Deck 20: Economic Inequality

Question 1

In the United States,the poorest 20 percent of households receive about ________ percent of total money income while the richest 20 percent receive about ________ percent of total money income.

A) 3; 50
B) 8; 71
C) 12.; 32
D) 13; 68
E) 20; 20

Answer 1

3; 50

Question 2

$$\begin{array} { | c | c | } \hline \text { Group } & \begin{array} { c } \text { Percent of } \\\text { income }\end{array} \\\hline \text { Poorest } 20 \% & 5 \\\hline \text { Second poorest } 20 \% & 10 \\\hline \text { Middle } 20 \% & 15 \\\hline \text { Second richest } 20 \% & 25 \\\hline \text { Richest } 20 \% & 45 \\\hline\end{array}$$
The table gives the distribution of income in Mise

-What percent of income is earned by the richest 80 percent of the population?

A) 25 percent
B) 95 percent
C) 100 percent
D) 5 percent
E) More information is needed to answer the question.

Answer 2

95 percent

Question 3

$$\begin{array} { l c c } { \begin{array} { l } \text { Household } \\\text { percentage }\end{array} } & \begin{array} { c } \text { Percent of } \\\text { income } \\\text { Alpha }\end{array} & \begin{array} { c } \text { Percent of } \\\text { income } \\\text { Beta }\end{array} \\\hline \text { Lowest 20 percent } & 9 & 5 \\\text { Second 20 percent } & 10 & 5 \\\text { Third 20 percent } & 12 & 10 \\\text { Fourth 20 percent } & 29 & 20 \\\text { Highest 20 percent } & 40 & 60 \\\hline\end{array}$$

-The above table shows the distribution of income in two countries,Alpha and Beta.In Country Beta,the richest 40 percent of households receive ________ percent of total income.

A) 20
B) 40
C) 60
D) 80
E) 100

Answer 3

80

Question 4

As a tool that is used to measure inequality in the distribution of income,the Lorenz curve graphs

A) the cumulative percentage of money income against the cumulative percentage of households.
B) the percentage of total money income received by each given percentage of households.
C) the mean income, median income, and mode income against the percentage of households.
D) the mean money income received by households over time.
E) the cumulative percentage of money income against the mean and median money income.

Question 5

$$\begin{array} { l c c } { \begin{array} { l } \text { Household } \\\text { percentage }\end{array} } & \begin{array} { c } \text { Percent of } \\\text { income } \\\text { Alpha }\end{array} & \begin{array} { c } \text { Percent of } \\\text { income } \\\text { Beta }\end{array} \\\hline \text { Lowest 20 percent } & 9 & 5 \\\text { Second 20 percent } & 10 & 5 \\\text { Third 20 percent } & 12 & 10 \\\text { Fourth 20 percent } & 29 & 20 \\\text { Highest 20 percent } & 40 & 60 \\\hline\end{array}$$

-The above table shows the distribution of income in two countries,Alpha and Beta.Based on these distributions of income,

A) Country Beta has more equal income distribution than does Country Alpha.
B) both countries have equal distributions because 100 percent of the incomes are accounted for.
C) the Lorenz Curve for country Beta is closer to the line of equality.
D) Country Alpha has a more equal distribution of income than does Country Beta.
E) It is impossible to answer the question without more information.

Question 6

In 2004 the wealthiest 1 percent of all U.S.households owned what percentage of total wealth?

A) more than 30 percent
B) less than 10 percent
C) more than 40 percent
D) more than 50 percent
E) more than 45 percent

Question 7

In the United States,the richest 20 percent of households receive approximately ________ percent of total money income.

A) 33
B) 12
C) 50
D) 75
E) 20

Question 8

In the United States,the poorest 20 percent of the household receive approximately ________ percent of total money income.

A) 3.3
B) 9.5
C) 11.8
D) 17.6
E) 20.0

Question 9

Lorenz curves are

A) horizontal.
B) vertical.
C) upward sloping.
D) downward sloping.
E) straight lines.

