Question 1

A progressive 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 slowly decreases and then rapidly increases 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 slowly decreases and then rapidly increases as income increases.

Question 2

A Lorenz curve

Accepted Answer

A)  is identical to the straight line sloping up at a 45° angle. 
B)  lies above the straight line sloping up at a 45° angle. 
C)  lies below the straight line sloping up at a 45° angle. 
D)  starts below the straight line sloping up at a 45° angle and then ends above this line. 
E)  starts above the straight line sloping up at a 45° angle and then ends below this line. 
A)  is identical to the straight line sloping up at a 45° angle. 
B)  lies above the straight line sloping up at a 45° angle. 
C)  lies below the straight line sloping up at a 45° angle. 
D)  starts below the straight line sloping up at a 45° angle and then ends above this line. 
E)  starts above the straight line sloping up at a 45° angle and then ends below this line.

Question 3

If buyers discriminate against women and minorities,
i.the value of marginal product of women and minorities is less than otherwise.
ii.the wage rate paid to women and minorities is less than otherwise.
iii.more women and minorities are hired than otherwise.

Accepted Answer

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

Question 4

The ________ the value of marginal product of skill,the ________.

Accepted Answer

A)  smaller; larger is the wage differential between low-skilled workers and high-skilled workers 
B)  larger; more elastic the supply curve of labor 
C)  larger; larger is the wage differential between low-skilled workers and high-skilled workers 
D)  smaller; less elastic the supply curve of labor 
E)  smaller; larger is the cost of acquiring the skill 
A)  smaller; larger is the wage differential between low-skilled workers and high-skilled workers 
B)  larger; more elastic the supply curve of labor 
C)  larger; larger is the wage differential between low-skilled workers and high-skilled workers 
D)  smaller; less elastic the supply curve of labor 
E)  smaller; larger is the cost of acquiring the skill

Question 5

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 equilibrium wage differential between high-skilled workers and low-skilled workers is

Accepted Answer

A)  zero. 
B)  $5.00 or less per hour. 
C)  between $5.01 and $10.00 per hour. 
D)  between $10.01 and $20.00 per hour. 
E)  more than $20.01 per hour. 
A)  zero. 
B)  $5.00 or less per hour. 
C)  between $5.01 and $10.00 per hour. 
D)  between $10.01 and $20.00 per hour. 
E)  more than $20.01 per hour.

Question 6

The rates of return on high school and college educations have

Accepted Answer

A)  not been estimated, but are assumed to be high. 
B)  been estimated as negative, but these are still good options for most. 
C)  been estimated at 50 percent per year. 
D)  been estimated at between 5 to 10 percent per year. 
E)  been estimated to be essentially zero. 
A)  not been estimated, but are assumed to be high. 
B)  been estimated as negative, but these are still good options for most. 
C)  been estimated at 50 percent per year. 
D)  been estimated at between 5 to 10 percent per year. 
E)  been estimated to be essentially zero.

Question 7

"Over the past two decades,the distribution of income in the United States has become more equal." Is the previous statement correct or incorrect? Briefly explain your answer.

Accepted Answer

The statement is incorrect.In recent yea

Question 8

The three main ways that governments in the United States redistribute income are

Accepted Answer

A)  using the rule of law, subsidized services, and income taxes. 
B)  private property rights, income taxes and the minimum wage. 
C)  income taxes, income maintenance programs, and subsidized services. 
D)  income taxes, rent control, and food stamps. 
E)  sales taxes, food stamps, and subsidized services. 
A)  using the rule of law, subsidized services, and income taxes. 
B)  private property rights, income taxes and the minimum wage. 
C)  income taxes, income maintenance programs, and subsidized services. 
D)  income taxes, rent control, and food stamps. 
E)  sales taxes, food stamps, and subsidized services.

