Question 1

-In the figure above, 10 percent of income in country C is distributed to the

Accepted Answer

A)  richest 10 percent of the households. 
B)  poorest 10 percent of the households. 
C)  poorest 30 percent of the households. 
D)  poorest 70 percent of the households. 
A)  richest 10 percent of the households. 
B)  poorest 10 percent of the households. 
C)  poorest 30 percent of the households. 
D)  poorest 70 percent of the households.

Question 2

The big tradeoff between equality and efficiency exists because

Accepted Answer

A)  redistribution uses resources and weakens incentives to work. 
B)  redistribution uses resources and strengthens incentives to work. 
C)  redistribution creates additional resources and weakens incentives to work. 
D)  redistribution creates additional resources and strengthens incentives to work. 
A)  redistribution uses resources and weakens incentives to work. 
B)  redistribution uses resources and strengthens incentives to work. 
C)  redistribution creates additional resources and weakens incentives to work. 
D)  redistribution creates additional resources and strengthens incentives to work.

Question 3

Because skills are costly to obtain, at a given wage rate, the

Accepted Answer

A)  quantity demanded of high-skilled labor is less than the quantity demanded of low-skilled labor. 
B)  quantity demanded of high-skilled labor is greater than the quantity demanded of low-skilled labor. 
C)  quantity supplied of high-skilled labor is less than the quantity supplied of low-skilled labor. 
D)  quantity supplied of high-skilled labor is greater than the quantity supplier of low-skilled labor. 
A)  quantity demanded of high-skilled labor is less than the quantity demanded of low-skilled labor. 
B)  quantity demanded of high-skilled labor is greater than the quantity demanded of low-skilled labor. 
C)  quantity supplied of high-skilled labor is less than the quantity supplied of low-skilled labor. 
D)  quantity supplied of high-skilled labor is greater than the quantity supplier of low-skilled labor.

Question 4

-In the above table, which plan is a flat-rate tax?

Accepted Answer

A)  only plan A 
B)  only plan B 
C)  only plan C 
D)  both plan A and plan C 
A)  only plan A 
B)  only plan B 
C)  only plan C 
D)  both plan A and plan C

Question 5

-The above figure shows the Lorenz curve for wealth for the nation of Rusha. What percent of wealth is owned by the wealthiest quintile?

Accepted Answer

A)  0 percent 
B)  5 percent 
C)  40 percent 
D)  60 percent 
A)  0 percent 
B)  5 percent 
C)  40 percent 
D)  60 percent

Question 6

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

Accepted Answer

A)  supply of labor. 
B)  value of marginal product. 
C)  marginal cost of labor. 
D)  minimum wage. 
A)  supply of labor. 
B)  value of marginal product. 
C)  marginal cost of labor. 
D)  minimum wage.

Question 7

Income (percent of total)  
-The table above shows the income distribution in the United States and Italy in a recent year.
a) Draw a Lorenz curve for the United States. According to your graph, what is the percentage of income received by the poorest 30 percent of households? The richest 10 percent?
b) On the same graph, draw a Lorenz curve for Italy. According to your graph, what is the percentage of income received by the poorest 30 percent of households? The richest 10 percent?
c) Draw the line of equality. How is it related to the Lorenz curve?
d) Is income distributed more equally in the United States or in Italy? Which country's Gini ratio is closer to zero? Explain your answers.

Accepted Answer

@#IMG-DLM& a) See the figure above. The percentage

Question 8

In a Lorenz diagram for income, the line of equality shows

Accepted Answer

A)  the most equitable income distribution. 
B)  how unequally incomes are distributed. 
C)  how much redistribution occurs. 
D)  the income distribution if everyone received the same income. 
A)  the most equitable income distribution. 
B)  how unequally incomes are distributed. 
C)  how much redistribution occurs. 
D)  the income distribution if everyone received the same income.