Question 10

If the Lorenz curve for income moves upward toward the 45° line,then the

A) distribution of income has become more unequal.
B) distribution of income has become more equal.
C) mean (average) household income increased.
D) total household income increased.
E) total household income decreased.

Question 11

If all households in a nation receive the same income,the nation's Lorenz curve

A) is horizontal.
B) is vertical.
C) is a 45° line.
D) runs along the horizontal axis until it reaches 50 percent of households and then runs vertically up to 100 percent of income.
E) runs along the horizontal axis until it reaches 100 percent of households and then runs vertically up to 100 percent of income.

Question 12

A Lorenz curve for income shows the

A) demand for Lorenz cough drops.
B) average income graphed against the average number of people in the household.
C) cumulative percentage of income graphed against cumulative percentage of households.
D) relationship between income and wealth.
E) total amount of income graphed against the total number of households.

Question 13

Which of the following statements is true regarding the distribution of income in the United States?

A) The Lorenz curve shows that incomes are distributed fairly.
B) The line of equality shows that incomes are distributed equally.
C) The inequality in the distribution of income can be seen because the Lorenz curve lies below the line of equality.
D) The inequality in the distribution of income can be seen because the Lorenz curve lies above the line of equality.
E) Both answers A and B are correct.

Question 14

$$\begin{array} { l c c } { \begin{array} { l } \text { Household } \\\text { percentage }\end{array} } & \begin{array} { c } \text { Percent of } \\\text { income } \\\text { Alpha }\end{array} & \begin{array} { c } \text { Percent of } \\\text { income } \\\text { Beta }\end{array} \\\hline \text { Lowest 20 percent } & 9 & 5 \\\text { Second 20 percent } & 10 & 5 \\\text { Third 20 percent } & 12 & 10 \\\text { Fourth 20 percent } & 29 & 20 \\\text { Highest 20 percent } & 40 & 60 \\\hline\end{array}$$

-The above table shows the distribution of income in two countries,Alpha and Beta.In Country Alpha,the poorest 20 percent receive ________ percent of total income.

A) 5
B) 9
C) 1
D) 19
E) 14

Question 15

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

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

Question 16

$$\begin{array} { | c | c | } \hline \text { Group } & \begin{array} { c } \text { Percent of } \\\text { income }\end{array} \\\hline \text { Poorest } 20 \% & 5 \\\hline \text { Second poorest } 20 \% & 10 \\\hline \text { Middle } 20 \% & 15 \\\hline \text { Second richest } 20 \% & 25 \\\hline \text { Richest } 20 \% & 45 \\\hline\end{array}$$
The table gives the distribution of income in Mise

-What percent of income is earned by the richest 60 percent of the population?

A) 25 percent
B) 30 percent
C) 55 percent
D) 85 percent
E) More information is needed to answer the question.

Question 17

$$\begin{array} { | c | c | } \hline \text { Group } & \begin{array} { c } \text { Percent of } \\\text { income }\end{array} \\\hline \text { Poorest } 20 \% & 5 \\\hline \text { Second poorest } 20 \% & 10 \\\hline \text { Middle } 20 \% & 15 \\\hline \text { Second richest } 20 \% & 25 \\\hline \text { Richest } 20 \% & 45 \\\hline\end{array}$$
The table gives the distribution of income in Mise

-What percent of income is earned by the richest forty percent?

A) 5 percent
B) 20 percent
C) 70 percent
D) 55 percent
E) More information is needed to answer the question.

Question 18

$$\begin{array} { | c | c | } \hline \text { Group } & \begin{array} { c } \text { Percent of } \\\text { income }\end{array} \\\hline \text { Poorest } 20 \% & 5 \\\hline \text { Second poorest } 20 \% & 10 \\\hline \text { Middle } 20 \% & 15 \\\hline \text { Second richest } 20 \% & 25 \\\hline \text { Richest } 20 \% & 45 \\\hline\end{array}$$
The table gives the distribution of income in Mise

-What percent of income is earned by the poorest 60 percent of the population?

