Question 1

Which of the following is true? At a given quantity of employment,if the
i.value of marginal product of a high-skill worker is $35 and the value of marginal product of a low-skill worker is $10,the value of marginal product of the skill is $25.
ii.value of marginal product of a high-skill worker is $35 and the value of marginal product of a low-skill worker is $10,the cost of acquiring the skill is $25.
iii.value of marginal product of a skill is $25,then the wage rate must be $25.

Accepted Answer

A)   i only
B)   ii only
C)   iii only
D)   i and iii
E)   ii and iiiF) B) and E)
G) B) and D)

Question 2

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)   20.0F) A) and B)
G) B) and C)

Question 3

Suppose a government of LaLa Land imposes the following tax rates on its citizens.
  Income  Tax Rate  below $30,0009%$30,001−$70,00012% above $70,00017%\begin{array} { | c | c | } \hline 	ext { Income } & 	ext { Tax Rate } \\hline 	ext { below } \$ 30,000 & 9 \% \\hline \$ 30,001 - \$ 70,000 & 12 \% \\hline 	ext { above } \$ 70,000 & 17 \% \\hline\end{array} Income  below $30,000$30,001−$70,000 above $70,000​ Tax Rate 9%12%17%​​ 
The government has imposed a ________ tax system because its citizens will pay a ________ portion of their income as taxes as incomes increase.

Accepted Answer

A)   progressive; larger
B)   progressive; smaller
C)   regressive; larger
D)   regressive; smaller
E)   proportional; larger F) A) and C)
G) A) and B)

Question 4

Group  Percent of  income  Poorest 20%5 Second poorest 20%10 Middle 20%15 Second richest 20%25 Richest 20%45\begin{array} { | c | c | } \hline 	ext { Group } & \begin{array} { c } 	ext { Percent of } \	ext { income }\end{array} \\hline 	ext { Poorest } 20 \% & 5 \\hline 	ext { Second poorest } 20 \% & 10 \\hline 	ext { Middle } 20 \% & 15 \\hline 	ext { Second richest } 20 \% & 25 \\hline 	ext { Richest } 20 \% & 45 \\hline\end{array} Group  Poorest 20% Second poorest 20% Middle 20% Second richest 20% Richest 20%​ Percent of  income ​510152545​​  
The table gives the distribution of income in Mise
-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. F) A) and B)
G) A) and C)

Question 5

-The figure above shows the market for high and low-skilled labor.Supply curve SB represents the supply of ________ labor because ________.

Accepted Answer

A)   high-skilled; these workers must receive higher pay in return for acquiring their skills
B)   high-skilled; firms supply more jobs for high-skilled workers
C)   low-skilled; low-skilled labor must work more hours to compensate for their lower wage
D)   low-skilled; firms supply fewer jobs for low-skilled labor
E)   low-skilled; low-skilled labor has a lower value of marginal productF) D) and E)
G) A) and E)

Question 6

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.F) B) and D)
G) C) and E) E

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 sameF) A) and E)
G) A) and D)

Question 8

In the United States in 2010,a family of four was considered to be living below the poverty line only if its household income was less than approximately

Accepted Answer

A)   $400 per year.
B)   $4,000 per year.
C)   $11,900 per year.
D)   $22,800 per year.
E)   $35,800 per year.F) B) and D)
G) A) and E)

Question 9

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.F) B) and D)
G) C) and D)

Question 10

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 compensation for the cost of acquiring the skill creates the difference between the ________ curves and ________.

Accepted Answer

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

Question 11

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.E) All of the above
F) A) and B)

Question 12

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,if the cost of acquiring the skill decreased,then the

Accepted Answer

A)   SL curve shifts leftward.
B)   SH curve shifts leftward.
C)   SH curve shifts rightward.
D)   DH curve shifts leftward.
E)   DL curve shifts leftward.F) B) and D)
G) C) and E)

Question 13

-In the figure above,the nation with the highest average income is nation

Accepted Answer

A)   A.
B)   B.
C)   C.
D)   The average 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.F) C) and E)
G) C) and D)

Question 14

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.F) None of the above
G) A) and E)

Question 15

The figure above shows Lorenz curves for a nation
-Based on the figure above,

Accepted Answer

A)   the average household's income exceeds its wealth.
B)   the average household's wealth exceeds its income.
C)   income is distributed more equally than wealth.
D)   wealth is distributed more equally than income.
E)   Both answers A and C are correct.F) B) and C)
G) A) and B)