Question 9

The supply curve for high-skilled labor lies to the

Accepted Answer

A)  right of the supply curve for low-skilled labor because more people want a high-skilled job. 
B)  left of the supply curve for low-skilled labor because more people want a high-skilled job. 
C)  left of the supply curve for low-skilled labor because it is costly to acquire skills. 
D)  right of the supply curve for low-skilled labor because fewer high-skilled people are willing to work for a low wage. 
A)  right of the supply curve for low-skilled labor because more people want a high-skilled job. 
B)  left of the supply curve for low-skilled labor because more people want a high-skilled job. 
C)  left of the supply curve for low-skilled labor because it is costly to acquire skills. 
D)  right of the supply curve for low-skilled labor because fewer high-skilled people are willing to work for a low wage.

Question 10

-The above figure shows the Lorenz curves for four different countries. Which country has the most unequal distribution of income?

Accepted Answer

A)  country A 
B)  country B 
C)  country C 
D)  country D 
A)  country A 
B)  country B 
C)  country C 
D)  country D

Question 11

-The above figure shows the Lorenz curves for four different countries. Which of the following statements is FALSE?

Accepted Answer

A)  Country A has an income distribution that is not perfectly equal. 
B)  Country D's income distribution is the most unequal of the four countries. 
C)  The distribution of income is more unequal in country A than in country B. 
D)  The distribution of income is more unequal in country D than in country C. 
A)  Country A has an income distribution that is not perfectly equal. 
B)  Country D's income distribution is the most unequal of the four countries. 
C)  The distribution of income is more unequal in country A than in country B. 
D)  The distribution of income is more unequal in country D than in country C.

Question 12

High skilled labor and information technology are ________ while low skilled labor and information technology are ________.

Accepted Answer

A)  complements; substitutes 
B)  substitutes; substitutes 
C)  substitutes; complements 
D)  complements; complements 
A)  complements; substitutes 
B)  substitutes; substitutes 
C)  substitutes; complements 
D)  complements; complements

Question 13

-Using the table provided above, what can be concluded about the Gini ratio and what does this mean for income equality?

Accepted Answer

A)  The Gini ratio is increasing which means there is greater income inequality. 
B)  The Gini ratio is increasing which means there is greater income equality. 
C)  The Gini ratio is decreasing which means there is greater income equality. 
D)  The Gini ratio is decreasing which means there is greater income inequality. 
A)  The Gini ratio is increasing which means there is greater income inequality. 
B)  The Gini ratio is increasing which means there is greater income equality. 
C)  The Gini ratio is decreasing which means there is greater income equality. 
D)  The Gini ratio is decreasing which means there is greater income inequality.

Question 14

Which of the following is NOT a potential reason for wage differences by race or sex?

Accepted Answer

A)  discrimination 
B)  differences in human capital 
C)  differences in the degree of specialization 
D)  All of the above are potential reasons for wage differences by race or sex. 
A)  discrimination 
B)  differences in human capital 
C)  differences in the degree of specialization 
D)  All of the above are potential reasons for wage differences by race or sex.

Question 15

-In the figure above, if income were distributed equally across all households, the richest 20 percent of households would receive ________ of total income.

Accepted Answer

A)  45 percent 
B)  25 percent 
C)  20 percent 
D)  15 percent 
A)  45 percent 
B)  25 percent 
C)  20 percent 
D)  15 percent

Question 16

Consider the country of Inland. In Inland, people's average tax rates decrease with the level of income. Inland has a ________ tax structure.

Accepted Answer

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

Question 17

-The Lorenz curve in the above figure implies that

Accepted Answer

A)  income is equally distributed. 
B)  the lowest fifth of households account for less than 20 percent of income. 
C)  the highest fifth of households account for less than 20 percent of income. 
D)  the lowest fifth of households account for more than 20 percent of income. 
A)  income is equally distributed. 
B)  the lowest fifth of households account for less than 20 percent of income. 
C)  the highest fifth of households account for less than 20 percent of income. 
D)  the lowest fifth of households account for more than 20 percent of income.

Question 18

-The figure shows two Lorenz curves. Suppose both Lorenz curves measure income. Lorenz curve A shows ________ Lorenz curve B.