A) 25 percent
B) 30 percent
C) 55 percent
D) 15 percent
E) More information is needed to answer the question.

Question 19

A Lorenz curve

A) is identical to the straight line sloping up at a 45° angle.
B) lies above the straight line sloping up at a 45° angle.
C) lies below the straight line sloping up at a 45° angle.
D) starts below the straight line sloping up at a 45° angle and then ends above this line.
E) starts above the straight line sloping up at a 45° angle and then ends below this line.

Question 20

Looking at the Lorenz curves for income distribution in all the world's nations,we would find that

A) some nations have Lorenz curves that lie above the 45° line, other nations have Lorenz curves that lie below the 45° line, but no nation has a Lorenz curve that lie on the 45° line.
B) all nations have Lorenz curves that lie above the 45° line.
C) all nations have Lorenz curves that lie below the 45° line.
D) some nations have Lorenz curves that lie above the 45° line, other nations have Lorenz curves that lie below the 45° line, and still other nations have a Lorenz curve that lies on the 45° line.
E) None of the above answers is correct.

Question 21

Measured annual income inequality overstates actual lifetime inequality because

A) poverty levels vary across states.
B) homeless people are not always counted.
C) different households are in different stages in the life cycle.
D) people tend to overstate their incomes.
E) people differ in the amount of education they have attained.

Question 22

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

A) 46
B) 22
C) 84
D) 11
E) 112

Question 23

In the figure above,the nation with the most equal distribution of income is nation

A) A.
B) B.
C) C.
D) The distribution of income is the same in all three nations because their Lorenz curves can be plotted on the same diagram.
E) It is impossible to determine with the information given.

Question 24

In the United States,the

A) distribution of income has become more equal since 1970.
B) Lorenz curve for income and the Lorenz curve for wealth are equally close to the line of equality.
C) Lorenz curve for income is closer to the line of equality than is the Lorenz curve for wealth.
D) Lorenz curve for wealth is closer to the line of equality than is the Lorenz curve for income.
E) None of the above answers is correct.

Question 25

In the figure above,the nation with the highest average income is nation

A) A.
B) B.
C) C.
D) The average income is the same in all three nations because their Lorenz curves can be plotted on the same diagram.
E) It is impossible to determine with the information given.

Question 26

________ is the single biggest factor affecting income distribution in the United States.

A) Location of household
B) Type of household
C) Education
D) Age of household
E) Gender

Question 27

The highest-income household in the United States today is likely to be a college-educated

A) married white couple.
B) single white female.
C) married Asian couple.
D) single black male.
E) single black female.

Question 28

In the United States in 2010,a family of four was considered to be living below the poverty line only if its household income was less than approximately

A) $400 per year.
B) $4,000 per year.
C) $11,900 per year.
D) $22,800 per year.
E) $35,800 per year.

Question 29

The factor that leads to the largest difference in households' incomes is

A) race.
B) education.
C) gender.
D) size of household.
E) location of household.

Question 30

Of the following major characteristics that lead to income disparity,the factor with the smallest impact is

A) sex.
B) race.
C) region of the country.
D) education.
E) number of people in the household.

Question 31

Comparing the wealth and income distribution in the United States,we see that

A) wealth is distributed less equally than income.
B) because wealth and income are different terms for the same thing, the distributions are the same.
C) income is distributed less equally than wealth.
D) we cannot compare the distribution of wealth and income.
E) None of the above answers is correct.

Question 32

In the United States,it is the case that

A) both income and wealth are equally distributed.
B) wealth is equally distributed but income is distributed unequally.
C) income is equally distributed but wealth is distributed unequally.
D) both income and wealth are unequally distributed and wealth is distributed more unequally than is income.
E) both income and wealth are unequally distributed and income is distributed more unequally than is wealth.

