eco chapter 20 exam 3

value of marginal product.

Discrimination by customers creates a wage differential between two groups by creating a difference in the two groups' supply of labor. value of marginal product. marginal cost of labor. minimum wage. opportunity cost of acquiring skills.

more than 30 percent

In 2004 the wealthiest 1 percent of all U.S. households owned what percentage of total wealth? more than 30 percent less than 10 percent more than 40 percent more than 50 percent more than 45 percent

46

In the United States in 2010, the Census Bureau determined that approximately ________ million Americans lived in households that had incomes below the poverty line. 46 22 84 11 112

increased; decreased

In the United States since 1970, the share of money income received by the richest 20 percent of households has ________ and the share of income received by the lowest 20 percent of households has ________. increased; not changed not changed; increased not changed; decreased decreased; increased increased; decreased

Lorenz curve for income is closer to the line of equality than is the Lorenz curve for wealth.

In the United States, the distribution of income has become more equal since 1970. Lorenz curve for income and the Lorenz curve for wealth are equally close to the line of equality. Lorenz curve for income is closer to the line of equality than is the Lorenz curve for wealth. Lorenz curve for wealth is closer to the line of equality than is the Lorenz curve for income. None of these answers is correct.

progressive.

In the United States, the federal and state income tax system is progressive. proportional. regressive. a flat-rate tax. None of these answers is correct.

3.3

In the United States, the poorest 20 percent of the household receive approximately ________ percent of total money income. 3.3 9.5 11.8 17.6 20.0

the highest 20 percent increased its share of income.

Looking at the income distribution in the United States since 1970, we see that only the lowest 20 percent and highest 20 percent increased their shares of income. the lower 50 percent increased its share of income and the upper 50 percent stayed the same. the highest 20 percent increased its share of income. all the 20 percent groups increased their shares of income. the lower 50 percent increased its share of income and the upper 50 percent decreased its share of income.

has decreased.

Looking at wage differentials between white women and white men in the United States since 2000, we see that the amount of the difference has not changed. has increased. has decreased. at first increased but in the last decade it decreased. at first decreased but in the last decade it increased.

region of the country.

Of the following major characteristics that lead to income disparity, the factor with the smallest impact is sex. race. region of the country. education. number of people in the household.

$5 per hour.

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 $25 per hour. $15 per hour. $10 per hour. $5 per hour. $0 per hour because Pete is being paid a wage.

both redistribute income.

Social Security and unemployment compensation are paid only to the poorest households. are both funded by income taxes. are distributed by individual states. both redistribute income. make the distribution of income less equal.

compulsory; payroll taxes

Social Security is a ________ program paid for by ________. compulsory; payroll taxes compulsory; government money voluntary; payroll taxes voluntary; income taxes compulsory; voluntary taxes on income

progressive; larger

Suppose a government of LaLa Land imposes the following tax rates on its citizens. The government has imposed a ________ tax system because its citizens will pay a ________ portion of their income as taxes as incomes increase. progressive; larger progressive; smaller regressive; larger regressive; smaller proportional; larger

compensation the high-skilled worker requires for the cost of acquiring the skill.

Suppose a supply curve for high-skilled labor is drawn in the same graph as a supply curve for low-skilled labor. The vertical distance between these two curves represents the wage rate paid to a high-skilled worker. wage rate paid to a low-skilled worker. compensation the high-skilled worker requires for the cost of acquiring the skill. number of high-skill workers that will be hired. difference in the value of marginal product between the high-skilled workers and the low-skilled workers.

vertical; compensation for cost of acquiring skill

The ________ distance between the supply curve of low-skilled labor and the supply curve of high-skilled labor is the ________. horizontal; value of marginal product of skill horizontal; compensation for cost of acquiring skill vertical; value of marginal product of skill vertical; compensation for cost of acquiring skill vertical; difference in the price of the product produced by high-skilled labor minus the price of the product produced by low-skilled labor

Country Alpha has a more equal distribution of income than does Country Beta.

