Question 1

The demand curve for high- skilled labour lies to the right of the demand curve for low- skilled labour because

Accepted Answer

A)   high- skilled workers require more compensation to convince them to work than do low- skilled workers.
B)   there are more high- skilled workers than low- skilled workers.
C)   high- skilled labour is more productive than low- skilled labour.
D)   firms need not be concerned with the minimum wage in the market for high- skilled labour.E) B) and C)
F) A) and D)

Question 2

-In the figure above, the poorest 40 per cent of all households receive what share of income?

Accepted Answer

A)   60 per cent
B)   10 per cent
C)   20 per cent
D)   40 per centE) B) and D)
F) All of the above

Question 3

-In the above figure, point _______ shows an equal distribution of income, while point shows an unequal distribution of income.

Accepted Answer

A)   b; a
B)   a; d
C)   a; b
D)   b; cE) C) and D)
F) B) and C)

Question 4

Discrimination _______ the group being discriminated against and _______ the group being favoured.

Accepted Answer

A)   decreases the demand for; increases the demand for
B)   increases the demand for; decreases the demand for
C)   increases the supply of; decreases the supply of
D)   decreases the supply of; increases the supply ofE) All of the above
F) A) and B) A

Question 5

A Lorenz curve measures

Accepted Answer

A)   the benefits received through welfare programs.
B)   the actual income distribution and compares it to an equal income distribution.
C)   the effect of flat taxes on income distribution.
D)   the degree to which income taxes are regressive.E) B) and C)
F) C) and D)

Question 6

Which of the following statements is true?

Accepted Answer

A)   Both wealth and income measure variables over a period of time.
B)   Wealth measures a variable over a period of time, and income measures a variable at a point in time.
C)   Wealth measures a variable at a point in time and income measures a variable over a period of time.
D)   Both wealth and income measure variables at a point in time.E) None of the above
F) A) and B)

Question 7

With respect to redistribution, one reason the "big tradeoff" exists is because

Accepted Answer

A)   redistribution weakens the incentive to work.
B)   government policymakers must choose between funding the various programs.
C)   government programs only employ resources that had no value to society otherwise.
D)   low- income households do not pay enough taxes.E) B) and C)
F) B) and D) A

Question 8

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

Question 9

-In the above table, which tax plan is proportional?

Accepted Answer

A)   Only plan A
B)   Only plan B
C)   Only plan C
D)   Both plan A and plan CE) A) and B)
F) B) and D)

Question 10

Computers and laser scanners are _______ for low- skilled labour and _______ for high- skilled labour. The introduction of these technologies _______ the wage rate of high- skilled workers and _______
The wage rate of low- skilled workers.

Accepted Answer

A)   substitutes; complements; raises; lowers
B)   complements; substitutes; raises; lowers
C)   complements; substitutes; lowers; raises
D)   substitutes; complements; lowers; raisesE) A) and B)
F) None of the above

Question 11

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

Accepted Answer

A)   the first quintile earns less income than the first quintile earned in
B)   the fifth quintile earns more income than the fifth quintile earned in
C)   income is less equally distributed than the income shown in
D)   income is more equally distributed than the income shown inE) A) and B)
F) A) and C)

Question 12

Albert, Betty and Cecile live in Norland. Their annual incomes and the amounts they pay in income tax are shown in the table below.  The income tax in Norland is

Accepted Answer

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

Question 13

From left to right, the horizontal axis of the Lorenz curve ranks households from

Accepted Answer

A)   smallest to largest.
B)   poorest to richest.
C)   richest to poorest.
D)   largest to smallest.E) B) and C)
F) A) and D)

Question 14

-In the figure above, income

Accepted Answer

A)   is most equally distributed in country A.
B)   is most equally distributed in country B.
C)   is most equally distributed in country C.
D)   is equally distributed in all three countries.E) B) and C)
F) A) and C)

Question 15

Income is distributed very unequally in _______ and relatively more equally in _______.