Question 33

In the figure above,the nation with the least equal distribution of income is nation

A) A.
B) B.
C) C.
D) The distribution of income is the same in all three nations because their Lorenz curves can be plotted on the same diagram.
E) It is impossible to determine with the information given.

Question 34

Looking at the income distribution in the United States since 1970,we see that

A) only the lowest 20 percent and highest 20 percent increased their shares of income.
B) the lower 50 percent increased its share of income and the upper 50 percent stayed the same.
C) the highest 20 percent increased its share of income.
D) all the 20 percent groups increased their shares of income.
E) the lower 50 percent increased its share of income and the upper 50 percent decreased its share of income.

Question 35

Since 1970 in the United States,the distribution of income has changed and the group that benefited the most has been the

A) better educated.
B) less educated.
C) low-skilled workers.
D) middle class, that is the group in the middle 20 percent of the income distribution.
E) None of the above answers is correct because all groups benefited equally.

Question 36

Poverty for a household is defined as the state of

A) having a total income that is below the median total income.
B) having an income that can be spent on food, shelter, and clothing that is below the median for food, shelter, and clothing.
C) income below what is thought fair.
D) income below what is thought necessary for food, shelter, and clothing.
E) having an income that is below average.

Question 37

In the United States since 1970 income has become ________ equally distributed and since the 1970s economic mobility among income groups has ________.

A) more; increased
B) more; decreased
C) less; increased
D) less; decreased
E) None of the above answers is correct because economic mobility among income groups cannot be measured.

Question 38

In the United States,since 1970 the share of income received by the richest 20 percent of households has ________ and the share received by the other 80 percent of households has ________.

A) increased; increased
B) increased; decreased
C) decreased; increased
D) not changed; not changed
E) increased; not changed

Question 39

Which of the following statements is correct?

A) Wealth inequality in the United States is greater than income inequality.
B) Income inequality in the United States is greater than wealth inequality.
C) Income includes all the things owned by a household at a certain point in time.
D) The top fifth of households have a greater share of the nation's income than the nation's wealth.
E) The fraction of wealth owned by the bottom 20 percent of households is larger than the fraction income earned by the bottom 20 percent of households.

Question 40

The measured inequality of annual income ________ the actual inequality of lifetime income because ________.

A) overstates; different households are at different stages in the life cycle
B) overstates; the Lorenz curves differ for income and wealth
C) understates; people live in different geographic areas
D) understates; people have different levels of education
E) overstates; different households have different amounts of wealth

Question 41

Looking at the U.S.poverty rate by race,we see that

A) the poverty rates by race are now equal.
B) whites have a higher poverty rate than do blacks.
C) Hispanics and blacks have a higher poverty rate than whites.
D) whites have a nearly zero poverty rate while Hispanics and blacks are near 20 percent.
E) whites and blacks have higher poverty rates than do Hispanics.

Question 42

Which of the following statements about poverty is (are)correct?
i.Blacks and Hispanics have higher poverty rates than whites.
ii.Over the last 40 years,poverty rates for all groups have generally increased.
iii.Most household spells of poverty last well beyond 9 months.

A) i only
B) ii only
C) iii only
D) ii and iii
E) i, ii, and iii

Question 43

The demand for labor
i.depends on the availability of labor.
ii.decreases when the supply of labor increases.
iii.depends on the value of marginal product of labor.

A) i only
B) i and ii
C) iii only
D) i and iii
E) i, ii, and iii

Question 44

Which type of household has the lowest poverty rate?

A) black
B) Hispanic
C) white
D) White and Hispanic are almost tied.
E) White and black are almost tied.

Question 45

Workers who have invested in education and training

A) are more likely to find jobs that are not rewarding.
B) have a higher value of marginal product.
C) have a more difficult time finding a job because their wage rate is higher.
D) have identical supply curves to otherwise similar workers who have not invested in education and training.
E) None of the above answers is correct.

