Question 1

If the Lorenz curve for income moves upward toward the 45° line,then the

Accepted Answer

A)  distribution of income has become more unequal. 
B)  distribution of income has become more equal. 
C)  mean (average) household income increased. 
D)  total household income increased. 
E)  total household income decreased. 
A)  distribution of income has become more unequal. 
B)  distribution of income has become more equal. 
C)  mean (average) household income increased. 
D)  total household income increased. 
E)  total household income decreased.

Question 2

-The above table shows the distribution of income in two countries,Alpha and Beta.In Country Alpha,the poorest 20 percent receive ________ percent of total income.

Accepted Answer

A)  5 
B)  9 
C)  1 
D)  19 
E)  14 
A)  5 
B)  9 
C)  1 
D)  19 
E)  14

Question 3

How does the demand for high-skilled workers compare to the demand for low-skilled workers? Why does this difference exist?

Accepted Answer

The demand for high-skilled workers exce

Question 4

The more costly it is to acquire a skill,the

Accepted Answer

A)  more people will go to school to learn the skill. 
B)  less employers are willing to pay for the skill. 
C)  greater the wage differential between high-skilled and low-skilled workers. 
D)  smaller the wage differential between high-skilled and low-skilled workers. 
E)  more the demand for workers with that skill exceeds the demand for workers without that skill. 
A)  more people will go to school to learn the skill. 
B)  less employers are willing to pay for the skill. 
C)  greater the wage differential between high-skilled and low-skilled workers. 
D)  smaller the wage differential between high-skilled and low-skilled workers. 
E)  more the demand for workers with that skill exceeds the demand for workers without that skill.

Question 5

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

Accepted Answer

A)  25 percent 
B)  30 percent 
C)  55 percent 
D)  15 percent 
E)  More information is needed to answer the question. 
A)  25 percent 
B)  30 percent 
C)  55 percent 
D)  15 percent 
E)  More information is needed to answer the question.

Question 6

________ is a component of welfare programs.

Accepted Answer

A)  A progressive income tax 
B)  Unemployment compensation 
C)  Medicaid 
D)  Social Security payroll taxes 
E)  The negative income tax 
A)  A progressive income tax 
B)  Unemployment compensation 
C)  Medicaid 
D)  Social Security payroll taxes 
E)  The negative income tax

Question 7

One reason economic ________ occurs is because high-skilled workers ________.

Accepted Answer

A)  inequality; have a higher value of marginal product than low-skilled workers and earn higher wages 
B)  inequality; pay higher income taxes on their higher wages 
C)  income redistribution; have a higher value of marginal product than low-skilled workers 
D)  equality; earn higher wages so firms demand less high-skilled labor 
E)  equality; have a lower value of marginal product due to higher wages 
A)  inequality; have a higher value of marginal product than low-skilled workers and earn higher wages 
B)  inequality; pay higher income taxes on their higher wages 
C)  income redistribution; have a higher value of marginal product than low-skilled workers 
D)  equality; earn higher wages so firms demand less high-skilled labor 
E)  equality; have a lower value of marginal product due to higher wages

Question 8

In the United States,the poorest 20 percent of the household receive approximately ________ percent of total money income.

Accepted Answer

A)  3.3 
B)  9.5 
C)  11.8 
D)  17.6 
E)  20.0 
A)  3.3 
B)  9.5 
C)  11.8 
D)  17.6 
E)  20.0

Question 9

With a negative income tax that has a $10,000 guaranteed income and a 25 percent tax rate,a household that has a market income of $4,000 has a total income of

Accepted Answer

A)  $15,000. 
B)  $14,000. 
C)  $13,000. 
D)  $10,000. 
E)  $7,000. 
A)  $15,000. 
B)  $14,000. 
C)  $13,000. 
D)  $10,000. 
E)  $7,000.

Question 10

The demand curve for high-skilled workers

Accepted Answer

A)  lies to the right of the demand curve for low-skilled workers. 
B)  lies to the left of the demand curve for low-skilled workers. 
C)  is vertical. 
D)  is horizontal. 
E)  lies to the right of the demand curve for low-skilled workers at high wages and to the left of the demand curve for low-skilled workers at low wages. 
A)  lies to the right of the demand curve for low-skilled workers. 
B)  lies to the left of the demand curve for low-skilled workers. 
C)  is vertical. 
D)  is horizontal. 
E)  lies to the right of the demand curve for low-skilled workers at high wages and to the left of the demand curve for low-skilled workers at low wages.

Question 11

Describe the effect education and training have on outcomes in the labor market.

Accepted Answer

Education and training affect both the s

Question 12

A negative income tax is a system that,in part,

Accepted Answer

A)  taxes lower-income households at a higher rate. 
B)  taxes higher-income households at a higher rate. 
C)  guarantees a minimum level of income for all households. 
D)  gives money from taxes paid by the poor to wealthy investors. 
E)  guarantees a minimum level of taxation for all households. 
A)  taxes lower-income households at a higher rate. 
B)  taxes higher-income households at a higher rate. 
C)  guarantees a minimum level of income for all households. 
D)  gives money from taxes paid by the poor to wealthy investors. 
E)  guarantees a minimum level of taxation for all households.

Question 13

The higher the cost of acquiring skills,the ________ are the high-skilled and low-skilled labor ________ curves.

Accepted Answer

A)  closer together; demand 
B)  farther apart; demand 
C)  closer together; supply 
D)  farther apart; supply 
A)  closer together; demand 
B)  farther apart; demand 
C)  closer together; supply 
D)  farther apart; supply

Question 14

The figure above shows Lorenz curves for a nation.
-Based on the figure above,which of the following can cause a movement from point C to point D on the Lorenz curve for income?