Question 9

If the income distribution is more unequal than the wealth distribution,then the

Accepted Answer

A)  Lorenz curve for income will be farther away from the line of equality than the Lorenz curve for wealth. 
B)  government has imposed a higher tax rate on income. 
C)  Lorenz curve for wealth will be farther away from the line of equality than the Lorenz curve for income. 
D)  Lorenz curve for wealth will lie above the Lorenz curve for income. 
E)  It is not possible to draw the Lorenz curve for wealth on the same figure with the Lorenz curve for income. 
A)  Lorenz curve for income will be farther away from the line of equality than the Lorenz curve for wealth. 
B)  government has imposed a higher tax rate on income. 
C)  Lorenz curve for wealth will be farther away from the line of equality than the Lorenz curve for income. 
D)  Lorenz curve for wealth will lie above the Lorenz curve for income. 
E)  It is not possible to draw the Lorenz curve for wealth on the same figure with the Lorenz curve for income.

Question 10

What are three programs that redistribute income in the United States by making direct payments to people? Who benefits from each program?

Accepted Answer

Three programs are Social Security,unemp

Question 11

Other things being equal,the demand curve for low-skilled workers ________ the demand curve for high-skilled workers.

Accepted Answer

A)  lies below 
B)  lies above 
C)  is the same as 
D)  is not comparable to 
E)  at high wages lies below and at low wages lies above 
A)  lies below 
B)  lies above 
C)  is the same as 
D)  is not comparable to 
E)  at high wages lies below and at low wages lies above

Question 12

How does the supply curve of high-skilled workers compare to the supply curve of low-skilled workers?

Accepted Answer

A)  Because skills are costly to acquire, at a given wage rate the quantity supplied of high-skilled workers is greater than that of low-skilled workers. 
B)  Because skills are costly to acquire, at any given wage rate the quantity supplied of high-skilled workers is less than that of low-skilled workers. 
C)  Because skills are inexpensive to acquire, at any given wage rate the quantity supplied of high-skilled workers is less than that of low-skilled workers. 
D)  Because skills are inexpensive to acquire, at any given wage rate the quantity supplied of high-skilled workers is greater than that of low-skilled workers. 
E)  None of the above answers is correct. 
A)  Because skills are costly to acquire, at a given wage rate the quantity supplied of high-skilled workers is greater than that of low-skilled workers. 
B)  Because skills are costly to acquire, at any given wage rate the quantity supplied of high-skilled workers is less than that of low-skilled workers. 
C)  Because skills are inexpensive to acquire, at any given wage rate the quantity supplied of high-skilled workers is less than that of low-skilled workers. 
D)  Because skills are inexpensive to acquire, at any given wage rate the quantity supplied of high-skilled workers is greater than that of low-skilled workers. 
E)  None of the above answers is correct.

Question 13

Which of the following statements about poverty is (are)correct?
i.Blacks and Hispanics have higher poverty rates than whites.
ii.Over the last 40 years,poverty rates for all groups have generally increased.
iii.Most household spells of poverty last well beyond 9 months.

Accepted Answer

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

Question 14

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

Accepted Answer

A)  Location of household 
B)  Type of household 
C)  Education 
D)  Age of household 
E)  Gender 
A)  Location of household 
B)  Type of household 
C)  Education 
D)  Age of household 
E)  Gender

Question 15

-The table above gives cumulative percent of income received by each 20 percent group of households.Label the figure below and then plot the Lorenz curves.In which nation is income more equally distributed?

Accepted Answer

@#IMG-DLM& The Lorenz curves a

Question 16

Is the poverty rate the lowest among Hispanic households,black households,or white households?

Accepted Answer

The poverty rate is lowest amo

Question 17

Which type of household has the lowest poverty rate?

Accepted Answer

A)  black 
B)  Hispanic 
C)  white 
D)  White and Hispanic are almost tied. 
E)  White and black are almost tied. 
A)  black 
B)  Hispanic 
C)  white 
D)  White and Hispanic are almost tied. 
E)  White and black are almost tied.

Question 18

If a firm is willing to pay a high-skilled worker $25 per hour and a low-skilled worker $10 per hour then the value of marginal product of skill is

Accepted Answer

A)  $15. 
B)  $40. 
C)  $10. 
D)  $25 
E)  There is not enough information to answer this question. 
A)  $15. 
B)  $40. 
C)  $10. 
D)  $25 
E)  There is not enough information to answer this question.

