Question 1

Looking at the results of government income redistribution programs,we find that the income received by the

Accepted Answer

A)  lowest 20 percent of households is almost unchanged because most don't work. 
B)  highest 20 percent is left unaffected because they are able to shelter income from taxes. 
C)  lowest 20 percent increases, and the income received by the highest 20 percent decreases. 
D)  lowest 20 percent increases somewhat, but the income received by the next 20 percent increases the most. 
E)  lowest 20 percent decreases because of government taxes, and the income received by the highest 20 percent increases because of government subsidies. 
A)  lowest 20 percent of households is almost unchanged because most don't work. 
B)  highest 20 percent is left unaffected because they are able to shelter income from taxes. 
C)  lowest 20 percent increases, and the income received by the highest 20 percent decreases. 
D)  lowest 20 percent increases somewhat, but the income received by the next 20 percent increases the most. 
E)  lowest 20 percent decreases because of government taxes, and the income received by the highest 20 percent increases because of government subsidies.

Question 2

Social Security is a ________ program paid for by ________.

Accepted Answer

A)  compulsory; payroll taxes 
B)  compulsory; government money 
C)  voluntary; payroll taxes 
D)  voluntary; income taxes 
E)  compulsory; voluntary taxes on income 
A)  compulsory; payroll taxes 
B)  compulsory; government money 
C)  voluntary; payroll taxes 
D)  voluntary; income taxes 
E)  compulsory; voluntary taxes on income

Question 3

Looking at the Lorenz curves for income distribution in all the world's nations,we would find that

Accepted Answer

A)  some nations have Lorenz curves that lie above the 45° line, other nations have Lorenz curves that lie below the 45° line, but no nation has a Lorenz curve that lie on the 45° line. 
B)  all nations have Lorenz curves that lie above the 45° line. 
C)  all nations have Lorenz curves that lie below the 45° line. 
D)  some nations have Lorenz curves that lie above the 45° line, other nations have Lorenz curves that lie below the 45° line, and still other nations have a Lorenz curve that lies on the 45° line. 
E)  None of the above answers is correct. 
A)  some nations have Lorenz curves that lie above the 45° line, other nations have Lorenz curves that lie below the 45° line, but no nation has a Lorenz curve that lie on the 45° line. 
B)  all nations have Lorenz curves that lie above the 45° line. 
C)  all nations have Lorenz curves that lie below the 45° line. 
D)  some nations have Lorenz curves that lie above the 45° line, other nations have Lorenz curves that lie below the 45° line, and still other nations have a Lorenz curve that lies on the 45° line. 
E)  None of the above answers is correct.

Question 4

Which is distributed more equally: income or wealth?

Accepted Answer

The income distribution is much more equ

Question 5

What is a Lorenz curve?

Accepted Answer

A Lorenz curve is a curve that graphs th

Question 6

Pete just started a new job as an assembler and is earning a wage of $10 per hour.Sam,who is an experienced assembler assigned to train Pete,earns $15 per hour.The opportunity cost to Pete of acquiring this skill is

Accepted Answer

A)  $25 per hour. 
B)  $15 per hour. 
C)  $10 per hour. 
D)  $5 per hour. 
E)  $0 per hour because Pete is being paid a wage. 
A)  $25 per hour. 
B)  $15 per hour. 
C)  $10 per hour. 
D)  $5 per hour. 
E)  $0 per hour because Pete is being paid a wage.

Question 7

Compared to low-skilled workers,high-skilled workers have a ________ value of marginal product and ________ opportunity cost of obtaining their skills.

Accepted Answer

A)  higher; a higher 
B)  higher; a lower 
C)  lower; a higher 
D)  lower; a lower 
E)  higher; the same 
A)  higher; a higher 
B)  higher; a lower 
C)  lower; a higher 
D)  lower; a lower 
E)  higher; the same

Question 8

A negative income tax

Accepted Answer

A)  is a regressive income tax. 
B)  is currently in use in the United States. 
C)  makes the redistribution of income efficient. 
D)  provides every household with a guaranteed minimum annual income. 
E)  cannot be enacted in the United States because it is unconstitutional. 
A)  is a regressive income tax. 
B)  is currently in use in the United States. 
C)  makes the redistribution of income efficient. 
D)  provides every household with a guaranteed minimum annual income. 
E)  cannot be enacted in the United States because it is unconstitutional.

Question 9

In the United States since 1970 income has become ________ equally distributed and since the 1970s economic mobility among income groups has ________.

