Question 1

The top quintile of income earners would be those whose income is

Accepted Answer

A)  in the highest 5 percent. 
B)  in the lowest 20 percent. 
C)  in the highest 20 percent. 
D)  higher than the lowest 20 percent of households. 
A)  in the highest 5 percent. 
B)  in the lowest 20 percent. 
C)  in the highest 20 percent. 
D)  higher than the lowest 20 percent of households.

Question 2

The possible increase in rent-seeking behavior is a __________ argument __________ government intervention to reduce inequality.

Accepted Answer

A)  fairness-based; against 
B)  political; against 
C)  growth-based; in favor of 
D)  data-based; against 
A)  fairness-based; against 
B)  political; against 
C)  growth-based; in favor of 
D)  data-based; against

Question 3

Dividing the number of households making over $80,000 by the number of households making less than $20,000 will produce the 80/20 ratio.

Accepted Answer

A) True 
 B)False

Question 4

Suppose an income tax is imposed that takes $2,000 from someone with an income of $20,000,$2,500 from someone with an income of $30,000,and $4,000 from someone with an income of $80,000.This tax would be classified as

Accepted Answer

A)  proportional. 
B)  regressive. 
C)  progressive. 
D)  a flat tax. 
A)  proportional. 
B)  regressive. 
C)  progressive. 
D)  a flat tax.

Question 5

Discrimination in the workplace results when

Accepted Answer

A)  people who are less productive are paid less than those who are more productive. 
B)  employers pay people a higher wage if they are better educated. 
C)  one person is paid less or treated worse on the job than an equally qualified person because of his or her race, gender, or some other characteristics. 
D)  employers refuse to hire someone who is an illegal immigrant. 
A)  people who are less productive are paid less than those who are more productive. 
B)  employers pay people a higher wage if they are better educated. 
C)  one person is paid less or treated worse on the job than an equally qualified person because of his or her race, gender, or some other characteristics. 
D)  employers refuse to hire someone who is an illegal immigrant.

Question 6

Your textbook mentions four arguments against government intervention to reduce inequality.List any three of these.

Accepted Answer

The list should include any three of the

Question 7

The percentage of U.S.citizens living in poverty is actually higher today than it was for most of the 1970s.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following statements about the minimum wage is true?

Accepted Answer

A)  The minimum wage has not had any impact on income inequality. 
B)  Adjusting for inflation, the real minimum wage has fallen in the last 30 years. 
C)  Because the minimum wage has been increased many times in the last 30 years, income inequality is now lower than it was in the mid-20th century. 
D)  The minimum wage tends to create inflation, which benefits the wealthy more than the poor. 
A)  The minimum wage has not had any impact on income inequality. 
B)  Adjusting for inflation, the real minimum wage has fallen in the last 30 years. 
C)  Because the minimum wage has been increased many times in the last 30 years, income inequality is now lower than it was in the mid-20th century. 
D)  The minimum wage tends to create inflation, which benefits the wealthy more than the poor.

Question 9

Suppose an income tax is imposed that takes $1,000 from someone with an income of $20,000; $4,000 from someone with an income of $30,000; and $12,000 from someone with an income of $80,000.This tax would be classified as

Accepted Answer

A)  regressive. 
B)  proportional. 
C)  progressive. 
D)  a flat tax. 
A)  regressive. 
B)  proportional. 
C)  progressive. 
D)  a flat tax.

Question 10

Which of the following is a theoretically possible value for the 80/20 ratio?

Accepted Answer

A)  -1. 
B)  0. 
C)  0.5. 
D)  1,000. 
A)  -1. 
B)  0. 
C)  0.5. 
D)  1,000.

Question 11

In a "superstar economy," companies try to find only the very best talent.What effect has this had on labor markets?

Accepted Answer

A)  There is a widening gap in income between people who are competent and people who are the very best. 
B)  Unemployment tends to increase because one top employee may replace two or three less competent employees. 
C)  The income gap has narrowed as the "superstars" come up with ideas to produce in ways that boost the pay of lower-income workers. 
D)  Per capita income has dropped because the "superstars" tend to save, rather than spend, their large salaries. 
A)  There is a widening gap in income between people who are competent and people who are the very best. 
B)  Unemployment tends to increase because one top employee may replace two or three less competent employees. 
C)  The income gap has narrowed as the "superstars" come up with ideas to produce in ways that boost the pay of lower-income workers. 
D)  Per capita income has dropped because the "superstars" tend to save, rather than spend, their large salaries.

Question 12

People tend to earn higher incomes as they mature and gain experience in the workforce.As a consequence of this income mobility,

Accepted Answer

A)  statistics on income may understate inequality. 
B)  redistribution from high-income individuals to low-income individuals may encourage innovation and economic growth. 
C)  statistics on income may overstate inequality. 
D)  the overall poverty rate may rise as the population ages. 
A)  statistics on income may understate inequality. 
B)  redistribution from high-income individuals to low-income individuals may encourage innovation and economic growth. 
C)  statistics on income may overstate inequality. 
D)  the overall poverty rate may rise as the population ages.