Accepted Answer

A)  an increase in income for the bottom 60 percent of households 
B)  an increase in income for the bottom 80 percent of households 
C)  a decrease in income for the bottom 60 percent of households 
D)  a decrease in income for the bottom 80 percent of households 
E)  None of the above answers is correct. 
A)  an increase in income for the bottom 60 percent of households 
B)  an increase in income for the bottom 80 percent of households 
C)  a decrease in income for the bottom 60 percent of households 
D)  a decrease in income for the bottom 80 percent of households 
E)  None of the above answers is correct.

Question 15

How does an increase in the cost to acquire a skill affect the vertical distance between the supply curves of high-skilled and low-skilled workers?

Accepted Answer

The vertical distance between the supply

Question 16

What is "human capital"? How is it important in the determination of a worker's wage rate?

Accepted Answer

Human capital is the skill,education,and

Question 17

"If the distribution of income was equal,the Lorenz curve would be a straight,45° line." Is the previous statement correct or incorrect?

Accepted Answer

The statem

Question 18

What economic effect works to eliminate sex and race discrimination?

Accepted Answer

A)  Firms hire only the preferred races and sex. 
B)  Lower paid races and sexes give up working and drop out of the labor supply. 
C)  Customers who discriminate pay higher prices to buy from preferred races and sex. 
D)  The value of marginal product of the less preferred races and sexes eventually increases. 
E)  Lower paid races and sexes decrease their demand for goods and services. 
A)  Firms hire only the preferred races and sex. 
B)  Lower paid races and sexes give up working and drop out of the labor supply. 
C)  Customers who discriminate pay higher prices to buy from preferred races and sex. 
D)  The value of marginal product of the less preferred races and sexes eventually increases. 
E)  Lower paid races and sexes decrease their demand for goods and services.

Question 19

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

Accepted Answer

A)  the cumulative percentage of money income against the cumulative percentage of households. 
B)  the percentage of total money income received by each given percentage of households. 
C)  the mean income, median income, and mode income against the percentage of households. 
D)  the mean money income received by households over time. 
E)  the cumulative percentage of money income against the mean and median money income. 
A)  the cumulative percentage of money income against the cumulative percentage of households. 
B)  the percentage of total money income received by each given percentage of households. 
C)  the mean income, median income, and mode income against the percentage of households. 
D)  the mean money income received by households over time. 
E)  the cumulative percentage of money income against the mean and median money income.

Question 20

Social Security and unemployment compensation

Accepted Answer

A)  are paid only to the poorest households. 
B)  are both funded by income taxes. 
C)  are distributed by individual states. 
D)  both redistribute income. 
E)  make the distribution of income less equal. 
A)  are paid only to the poorest households. 
B)  are both funded by income taxes. 
C)  are distributed by individual states. 
D)  both redistribute income. 
E)  make the distribution of income less equal.

If the Lorenz curve for income moves upward toward the 45° line,then the

-The above table shows the distribution of income in two countries,Alpha and Beta.In Country Alpha,the poorest 20 percent receive ________ percent of total income.

How does the demand for high-skilled workers compare to the demand for low-skilled workers? Why does this difference exist?

The more costly it is to acquire a skill,the

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

________ is a component of welfare programs.

One reason economic occurs is because high-skilled workers .

In the United States,the poorest 20 percent of the household receive approximately ________ percent of total money income.

With a negative income tax that has a $10,000 guaranteed income and a 25 percent tax rate,a household that has a market income of $4,000 has a total income of

The demand curve for high-skilled workers

Describe the effect education and training have on outcomes in the labor market.

A negative income tax is a system that,in part,

The higher the cost of acquiring skills,the are the high-skilled and low-skilled labor curves.

The figure above shows Lorenz curves for a nation. -Based on the figure above,which of the following can cause a movement from point C to point D on the Lorenz curve for income?

How does an increase in the cost to acquire a skill affect the vertical distance between the supply curves of high-skilled and low-skilled workers?

What is "human capital"? How is it important in the determination of a worker's wage rate?

"If the distribution of income was equal,the Lorenz curve would be a straight,45° line." Is the previous statement correct or incorrect?

What economic effect works to eliminate sex and race discrimination?

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

Social Security and unemployment compensation

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

If the Lorenz curve for income moves upward toward the 45° line,then the

-The above table shows the distribution of income in two countries,Alpha and Beta.In Country Alpha,the poorest 20 percent receive ________ percent of total income.

How does the demand for high-skilled workers compare to the demand for low-skilled workers? Why does this difference exist?

The more costly it is to acquire a skill,the

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

________ is a component of welfare programs.

One reason economic ________ occurs is because high-skilled workers ________.

In the United States,the poorest 20 percent of the household receive approximately ________ percent of total money income.

With a negative income tax that has a $10,000 guaranteed income and a 25 percent tax rate,a household that has a market income of $4,000 has a total income of

The demand curve for high-skilled workers

Describe the effect education and training have on outcomes in the labor market.

A negative income tax is a system that,in part,

The higher the cost of acquiring skills,the ________ are the high-skilled and low-skilled labor ________ curves.

The figure above shows Lorenz curves for a nation. -Based on the figure above,which of the following can cause a movement from point C to point D on the Lorenz curve for income?

How does an increase in the cost to acquire a skill affect the vertical distance between the supply curves of high-skilled and low-skilled workers?

What is "human capital"? How is it important in the determination of a worker's wage rate?

"If the distribution of income was equal,the Lorenz curve would be a straight,45° line." Is the previous statement correct or incorrect?

What economic effect works to eliminate sex and race discrimination?

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

Social Security and unemployment compensation

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

One reason economic occurs is because high-skilled workers .

The higher the cost of acquiring skills,the are the high-skilled and low-skilled labor curves.