Ch. 11: Microeconomics
In a single year the young and old receive _______________ incomes while the middle-aged receive ________________ even if everyone receives the same income stream over their lifetimes.
Blank 1: low Blank 2: high
Which of the following harms individuals and reduces society's overall output and income?
Discrimination
Which of the following contributes to differences in individuals' capacities to earn income?
Education levels
Which of the following are major explanations for the growing income inequality in the U.S. since 1975?
Import competition in products that require less-skilled workers Tendency of people with high earnings potential to marry each other Increase in the number of households headed by single or divorced women
Which of the following are factors that contribute to income inequality in the United States?
Luck and misfortune Education and training Differences in preferences for work and risks Market power
What are the effects of discrimination?
Society's overall income falls. Society's overall output falls. It harms individuals.
True or false: Employers will select candidates with more education for on-the-job training.
True
True or false: In 2016, the poverty rate for African Americans was 22% .
True
True or false: The diagonal line in a Lorenz curve represents a case where any given percentage of households in a nation receives that same percentage of the nation's total income.
True
Since 1975, income distribution in the United States has
become more unequal.
Unionism in the United States in the past three decades has been
declining
The outsourcing of low-skilled jobs to developing countries has contributed to a __________________ in the wages of less-skilled workers in the United States.
decrease
If some income is taken away from a high-income individual, then that person's total utility will ___ and marginal utility of income will _____.
decrease; increase
Differences in the amount of _________________ and training that individuals acquire influences their capacity to earn income.
education
If the government levies a 100 percent tax on all income, then this will _____ the rewards from increased productive effort.
eliminate
Total combined utility is greatest when the marginal utilities of the last dollar of income are ______________
equal
Unions tend to ____ pay within firms and industries.
equalize
As of 2016, which group had the highest poverty rate?
female householders
The utility gained by a low income individual is _____________ than the utility lost by a high income individual when income is redistributed.
greater
Redistribution of income from high income individuals to low income individuals results in:
greater combined total utility
One demographic change that contributed to the relatively faster increase in incomes among the highest income quintiles is the
growing tendency for men and women with high earnings potential to marry each other.
Through on-the-job training, employees can experience significant growth in their
income
The basic argument for an equal distribution of income is that
income equality maximizes total consumer utility in society.
If some additional income is given to an individual, then that person's total utility will ___ and marginal utility will ____.
increase; decrease
From 1980 to 2007, the wage differential between college graduates and high school graduates in the US:
increased substantially
Which of the following are associated with "rigging the market"?
monopoly power strong labor union professional licensing
The income distribution over a 1-year period, compared to that over a 10-year period, tends to be ___________
more unequal
An increasing Gini ratio suggests that the income distribution in a nation is becoming
more unequal.
Among African Americans and Hispanics, the percentages who live in poverty are ______ the average for the entire population.
much higher than
One economic function of the government in our society is to
redistribute income.
The ________________ (greater/smaller) the difference between the diagonal line and the Lorenz curve, the less income inequality that exists in the economy.
smaller
The diagonal line in a Lorenz curve indicates
the percentage of households receives the same percentage of income
Which of the following are tools by which the government redistributes income in the society?
transfer payments taxes in-kind transfers
The bigger the area between the Lorenz curve and the diagonal line, the more ______________ (equal/unequal) is the distribution of income in the nation.
unequal
One factor that has contributed to the growing income inequality in the United States is the
upsurge in the immigration of unskilled workers