Question 13

If a household earning $50,000 annually pays $10,000 in taxes while a household earning $100,000 annually pays $25,000 in taxes,then the tax system is

Accepted Answer

A)  regressive. 
B)  progressive. 
C)  neither regressive nor progressive. 
D)  both regressive and progressive. 
A)  regressive. 
B)  progressive. 
C)  neither regressive nor progressive. 
D)  both regressive and progressive.

Question 14

Adjusting for inflation,the real minimum wage has fallen over the last 30 years.

Accepted Answer

A) True 
 B)False

Question 15

Why might education differences better explain the differences in income between whites and Hispanics than between men and women?

Accepted Answer

There is a much greater disparity in edu

The top quintile of income earners would be those whose income is

The possible increase in rent-seeking behavior is a argument government intervention to reduce inequality.

Dividing the number of households making over $80,000 by the number of households making less than $20,000 will produce the 80/20 ratio.

Suppose an income tax is imposed that takes $2,000 from someone with an income of $20,000,$2,500 from someone with an income of $30,000,and $4,000 from someone with an income of $80,000.This tax would be classified as

Discrimination in the workplace results when

Your textbook mentions four arguments against government intervention to reduce inequality.List any three of these.

The percentage of U.S.citizens living in poverty is actually higher today than it was for most of the 1970s.

Which of the following statements about the minimum wage is true?

Suppose an income tax is imposed that takes $1,000 from someone with an income of $20,000; $4,000 from someone with an income of $30,000; and $12,000 from someone with an income of $80,000.This tax would be classified as

Which of the following is a theoretically possible value for the 80/20 ratio?

In a "superstar economy," companies try to find only the very best talent.What effect has this had on labor markets?

People tend to earn higher incomes as they mature and gain experience in the workforce.As a consequence of this income mobility,

If a household earning $50,000 annually pays $10,000 in taxes while a household earning $100,000 annually pays $25,000 in taxes,then the tax system is

Adjusting for inflation,the real minimum wage has fallen over the last 30 years.

Why might education differences better explain the differences in income between whites and Hispanics than between men and women?

Introduction

Demand and Supply: The Basics of the Market Economy

Market Equilibrium and Shifts

How Businesses Work

Competition and Market Power

Government and the Economy

The First Step Into Macroeconomics

Inflation

Growth

Business Cycles, unemployment and Inflation

Fiscal Policy

Monetary Policy

The Financial Markets

International Trade

Technological Change

Economics of the Labor Market

Economics of Retirement and Healthcare

Economics of Energy, the Environment, and Global Climate Change Glossary

Filters

Exam 17: The Distribution of Income

The top quintile of income earners would be those whose income is

The possible increase in rent-seeking behavior is a __________ argument __________ government intervention to reduce inequality.

Dividing the number of households making over $80,000 by the number of households making less than $20,000 will produce the 80/20 ratio.

Suppose an income tax is imposed that takes $2,000 from someone with an income of $20,000,$2,500 from someone with an income of $30,000,and $4,000 from someone with an income of $80,000.This tax would be classified as

Discrimination in the workplace results when

Your textbook mentions four arguments against government intervention to reduce inequality.List any three of these.

The percentage of U.S.citizens living in poverty is actually higher today than it was for most of the 1970s.

Which of the following statements about the minimum wage is true?

Suppose an income tax is imposed that takes $1,000 from someone with an income of $20,000; $4,000 from someone with an income of $30,000; and $12,000 from someone with an income of $80,000.This tax would be classified as

Which of the following is a theoretically possible value for the 80/20 ratio?

In a "superstar economy," companies try to find only the very best talent.What effect has this had on labor markets?

People tend to earn higher incomes as they mature and gain experience in the workforce.As a consequence of this income mobility,

If a household earning $50,000 annually pays $10,000 in taxes while a household earning $100,000 annually pays $25,000 in taxes,then the tax system is

Adjusting for inflation,the real minimum wage has fallen over the last 30 years.

Why might education differences better explain the differences in income between whites and Hispanics than between men and women?

Introduction

Demand and Supply: The Basics of the Market Economy

Market Equilibrium and Shifts

How Businesses Work

Competition and Market Power

Government and the Economy

The First Step Into Macroeconomics

Inflation

Growth

Business Cycles, unemployment and Inflation

Fiscal Policy

Monetary Policy

The Financial Markets

International Trade

Technological Change

Economics of the Labor Market

Economics of Retirement and Healthcare

Economics of Energy, the Environment, and Global Climate Change Glossary

Filters

The possible increase in rent-seeking behavior is a argument government intervention to reduce inequality.