The above table shows the distribution of income in two countries, Alpha and Beta. Based on these distributions of income, Country Beta has more equal income distribution than does Country Alpha. both countries have equal distributions because 100 percent of the incomes are accounted for. the Lorenz Curve for country Beta is closer to the line of equality. Country Alpha has a more equal distribution of income than does Country Beta. It is impossible to answer the question without more information.

supply of high-skilled workers is different from the supply of low-skilled workers.

The cost of acquiring a skill accounts for why the demand for high-skilled workers is different from the demand for low-skilled workers. supply of high-skilled workers is different from the supply of low-skilled workers. demand for high-skilled workers is different from the supply of high-skilled workers. demand for high-skilled workers is different from the supply of low-skilled workers. supply curves of high-skilled and low-skilled workers cross.

lies to the right of the demand curve for low-skilled workers.

The demand curve for high-skilled workers lies to the right of the demand curve for low-skilled workers. lies to the left of the demand curve for low-skilled workers. is vertical. is horizontal. lies to the right of the demand curve for low-skilled workers at high wages and to the left of the demand curve for low-skilled workers at low wages.

above; above

The demand curve for high-skilled workers lies ________ the demand curve for low-skilled workers and the supply curve of high-skilled workers lies ________ the supply curve of low-skilled workers. above; above above; below below; above below; below above; on

the Lorenz curve for income shows that the richest 20 percent of households receive about 50 percent of the nation's income.

The figure above shows Lorenz curves for a nation. Based on the figure above, wealth is distributed more equally than income. the Lorenz curve for wealth shows that the poorest 40 percent of households receive about 40 percent of the nation's wealth. average income exceeds average wealth. average wealth exceeds average income. the Lorenz curve for income shows that the richest 20 percent of households receive about 50 percent of the nation's income.

the Lorenz curve for income shifts toward the line of equality.

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 there is a movement up along the Lorenz curve for income. there is a movement down along the Lorenz curve for income. the Lorenz curve for income shifts toward the line of equality. the Lorenz curve for income shifts away from the line of equality. Both answers there is a movement up along the Lorenz curve for income and the Lorenz curve for income shifts toward the line of equality are correct.

SH curve shifts rightward.

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 SL curve shifts leftward. SH curve shifts leftward. SH curve shifts rightward. DH curve shifts leftward. DL curve shifts leftward.

high-skilled; these workers must receive higher pay in return for acquiring their skills

The figure above shows the market for high and low-skilled labor. Supply curve SB represents the supply of ________ labor because ________. high-skilled; these workers must receive higher pay in return for acquiring their skills high-skilled; firms supply more jobs for high-skilled workers low-skilled; low-skilled labor must work more hours to compensate for their lower wage low-skilled; firms supply fewer jobs for low-skilled labor low-skilled; low-skilled labor has a lower value of marginal product

overstates the amount of lifetime inequality.

The inequality of annual income overstates the amount of lifetime inequality. understates the amount of lifetime inequality. cannot change from one year to the next. is about the same as the amount of lifetime inequality. cannot be compared to the amount of lifetime inequality.

greater the wage differential between high-skilled and low-skilled workers.

The more costly it is to acquire a skill, the more people will go to school to learn the skill. less employers are willing to pay for the skill. greater the wage differential between high-skilled and low-skilled workers. smaller the wage differential between high-skilled and low-skilled workers. more the demand for workers with that skill exceeds the demand for workers without that skill.

95 percent

The table gives the distribution of income in Miseria. What percent of income is earned by the richest 80 percent of the population? 25 percent 95 percent 100 percent 5 percent More information is needed to answer the question.

70 percent

The table gives the distribution of income in Miseria. What percent of income is earned by the richest forty percent? 5 percent 20 percent 70 percent 55 percent More information is needed to answer the question.

greater than

The wage rate that high-skilled workers receive is ________ the wage rate that low-skill workers receive. greater than or equal to equal to less than or equal to greater than less than

i, ii, and iii

Which of the following is a way income is redistributed in the United States? i only ii only ii and iii i and iii i, ii, and iii

i only

Which of the following statements about poverty is (are) correct? i only ii only iii only ii and iii i, ii, and iii

$22,000.

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 $16,000. $22,000. $26,000. $24,000. $10,000.