Accepted Answer

A)   Australia and South Africa; Brazil and Canada
B)   Brazil and South Africa; Australia and Canada
C)   Brazil and Canada; Australia and South Africa
D)   Australia and Canada; Brazil and South AfricaE) A) and B)
F) None of the above

Question 16

Country A has a more equal distribution of income than country B if

Accepted Answer

A)   country A's Lorenz curve is closer to the line of equality than is country B's Lorenz curve.
B)   country A's Lorenz curve is just as close to the line of equality as is country B's Lorenz curve.
C)   country B's Lorenz curve is closer to the line of equality than is country A's Lorenz curve.
D)   None of the above because it is impossible to compare income inequalities across countries.E) A) and C)
F) None of the above

Question 17

The closer an income Lorenz curve is to the line of equality, the

Accepted Answer

A)   faster income is growing.
B)   less equally income is distributed.
C)   more equally income is distributed.
D)   slower income is growing.E) B) and C)
F) None of the above

Question 18

The distribution of income in Australia is characterised by the following relationship between the mean, median and mode incomes:

Accepted Answer

A)   mode income 
B)   median income 
C)   mode income 
D)   mean income < median income < mode income.E) All of the above
F) C) and D)

Question 19

Consider the country of Inland. In Inland, people's average tax rates decrease with the level of income. Inland has a _______ tax structure.

Accepted Answer

A)   regressive
B)   progressive
C)   proportional
D)   flat- rateE) B) and C)
F) A) and C)

Question 20

If customer discrimination does not exist, firms that discriminate on the basis of race or sex will

Accepted Answer

A)   tend to survive whereas firms that do not discriminate will tend to fail.
B)   have lower costs than those that do not.
C)   have higher costs than those that do not.
D)   have the same level of costs as those that do not.E) A) and B)
F) All of the above C

Exam 11: Economic Inequality

The demand curve for high- skilled labour lies to the right of the demand curve for low- skilled labour because

Correct AnswerverifiedShow Answer

-In the figure above, the poorest 40 per cent of all households receive what share of income?

Correct AnswerverifiedShow Answer

-In the above figure, point _______ shows an equal distribution of income, while point shows an unequal distribution of income.

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Discrimination _______ the group being discriminated against and _______ the group being favoured.

Correct AnswerverifiedA

A Lorenz curve measures

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Which of the following statements is true?

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With respect to redistribution, one reason the "big tradeoff" exists is because

Correct AnswerverifiedA

-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

Correct AnswerverifiedShow Answer

-In the above table, which tax plan is proportional?

Correct AnswerverifiedShow Answer

Computers and laser scanners are _______ for low- skilled labour and _______ for high- skilled labour. The introduction of these technologies _______ the wage rate of high- skilled workers and _______ The wage rate of low- skilled workers.

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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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Albert, Betty and Cecile live in Norland. Their annual incomes and the amounts they pay in income tax are shown in the table below. The income tax in Norland is

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From left to right, the horizontal axis of the Lorenz curve ranks households from

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-In the figure above, income

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Income is distributed very unequally in _______ and relatively more equally in _______.

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Country A has a more equal distribution of income than country B if

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The closer an income Lorenz curve is to the line of equality, the

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The distribution of income in Australia is characterised by the following relationship between the mean, median and mode incomes:

Correct AnswerverifiedShow Answer

Consider the country of Inland. In Inland, people's average tax rates decrease with the level of income. Inland has a _______ tax structure.

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If customer discrimination does not exist, firms that discriminate on the basis of race or sex will

Correct AnswerverifiedC

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Discrimination _ the group being discriminated against and _ the group being favoured.

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A

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A

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Computers and laser scanners are ___ for low- skilled labour and _ for high- skilled labour. The introduction of these technologies _ the wage rate of high- skilled workers and ___ The wage rate of low- skilled workers.

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Income is distributed very unequally in _ and relatively more equally in _.

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C