Question 1

A tax is progressive if the average tax rate

Accepted Answer

A)  increases as income increases. 
B)  increases as income decreases. 
C)  is negative. 
D)  is positive. 
A)  increases as income increases. 
B)  increases as income decreases. 
C)  is negative. 
D)  is positive.

Question 2

Increased discrimination results in ________ of the workers discriminated against being hired and being paid ________ wage rates.

Accepted Answer

A)  more; higher 
B)  more; lower 
C)  fewer; higher 
D)  fewer; lower 
E)  the same number; lower 
A)  more; higher 
B)  more; lower 
C)  fewer; higher 
D)  fewer; lower 
E)  the same number; lower

Question 3

The wage differential between high-skilled and low-skilled workers is the result of

Accepted Answer

A)  a difference in the value of marginal product. 
B)  the cost of acquiring skills. 
C)  a negative income tax. 
D)  Both answers A and B are correct. 
E)  Both answers B and C are correct. 
A)  a difference in the value of marginal product. 
B)  the cost of acquiring skills. 
C)  a negative income tax. 
D)  Both answers A and B are correct. 
E)  Both answers B and C are correct.

Question 4

In the United States,the poorest 20 percent of households receive about ________ percent of total money income while the richest 20 percent receive about ________ percent of total money income.

Accepted Answer

A)  3; 50 
B)  8; 71 
C)  12.; 32 
D)  13; 68 
E)  20; 20 
A)  3; 50 
B)  8; 71 
C)  12.; 32 
D)  13; 68 
E)  20; 20

Question 5

-The figure above shows the market for high and low-skilled labor.Demand curve DA represents the demand for ________ labor because ________.

Accepted Answer

A)  low-skilled; low-skilled labor has a lower value of marginal product of labor than high-skilled labor 
B)  low-skilled; firms can afford to hire more low-skilled labor at lower wages 
C)  low-skilled; low-skilled labor's marginal product declines faster than high-skilled labor 
D)  high-skilled; firms cannot afford to hire as many high-skilled workers 
E)  high-skilled; high-skilled workers pay higher wages so they have lower disposable income 
A)  low-skilled; low-skilled labor has a lower value of marginal product of labor than high-skilled labor 
B)  low-skilled; firms can afford to hire more low-skilled labor at lower wages 
C)  low-skilled; low-skilled labor's marginal product declines faster than high-skilled labor 
D)  high-skilled; firms cannot afford to hire as many high-skilled workers 
E)  high-skilled; high-skilled workers pay higher wages so they have lower disposable income

Question 6

In 2004 the wealthiest 1 percent of all U.S.households owned what percentage of total wealth?

Accepted Answer

A)  more than 30 percent 
B)  less than 10 percent 
C)  more than 40 percent 
D)  more than 50 percent 
E)  more than 45 percent 
A)  more than 30 percent 
B)  less than 10 percent 
C)  more than 40 percent 
D)  more than 50 percent 
E)  more than 45 percent

Question 7

-In the figure above,the nation with the least 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 8

When government redistributes income,one dollar collected from a rich person translates into ________ received by a poor person.

Accepted Answer

A)  exactly one dollar 
B)  less than one dollar 
C)  more than one dollar 
D)  zero dollars 
E)  either exactly one dollar or, with some programs, more than one dollar 
A)  exactly one dollar 
B)  less than one dollar 
C)  more than one dollar 
D)  zero dollars 
E)  either exactly one dollar or, with some programs, more than one dollar

Question 9

Suppose a supply curve for high-skilled labor is drawn in the same graph as a supply curve for low-skilled labor.The vertical distance between these two curves represents the

Accepted Answer

A)  wage rate paid to a high-skilled worker. 
B)  wage rate paid to a low-skilled worker. 
C)  compensation the high-skilled worker requires for the cost of acquiring the skill. 
D)  number of high-skill workers that will be hired. 
E)  difference in the value of marginal product between the high-skilled workers and the low-skilled workers. 
A)  wage rate paid to a high-skilled worker. 
B)  wage rate paid to a low-skilled worker. 
C)  compensation the high-skilled worker requires for the cost of acquiring the skill. 
D)  number of high-skill workers that will be hired. 
E)  difference in the value of marginal product between the high-skilled workers and the low-skilled workers.