Accepted Answer

A)  more; increased 
B)  more; decreased 
C)  less; increased 
D)  less; decreased 
E)  None of the above answers is correct because economic mobility among income groups cannot be measured. 
A)  more; increased 
B)  more; decreased 
C)  less; increased 
D)  less; decreased 
E)  None of the above answers is correct because economic mobility among income groups cannot be measured.

Question 10

-In the figure above,the nation with the most equal distribution of income is nation

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  The distribution of income is the same in all three nations because their Lorenz curves can be plotted on the same diagram. 
E)  It is impossible to determine with the information given. 
A)  A. 
B)  B. 
C)  C. 
D)  The distribution of income is the same in all three nations because their Lorenz curves can be plotted on the same diagram. 
E)  It is impossible to determine with the information given.

Question 11

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

Accepted Answer

Both the Lorenz curve for wealth and the

Question 12

The table gives the distribution of income in Miseria.
-What percent of income is earned by the richest 60 percent of the population?

Accepted Answer

A)  25 percent 
B)  30 percent 
C)  55 percent 
D)  85 percent 
E)  More information is needed to answer the question. 
A)  25 percent 
B)  30 percent 
C)  55 percent 
D)  85 percent 
E)  More information is needed to answer the question.

Question 13

Lorenz curves are

Accepted Answer

A)  horizontal. 
B)  vertical. 
C)  upward sloping. 
D)  downward sloping. 
E)  straight lines. 
A)  horizontal. 
B)  vertical. 
C)  upward sloping. 
D)  downward sloping. 
E)  straight lines.

Question 14

Looking at the U.S.poverty rate by race,we see that

Accepted Answer

A)  the poverty rates by race are now equal. 
B)  whites have a higher poverty rate than do blacks. 
C)  Hispanics and blacks have a higher poverty rate than whites. 
D)  whites have a nearly zero poverty rate while Hispanics and blacks are near 20 percent. 
E)  whites and blacks have higher poverty rates than do Hispanics. 
A)  the poverty rates by race are now equal. 
B)  whites have a higher poverty rate than do blacks. 
C)  Hispanics and blacks have a higher poverty rate than whites. 
D)  whites have a nearly zero poverty rate while Hispanics and blacks are near 20 percent. 
E)  whites and blacks have higher poverty rates than do Hispanics.

Question 15

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,the value of the marginal product of skill creates the difference between the ________ curves and ________.

Accepted Answer

A)  SL and SH; is equal to $10 per hour 
B)  SL and SH; exceeds $10 per hour 
C)  DL and DH; is less than $10 per hour 
D)  DL and DH; is equal to $10 per hour 
E)  DL and DH; exceeds $10 per hour 
A)  SL and SH; is equal to $10 per hour 
B)  SL and SH; exceeds $10 per hour 
C)  DL and DH; is less than $10 per hour 
D)  DL and DH; is equal to $10 per hour 
E)  DL and DH; exceeds $10 per hour

Question 16

A regressive income tax is a tax for which the average tax rate

Accepted Answer

A)  increases as income increases. 
B)  becomes negative as income decreases. 
C)  decreases as income increases. 
D)  stays the same regardless of the income level. 
E)  first increases and then decreases as income increases. 
A)  increases as income increases. 
B)  becomes negative as income decreases. 
C)  decreases as income increases. 
D)  stays the same regardless of the income level. 
E)  first increases and then decreases as income increases.

Question 17

Which of the following is (are)a difference between high-skilled workers and low-skilled workers?
i.High-skilled workers have a higher value of marginal product.
ii.High-skilled workers have incurred lower opportunity costs to acquire their skills.
iii.The demand for high-skilled workers exceeds that for low-skilled workers.

Accepted Answer

A)  i only 
B)  ii and iii 
C)  i and ii 
D)  i and iii 
E)  i, ii, and iii 
A)  i only 
B)  ii and iii 
C)  i and ii 
D)  i and iii 
E)  i, ii, and iii

Question 18

Looking at wage differentials between white men and other groups in the United States,we see that

Accepted Answer

A)  white men and black men earn about the same but women of all races earn less. 
B)  white men earn more than black men but white women earn less than black men. 
C)  black men earn less than white men and less than white women. 
D)  white men and white women earn about the same but minorities earn less. 
E)  black men and men of Hispanic origin earn about the same amount and both groups of men are paid more than black women and women of Hispanic origin. 
A)  white men and black men earn about the same but women of all races earn less. 
B)  white men earn more than black men but white women earn less than black men. 
C)  black men earn less than white men and less than white women. 
D)  white men and white women earn about the same but minorities earn less. 
E)  black men and men of Hispanic origin earn about the same amount and both groups of men are paid more than black women and women of Hispanic origin.