Accepted Answer

A)  income is more equally distributed than the income shown in 
B)  income is less equally distributed than the income shown in 
C)  the first quintile earns less income than the first quintile earned in 
D)  the fifth quintile earns more income than the fifth quintile earned in 
A)  income is more equally distributed than the income shown in 
B)  income is less equally distributed than the income shown in 
C)  the first quintile earns less income than the first quintile earned in 
D)  the fifth quintile earns more income than the fifth quintile earned in

Question 19

The Lithuanian tax rate for all citizens' income is 24 percent and in Estonia, the tax rate is 21 percent. Lithuanian and Estonian income tax systems are examples of ________ taxes.

Accepted Answer

A)  proportional 
B)  progressive 
C)  regressive 
D)  equality 
A)  proportional 
B)  progressive 
C)  regressive 
D)  equality

Question 20

The 2010 Federal Personal Income six tax brackets range from 10 percent for individuals earning less than $8,025 to 35 percent for those earning over $357,700. The personal income tax system is

Accepted Answer

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

-In the figure above, 10 percent of income in country C is distributed to the

The big tradeoff between equality and efficiency exists because

Because skills are costly to obtain, at a given wage rate, the

-In the above table, which plan is a flat-rate tax?

-The above figure shows the Lorenz curve for wealth for the nation of Rusha. What percent of wealth is owned by the wealthiest quintile?

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

In a Lorenz diagram for income, the line of equality shows

The supply curve for high-skilled labor lies to the

-The above figure shows the Lorenz curves for four different countries. Which country has the most unequal distribution of income?

-The above figure shows the Lorenz curves for four different countries. Which of the following statements is FALSE?

High skilled labor and information technology are while low skilled labor and information technology are .

-Using the table provided above, what can be concluded about the Gini ratio and what does this mean for income equality?

Which of the following is NOT a potential reason for wage differences by race or sex?

-In the figure above, if income were distributed equally across all households, the richest 20 percent of households would receive ________ of total income.

Consider the country of Inland. In Inland, people's average tax rates decrease with the level of income. Inland has a ________ tax structure.

-The Lorenz curve in the above figure implies that

-The figure shows two Lorenz curves. Suppose both Lorenz curves measure income. Lorenz curve A shows ________ Lorenz curve B.

The Lithuanian tax rate for all citizens' income is 24 percent and in Estonia, the tax rate is 21 percent. Lithuanian and Estonian income tax systems are examples of ________ taxes.

The 2010 Federal Personal Income six tax brackets range from 10 percent for individuals earning less than $8,025 to 35 percent for those earning over $357,700. The personal income tax system is

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

-In the figure above, 10 percent of income in country C is distributed to the

The big tradeoff between equality and efficiency exists because

Because skills are costly to obtain, at a given wage rate, the

-In the above table, which plan is a flat-rate tax?

-The above figure shows the Lorenz curve for wealth for the nation of Rusha. What percent of wealth is owned by the wealthiest quintile?

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

In a Lorenz diagram for income, the line of equality shows

The supply curve for high-skilled labor lies to the

-The above figure shows the Lorenz curves for four different countries. Which country has the most unequal distribution of income?

-The above figure shows the Lorenz curves for four different countries. Which of the following statements is FALSE?

High skilled labor and information technology are ________ while low skilled labor and information technology are ________.

-Using the table provided above, what can be concluded about the Gini ratio and what does this mean for income equality?

Which of the following is NOT a potential reason for wage differences by race or sex?

-In the figure above, if income were distributed equally across all households, the richest 20 percent of households would receive ________ of total income.

Consider the country of Inland. In Inland, people's average tax rates decrease with the level of income. Inland has a ________ tax structure.

-The Lorenz curve in the above figure implies that

-The figure shows two Lorenz curves. Suppose both Lorenz curves measure income. Lorenz curve A shows ________ Lorenz curve B.

The Lithuanian tax rate for all citizens' income is 24 percent and in Estonia, the tax rate is 21 percent. Lithuanian and Estonian income tax systems are examples of ________ taxes.

The 2010 Federal Personal Income six tax brackets range from 10 percent for individuals earning less than $8,025 to 35 percent for those earning over $357,700. The personal income tax system is

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

High skilled labor and information technology are while low skilled labor and information technology are .