled labor lies ________ the supply curve of low skilled labor.

All of the following are programs that redistribute income by making direct payments to people in the lower part of the income distribution EXCEPT

The Lithuanian tax rate for all citizens' income is 24 percent. If the Lithuanian government was concerned about income inequality, they should change the tax system from a system that is currently ________ to a system that is ________.

Redistribution programs create a disincentive to work among

-If Bianca earns 5 percent on her wealth and that income amounts to $40,000, what is Bianca's wealth?

Which of the following is NOT an example of the opportunity cost of investing in human capital?

-In the figure above, in which country do the highest-income 30 percent of households have the highest fraction of the nation's income?

Consider the country of Outland. In Outland, people pay 10 percent of their income as a tax whether they earn $10,000 or $100,000 annually. Outland has ________ tax structure.