Question 19

High-skilled workers earn more relative to low-skilled workers because the demand for high-skilled workers is ________ that for low-skilled workers and the supply is ________ that for low-skilled workers.

Accepted Answer

A)  greater than; greater than 
B)  greater than; lower than 
C)  lower than; greater than 
D)  lower than; lower than 
E)  greater than; the same as 
A)  greater than; greater than 
B)  greater than; lower than 
C)  lower than; greater than 
D)  lower than; lower than 
E)  greater than; the same as

Question 20

In the United States,it is the case that

Accepted Answer

A)  both income and wealth are equally distributed. 
B)  wealth is equally distributed but income is distributed unequally. 
C)  income is equally distributed but wealth is distributed unequally. 
D)  both income and wealth are unequally distributed and wealth is distributed more unequally than is income. 
E)  both income and wealth are unequally distributed and income is distributed more unequally than is wealth. 
A)  both income and wealth are equally distributed. 
B)  wealth is equally distributed but income is distributed unequally. 
C)  income is equally distributed but wealth is distributed unequally. 
D)  both income and wealth are unequally distributed and wealth is distributed more unequally than is income. 
E)  both income and wealth are unequally distributed and income is distributed more unequally than is wealth.

Looking at the results of government income redistribution programs,we find that the income received by the

Social Security is a program paid for by .

Looking at the Lorenz curves for income distribution in all the world's nations,we would find that

Which is distributed more equally: income or wealth?

What is a Lorenz curve?

Pete just started a new job as an assembler and is earning a wage of $10 per hour.Sam,who is an experienced assembler assigned to train Pete,earns $15 per hour.The opportunity cost to Pete of acquiring this skill is

Compared to low-skilled workers,high-skilled workers have a value of marginal product and opportunity cost of obtaining their skills.

A negative income tax

In the United States since 1970 income has become equally distributed and since the 1970s economic mobility among income groups has .

-In the figure above,the nation with the most equal distribution of income is nation

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

The table gives the distribution of income in Miseria. -What percent of income is earned by the richest 60 percent of the population?

Lorenz curves are

Looking at the U.S.poverty rate by race,we see that

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,the value of the marginal product of skill creates the difference between the curves and .

A regressive income tax is a tax for which the average tax rate

Looking at wage differentials between white men and other groups in the United States,we see that

High-skilled workers earn more relative to low-skilled workers because the demand for high-skilled workers is that for low-skilled workers and the supply is that for low-skilled workers.

In the United States,it is the case that

Getting Started

The U.S.and 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

Looking at the results of government income redistribution programs,we find that the income received by the

Social Security is a ________ program paid for by ________.

Looking at the Lorenz curves for income distribution in all the world's nations,we would find that

Which is distributed more equally: income or wealth?

What is a Lorenz curve?

Pete just started a new job as an assembler and is earning a wage of $10 per hour.Sam,who is an experienced assembler assigned to train Pete,earns $15 per hour.The opportunity cost to Pete of acquiring this skill is

Compared to low-skilled workers,high-skilled workers have a ________ value of marginal product and ________ opportunity cost of obtaining their skills.

A negative income tax

In the United States since 1970 income has become ________ equally distributed and since the 1970s economic mobility among income groups has ________.

-In the figure above,the nation with the most equal distribution of income is nation

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

The table gives the distribution of income in Miseria. -What percent of income is earned by the richest 60 percent of the population?

Lorenz curves are

Looking at the U.S.poverty rate by race,we see that

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,the value of the marginal product of skill creates the difference between the ________ curves and ________.

A regressive income tax is a tax for which the average tax rate

Looking at wage differentials between white men and other groups in the United States,we see that

High-skilled workers earn more relative to low-skilled workers because the demand for high-skilled workers is ________ that for low-skilled workers and the supply is ________ that for low-skilled workers.

In the United States,it is the case that

Getting Started

The U.S.and 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

Social Security is a program paid for by .

Compared to low-skilled workers,high-skilled workers have a value of marginal product and opportunity cost of obtaining their skills.

In the United States since 1970 income has become equally distributed and since the 1970s economic mobility among income groups has .

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,the value of the marginal product of skill creates the difference between the curves and .

High-skilled workers earn more relative to low-skilled workers because the demand for high-skilled workers is that for low-skilled workers and the supply is that for low-skilled workers.