Ch. 15 CC Quiz
Suppose that the average income of the average person in the richest 20% of citizens of Japan is $130,000. What is the average income of a person who is among the poorest 20% of citizens in Japan?
$24,074
Suppose that the income of the average person in the poorest 20% of citizens in Namibia is $2,000. What is the average income of a person who is among the richest 20% of citizens?
$39,200
Which of the following statements is true?
A high income inequality ratio can occur if the income of high-income earners is much greater than the income of others.
Which country has greater inequality, Brazil, Namibia, or Japan?
Namibia
Efficiency wages are set
above the equilibrium wage and create a surplus of labor.
The income inequality ratio can be used to determine how much more income the top 20% of households has compared to
any quintile of households.
One condition of wage equality is that
each worker must have the same skills, ability, and productivity.
Which of the following is a nonmonetary determinant of wages?
efficiency wages
Wage discrimination exists when individuals of __________ are paid different wage rates.
equal ability and productivity
Assume that the government imposes a 30% tax on your income and deducts $8,000 from those taxes. Under a negative income tax scheme, if you earn $30,000 a year, you will
have a tax liability of $1,000.
Students who choose to attend graduate or medical school are often rewarded with higher wages because they have acquired more
human capital.
Which of the following causes difficulty when measuring income inequality?
in-kind transfers
The Lorenz curve is a graph of the __________ of the population.
income distribution
Someone in the bottom 20% of income-earners who has a greater chance of income mobility than the other poor must be
marginal poor.
Wage discrimination and the earnings gap are often misinterpreted because
of human capital differences between new entrants and mid-career workers.
Baseball player Alex Rodriguez made $27.5 million during 2007. This large disparity in salary compared to the average baseball player in the major league is because
of marginal differences in talent.
The poverty _______________is defined as the percentage of the population whose income is below the poverty threshold.
rate
Welfare is a _________ that helps the poor by supplementing their income with ________.
series of initiatives; subsidies, vouchers, and health services
Which country has a lower poverty rate, the United States or Japan?
the United States
When comparing the income inequality ratio (top 20%/bottom 20%) across nations, we can say that the United States has a lower ratio compared to Namibia because
there are more low-income earners in the Namibia.