Question 10

Which of the following statements is correct?

Accepted Answer

A)  Wealth inequality in the United States is greater than income inequality. 
B)  Income inequality in the United States is greater than wealth inequality. 
C)  Income includes all the things owned by a household at a certain point in time. 
D)  The top fifth of households have a greater share of the nation's income than the nation's wealth. 
E)  The fraction of wealth owned by the bottom 20 percent of households is larger than the fraction income earned by the bottom 20 percent of households. 
A)  Wealth inequality in the United States is greater than income inequality. 
B)  Income inequality in the United States is greater than wealth inequality. 
C)  Income includes all the things owned by a household at a certain point in time. 
D)  The top fifth of households have a greater share of the nation's income than the nation's wealth. 
E)  The fraction of wealth owned by the bottom 20 percent of households is larger than the fraction income earned by the bottom 20 percent of households.

Question 11

How is human capital acquired?

Accepted Answer

Human capital can be

Question 12

The table gives the distribution of income in Miseria.
-What percent of income is earned by the richest 80 percent of the population?

Accepted Answer

A)  25 percent 
B)  95 percent 
C)  100 percent 
D)  5 percent 
E)  More information is needed to answer the question. 
A)  25 percent 
B)  95 percent 
C)  100 percent 
D)  5 percent 
E)  More information is needed to answer the question.

Question 13

The three major types of income maintenance programs are

Accepted Answer

A)  Social Security programs, unemployment compensation, and welfare programs. 
B)  food stamps, unemployment compensation, and agricultural price supports. 
C)  student loans, rent control, and welfare programs. 
D)  corporate welfare, minimum wages, and affirmative action laws. 
E)  minimum wages, food stamps, and student loans. 
A)  Social Security programs, unemployment compensation, and welfare programs. 
B)  food stamps, unemployment compensation, and agricultural price supports. 
C)  student loans, rent control, and welfare programs. 
D)  corporate welfare, minimum wages, and affirmative action laws. 
E)  minimum wages, food stamps, and student loans.

Question 14

In 2010,the poverty rate in the United States level was approximately ________ percent.

Accepted Answer

A)  3 
B)  15 
C)  32 
D)  20 
E)  26 
A)  3 
B)  15 
C)  32 
D)  20 
E)  26

Question 15

Passing the TANF welfare program has

Accepted Answer

A)  made welfare programs more open-ended entitlement programs. 
B)  limited assistance to five years. 
C)  eliminated work and public service requirements. 
D)  hurt economic incentives to work. 
E)  made it into a negative income tax program. 
A)  made welfare programs more open-ended entitlement programs. 
B)  limited assistance to five years. 
C)  eliminated work and public service requirements. 
D)  hurt economic incentives to work. 
E)  made it into a negative income tax program.

Question 16

Which of the following statements is true regarding the distribution of income in the United States?

Accepted Answer

A)  The Lorenz curve shows that incomes are distributed fairly. 
B)  The line of equality shows that incomes are distributed equally. 
C)  The inequality in the distribution of income can be seen because the Lorenz curve lies below the line of equality. 
D)  The inequality in the distribution of income can be seen because the Lorenz curve lies above the line of equality. 
E)  Both answers A and B are correct. 
A)  The Lorenz curve shows that incomes are distributed fairly. 
B)  The line of equality shows that incomes are distributed equally. 
C)  The inequality in the distribution of income can be seen because the Lorenz curve lies below the line of equality. 
D)  The inequality in the distribution of income can be seen because the Lorenz curve lies above the line of equality. 
E)  Both answers A and B are correct.

Question 17

Discrimination
A) can be corrected by imposing a negative income tax.
B) cannot explain economic inequality.
C) immediately results in an unequal ownership of capital.
D) is more likely to occur in a business where customers come into contact with minority employees.
E) means that the costs paid by people who discriminate are lower than otherwise.