Question 16

In the United States,the federal and state income tax system is

Accepted Answer

A)   progressive.
B)   proportional.
C)   regressive.
D)   a flat-rate tax.
E)   None of the above answers is correct.F) All of the above
G) C) and E)

Question 17

The figure above shows Lorenz curves for a nation
-Based on the figure above,if the poorest 20 percent group of households increased the share of the nation's income they receive,then

Accepted Answer

A)   there is a movement up along the Lorenz curve for income.
B)   there is a movement down along the Lorenz curve for income.
C)   the Lorenz curve for income shifts toward the line of equality.
D)   the Lorenz curve for income shifts away from the line of equality.
E)   Both answers A and C are correct.F) C) and E)
G) A) and B)

Question 18

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.F) D) and E)
G) B) and D) A

Question 19

Which of the following is correct about the United States?

Accepted Answer

A)   Income is equally distributed.
B)   Wealth is equally distributed.
C)   Income is equally distributed but wealth is unequally distributed because of inheritances.
D)   Both wealth and income are unequally distributed.
E)   Both wealth and income are equally distributed.F) A) and D)
G) A) and E) D

Question 20

With a negative income tax that has a $10,000 guaranteed minimum income and a 25 percent tax rate,a household that has earned income of $16,000 has a total income of

Accepted Answer

A)   $16,000.
B)   $22,000.
C)   $26,000.
D)   $24,000.
E)   $10,000.F) B) and C)
G) C) and D)

Exam 20: Economic Inequality

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

Correct Answer
verified

Correct Answer
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Correct Answer
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-The figure above shows the market for high and low-skilled labor.Supply curve SB represents the supply of labor because .

Correct Answer
verified

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?

Correct Answer
verified
E

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

Correct Answer
verified

In the United States in 2010,a family of four was considered to be living below the poverty line only if its household income was less than approximately

Correct Answer
verified

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

Correct Answer
verified

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 compensation for the cost of acquiring the skill creates the difference between the curves and .

Correct Answer
verified

A tax is progressive if the average tax rate

Correct Answer
verified

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,if the cost of acquiring the skill decreased,then the

Correct Answer
verified

-In the figure above,the nation with the highest average income is nation

Correct Answer
verified

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

Correct Answer
verified

The figure above shows Lorenz curves for a nation -Based on the figure above,

Correct Answer
verified

In the United States,the federal and state income tax system is

Correct Answer
verified

The figure above shows Lorenz curves for a nation -Based on the figure above,if the poorest 20 percent group of households increased the share of the nation's income they receive,then

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
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A

Which of the following is correct about the United States?

Correct Answer
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D

With a negative income tax that has a $10,000 guaranteed minimum income and a 25 percent tax rate,a household that has earned income of $16,000 has a total income of

Correct Answer
verified

Exam 20: Economic Inequality

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

-The figure above shows the market for high and low-skilled labor.Supply curve SB represents the supply of ________ labor because ________.

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedE

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

Correct AnswerverifiedShow Answer

In the United States in 2010,a family of four was considered to be living below the poverty line only if its household income was less than approximately

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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 compensation for the cost of acquiring the skill creates the difference between the ________ curves and ________.

Correct AnswerverifiedShow Answer

A tax is progressive if the average tax rate

Correct AnswerverifiedShow Answer

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,if the cost of acquiring the skill decreased,then the

Correct AnswerverifiedShow Answer

-In the figure above,the nation with the highest average income is nation

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The figure above shows Lorenz curves for a nation -Based on the figure above,

Correct AnswerverifiedShow Answer

In the United States,the federal and state income tax system is

Correct AnswerverifiedShow Answer

The figure above shows Lorenz curves for a nation -Based on the figure above,if the poorest 20 percent group of households increased the share of the nation's income they receive,then

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedA

Which of the following is correct about the United States?

Correct AnswerverifiedD

With a negative income tax that has a $10,000 guaranteed minimum income and a 25 percent tax rate,a household that has earned income of $16,000 has a total income of

Correct AnswerverifiedShow Answer

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-The figure above shows the market for high and low-skilled labor.Supply curve SB represents the supply of labor because .

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E

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

Correct Answer
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Correct Answer
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Correct Answer
verified

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 compensation for the cost of acquiring the skill creates the difference between the curves and .

Correct Answer
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A

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D

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