Question 1

The biggest single factor affecting household income is the householder's age.

Accepted Answer

A) True 
 B)False

Question 2

Wealth differs from income in that

Accepted Answer

A)   income measures value at a point in time and wealth measures value over a period of time.
B)   income measures value over a period of time and wealth measures value at a point in time.
C)   income is what you own and wealth is what you earn.
D)   wealth can be measured in dollars and income cannot.E) None of the above
F) All of the above

Question 3

If human capital was included in the measurement of wealth, the measurement of wealth would be

Accepted Answer

A)   more equal and more accurate.
B)   more equal and less accurate.
C)   less equal and more accurate.
D)   less equal and less accurate.E) None of the above
F) C) and D)

Question 4

Information technologies are a ________ for low-skilled labor and a ________ for high-skilled labor.

Accepted Answer

A)   substitute; substitute
B)   complement; complement
C)   substitute; complement
D)   complement; substituteE) A) and B)
F) A) and C)

Question 5

-The above figure shows the Lorenz curves for four different countries. In which country is income most equally distributed?

Accepted Answer

A)   country A
B)   country B
C)   country C
D)   country DE) C) and D)
F) None of the above

Question 6

Unemployment compensation is an example of

Accepted Answer

A)   a subsidized service.
B)   a regressive income program.
C)   a Social Security benefit.
D)   an income maintenance program.E) A) and D)
F) None of the above

Question 7

In recent years, average household income in the United States was highest for households headed by someone aged

Accepted Answer

A)   35 to 44.
B)   45 to 54.
C)   55 to 64.
D)   65 and over.E) C) and D)
F) B) and C)

Question 8

Since 1970, the U.S. Gini ratio has

Accepted Answer

A)   increased.
B)   decreased.
C)   increased and then decreased.
D)   decreased and then increased.E) None of the above
F) All of the above

Question 9

The public education system is an example of

Accepted Answer

A)   an income maintenance program.
B)   a negative income tax.
C)   the poor paying more than the market price for a service they receive.
D)   a subsidized service.E) A) and C)
F) None of the above

Question 10

Which of the following REDUCES equality of income or wealth relative to the market distribution?

Accepted Answer

A)   government payments to the poor
B)   a regressive income tax
C)   high taxes on bequests
D)   non-assortative matingE) A) and B)
F) A) and C)

Question 11

-Using the table provided above to construct Lorenz curves representing 1990 and 2011, what do you discover and how is this interpreted?

Accepted Answer

A)   The Lorenz curve for 1990 is further away from the line of equality than the curve for 2011. This means that inequality is decreasing.
B)   The Lorenz curve for 1990 is further away from the line of equality than the curve for 2011. This means that inequality is increasing.
C)   The Lorenz curve for 2011 is further away from the line of equality than the curve for 1990. This means that inequality is increasing.
D)   The Lorenz curve for 2011 is further away from the line of equality than the curve for 1990. This means that inequality is decreasing.E) All of the above
F) A) and D)

Question 12

If income is equally distributed, the Gini ratio is zero.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

Education and training affect both the s...

Question 14

-In the figure above, the poorest 20 percent of households receive ________ of total income.

Accepted Answer

A)   20 percent
B)   10 percent
C)   5 percent
D)   15 percentE) None of the above
F) All of the above

Question 15

-The "big tradeoff" refers to the tradeoff between

Accepted Answer

A)   work and leisure.
B)   equity and efficiency.
C)   public goods and private goods.
D)   taxes and transfers.E) B) and D)
F) B) and C)

Question 16

-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 inE) None of the above
F) C) and D)

Question 17

-The above figure shows the Lorenz curves for four different countries. If country C implemented a policy of redistribution from rich to poor, its Lorenz curve would

Accepted Answer

A)   move toward country B's.
B)   move toward country D's.
C)   become positively sloped.
D)   move above the line of equality.E) B) and C)
F) A) and C)

Question 18

-In the figure above, the lowest 20 percent of all households own ________ percent of all wealth, the next lowest 20 percent own ________ percent of all wealth and the richest 20 percent own ________ percent of all wealth.

Accepted Answer

A)   20; 20; 20
B)   20; 40; 100
C)   5; 15; 40
D)   5; 20; 60E) B) and D)
F) B) and C)

Question 19

-In the figure above, the quantity of low-skilled labor employed is

Accepted Answer

A)   2,000 hours per day.
B)   4,000 hours per day.
C)   5,000 hours per day.
D)   7,000 hours per day.E) B) and D)
F) All of the above

Question 20

The federal income tax in the United States is

Accepted Answer

A)   regressive.
B)   proportional.
C)   progressive.
D)   a flat-rate tax.E) A) and B)
F) A) and C)

Exam 19: Economic Inequality

Wealth differs from income in that

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

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

Correct AnswerverifiedEducation and training affect both the s...View AnswerShow Answer

-The above figure shows the Lorenz curves for four different countries. In which country is income most equally distributed?

Correct AnswerverifiedShow Answer

-The above figure shows the Lorenz curves for four different countries. If country C implemented a policy of redistribution from rich to poor, its Lorenz curve would

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In recent years, average household income in the United States was highest for households headed by someone aged

Correct AnswerverifiedShow Answer

-Using the table provided above to construct Lorenz curves representing 1990 and 2011, what do you discover and how is this interpreted?

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If human capital was included in the measurement of wealth, the measurement of wealth would be

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Which of the following REDUCES equality of income or wealth relative to the market distribution?

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If income is equally distributed, the Gini ratio is zero.

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Unemployment compensation is an example of

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The public education system is an example of

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-In the figure above, the quantity of low-skilled labor employed is

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-In the figure above, the lowest 20 percent of all households own ________ percent of all wealth, the next lowest 20 percent own ________ percent of all wealth and the richest 20 percent own ________ percent of all wealth.

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The federal income tax in the United States is

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Information technologies are a ________ for low-skilled labor and a ________ for high-skilled labor.

Correct AnswerverifiedShow Answer

The biggest single factor affecting household income is the householder's age.

Correct AnswerverifiedShow Answer

-In the figure above, the poorest 20 percent of households receive ________ of total income.

Correct AnswerverifiedShow Answer

-The "big tradeoff" refers to the tradeoff between

Correct AnswerverifiedShow Answer

Since 1970, the U.S. Gini ratio has

Correct AnswerverifiedShow Answer

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Education and training affect both the s...
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-In the figure above, the lowest 20 percent of all households own percent of all wealth, the next lowest 20 percent own percent of all wealth and the richest 20 percent own percent of all wealth.

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Information technologies are a for low-skilled labor and a for high-skilled labor.

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