Accepted Answer

The answer of Discrimination
A) can be corrected by imposing a...

Question 18

Assume a negative income tax is set up with a 20 percent tax rate on market income and a guaranteed minimum income of $9,000.
a.What is the amount of taxes a household with $23,000 of market income pays or the amount of taxes this household receives?
b.What is the amount of taxes a household with $65,000 of market income pays or the amount of taxes this household receives?

Accepted Answer

a.The taxes paid with market income of $

Question 19

Workers who have invested in education and training

Accepted Answer

A)  are more likely to find jobs that are not rewarding. 
B)  have a higher value of marginal product. 
C)  have a more difficult time finding a job because their wage rate is higher. 
D)  have identical supply curves to otherwise similar workers who have not invested in education and training. 
E)  None of the above answers is correct. 
A)  are more likely to find jobs that are not rewarding. 
B)  have a higher value of marginal product. 
C)  have a more difficult time finding a job because their wage rate is higher. 
D)  have identical supply curves to otherwise similar workers who have not invested in education and training. 
E)  None of the above answers is correct.

Question 20

At any wage rate,the quantity of welders willing to work is less than the quantity of tomato pickers.Why?

Accepted Answer

For the welder the cost of acquiring his

A tax is progressive if the average tax rate

Increased discrimination results in of the workers discriminated against being hired and being paid wage rates.

The wage differential between high-skilled and low-skilled workers is the result of

In the United States,the poorest 20 percent of households receive about percent of total money income while the richest 20 percent receive about percent of total money income.

-The figure above shows the market for high and low-skilled labor.Demand curve DA represents the demand for labor because .

In 2004 the wealthiest 1 percent of all U.S.households owned what percentage of total wealth?

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

When government redistributes income,one dollar collected from a rich person translates into ________ received by a poor person.

Suppose a supply curve for high-skilled labor is drawn in the same graph as a supply curve for low-skilled labor.The vertical distance between these two curves represents the

Which of the following statements is correct?

How is human capital acquired?

The table gives the distribution of income in Miseria. -What percent of income is earned by the richest 80 percent of the population?

The three major types of income maintenance programs are

In 2010,the poverty rate in the United States level was approximately ________ percent.

Passing the TANF welfare program has

Which of the following statements is true regarding the distribution of income in the United States?

Workers who have invested in education and training

At any wage rate,the quantity of welders willing to work is less than the quantity of tomato pickers.Why?

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

A tax is progressive if the average tax rate

Increased discrimination results in ________ of the workers discriminated against being hired and being paid ________ wage rates.

The wage differential between high-skilled and low-skilled workers is the result of

In the United States,the poorest 20 percent of households receive about ________ percent of total money income while the richest 20 percent receive about ________ percent of total money income.

-The figure above shows the market for high and low-skilled labor.Demand curve DA represents the demand for ________ labor because ________.

In 2004 the wealthiest 1 percent of all U.S.households owned what percentage of total wealth?

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

When government redistributes income,one dollar collected from a rich person translates into ________ received by a poor person.

Suppose a supply curve for high-skilled labor is drawn in the same graph as a supply curve for low-skilled labor.The vertical distance between these two curves represents the

Which of the following statements is correct?

How is human capital acquired?

The table gives the distribution of income in Miseria. -What percent of income is earned by the richest 80 percent of the population?

The three major types of income maintenance programs are

In 2010,the poverty rate in the United States level was approximately ________ percent.

Passing the TANF welfare program has

Which of the following statements is true regarding the distribution of income in the United States?

Workers who have invested in education and training

At any wage rate,the quantity of welders willing to work is less than the quantity of tomato pickers.Why?

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

Increased discrimination results in of the workers discriminated against being hired and being paid wage rates.

In the United States,the poorest 20 percent of households receive about percent of total money income while the richest 20 percent receive about percent of total money income.

-The figure above shows the market for high and low-skilled labor.Demand curve DA represents the demand for labor because .