Question 19

Measured annual income inequality overstates actual lifetime inequality because

Accepted Answer

A)  poverty levels vary across states. 
B)  homeless people are not always counted. 
C)  different households are in different stages in the life cycle. 
D)  people tend to overstate their incomes. 
E)  people differ in the amount of education they have attained. 
A)  poverty levels vary across states. 
B)  homeless people are not always counted. 
C)  different households are in different stages in the life cycle. 
D)  people tend to overstate their incomes. 
E)  people differ in the amount of education they have attained.

Question 20

What determines the position of the supply curve of high-skilled workers relative to that of low-skilled workers?

Accepted Answer

A)  the cost of acquiring the skill 
B)  the difference in the demand curves for the two groups 
C)  Bureau of Labor Standard guidelines 
D)  the difference in the value of the marginal products 
E)  None of the above answers is correct. 
A)  the cost of acquiring the skill 
B)  the difference in the demand curves for the two groups 
C)  Bureau of Labor Standard guidelines 
D)  the difference in the value of the marginal products 
E)  None of the above answers is correct.

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

A Lorenz curve

If buyers discriminate against women and minorities, i.the value of marginal product of women and minorities is less than otherwise. ii.the wage rate paid to women and minorities is less than otherwise. iii.more women and minorities are hired than otherwise.

The the value of marginal product of skill,the .

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 equilibrium wage differential between high-skilled workers and low-skilled workers is

The rates of return on high school and college educations have

"Over the past two decades,the distribution of income in the United States has become more equal." Is the previous statement correct or incorrect? Briefly explain your answer.

The three main ways that governments in the United States redistribute income are

If the income distribution is more unequal than the wealth distribution,then the

What are three programs that redistribute income in the United States by making direct payments to people? Who benefits from each program?

Other things being equal,the demand curve for low-skilled workers ________ the demand curve for high-skilled workers.

How does the supply curve of high-skilled workers compare to the supply curve of low-skilled workers?

Which of the following statements about poverty is (are)correct? i.Blacks and Hispanics have higher poverty rates than whites. ii.Over the last 40 years,poverty rates for all groups have generally increased. iii.Most household spells of poverty last well beyond 9 months.

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

-The table above gives cumulative percent of income received by each 20 percent group of households.Label the figure below and then plot the Lorenz curves.In which nation is income more equally distributed?

Is the poverty rate the lowest among Hispanic households,black households,or white households?

Which type of household has the lowest poverty rate?

If a firm is willing to pay a high-skilled worker $25 per hour and a low-skilled worker $10 per hour then the value of marginal product of skill is

Measured annual income inequality overstates actual lifetime inequality because

What determines the position of the supply curve of high-skilled workers relative to that of low-skilled workers?

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 progressive income tax is a tax for which the average tax rate

A Lorenz curve

If buyers discriminate against women and minorities, i.the value of marginal product of women and minorities is less than otherwise. ii.the wage rate paid to women and minorities is less than otherwise. iii.more women and minorities are hired than otherwise.

The ________ the value of marginal product of skill,the ________.

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 equilibrium wage differential between high-skilled workers and low-skilled workers is

The rates of return on high school and college educations have

"Over the past two decades,the distribution of income in the United States has become more equal." Is the previous statement correct or incorrect? Briefly explain your answer.

The three main ways that governments in the United States redistribute income are

If the income distribution is more unequal than the wealth distribution,then the

What are three programs that redistribute income in the United States by making direct payments to people? Who benefits from each program?

Other things being equal,the demand curve for low-skilled workers ________ the demand curve for high-skilled workers.

How does the supply curve of high-skilled workers compare to the supply curve of low-skilled workers?

Which of the following statements about poverty is (are)correct? i.Blacks and Hispanics have higher poverty rates than whites. ii.Over the last 40 years,poverty rates for all groups have generally increased. iii.Most household spells of poverty last well beyond 9 months.

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

-The table above gives cumulative percent of income received by each 20 percent group of households.Label the figure below and then plot the Lorenz curves.In which nation is income more equally distributed?

Is the poverty rate the lowest among Hispanic households,black households,or white households?

Which type of household has the lowest poverty rate?

If a firm is willing to pay a high-skilled worker $25 per hour and a low-skilled worker $10 per hour then the value of marginal product of skill is

Measured annual income inequality overstates actual lifetime inequality because

What determines the position of the supply curve of high-skilled workers relative to that of low-skilled workers?

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

The the value of marginal product of skill,the .