Question 46

In the United States in 2004,the wealthiest 1 percent of households held approximately ________ percent of all wealth.

A) 1
B) 13
C) 27
D) 34
E) 88

Question 47

Which of the following is correct about the United States?

A) Income is equally distributed.
B) Wealth is equally distributed.
C) Income is equally distributed but wealth is unequally distributed because of inheritances.
D) Both wealth and income are unequally distributed.
E) Both wealth and income are equally distributed.

Question 48

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 ________.

A) increased; not changed
B) not changed; increased
C) not changed; decreased
D) decreased; increased
E) increased; decreased

Question 49

The gap between the salary of Tom Cruise and an unknown actor is over $15 million per movie.This difference means that Mr.Cruise's value of marginal product is

A) over $15 million greater than the value of the marginal product of the unknown actor.
B) less than $15 greater than value of the marginal product of the unknown actor.
C) $15 million greater than the value of the marginal product of the unknown actor.
D) equal to the value of the marginal product of the unknown actor.
E) More information is need to make the comparison.

Question 50

Which of the following is (are)a difference between high-skilled workers and low-skilled workers?
i.High-skilled workers have a higher value of marginal product.
ii.High-skilled workers have incurred lower opportunity costs to acquire their skills.
iii.The demand for high-skilled workers exceeds that for low-skilled workers.

A) i only
B) ii and iii
C) i and ii
D) i and iii
E) i, ii, and iii

Question 51

Of all the characteristics that lead to income inequality,the factor with the largest impact is

A) race.
B) sex.
C) age.
D) education.
E) location.

Question 52

Which of the following is true? At a given quantity of employment,if the
i.value of marginal product of a high-skill worker is $35 and the value of marginal product of a low-skill worker is $10,the value of marginal product of the skill is $25.
ii.value of marginal product of a high-skill worker is $35 and the value of marginal product of a low-skill worker is $10,the cost of acquiring the skill is $25.
iii.value of marginal product of a skill is $25,then the wage rate must be $25.

A) i only
B) ii only
C) iii only
D) i and iii
E) ii and iii

Question 53

The inequality of annual income

A) overstates the amount of lifetime inequality.
B) understates the amount of lifetime inequality.
C) cannot change from one year to the next.
D) is about the same as the amount of lifetime inequality.
E) cannot be compared to the amount of lifetime inequality.

Question 54

Skills are costly to acquire.What forms do these costs take?
i.out-of-pocket expenditures to pay for more education
ii.a higher value of marginal product
iii.forgone earnings while attending higher education

A) i only
B) ii only
C) iii only
D) i and iii
E) i, ii, and iii

Question 55

The demand curve for high-skilled workers

A) lies to the right of the demand curve for low-skilled workers.
B) lies to the left of the demand curve for low-skilled workers.
C) is vertical.
D) is horizontal.
E) 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.

Question 56

One reason why economists earn more than Taco Bell workers is because economists have a ________ value of marginal product of labor than Taco Bell workers.

A) lower
B) higher
C) similar
D) more convex
E) more concave

Question 57

If a firm is willing to pay a high-skilled worker $25 per hour and a low-skilled worker $10 per hour then the value of marginal product of skill is

A) $15.
B) $40.
C) $10.
D) $25
E) There is not enough information to answer this question.

Question 58

If the income distribution is more unequal than the wealth distribution,then the

A) Lorenz curve for income will be farther away from the line of equality than the Lorenz curve for wealth.
B) government has imposed a higher tax rate on income.
C) Lorenz curve for wealth will be farther away from the line of equality than the Lorenz curve for income.
D) Lorenz curve for wealth will lie above the Lorenz curve for income.
E) It is not possible to draw the Lorenz curve for wealth on the same figure with the Lorenz curve for income.

Question 59

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

A) wage rate paid to a high-skilled worker.
B) wage rate paid to a low-skilled worker.
C) compensation the high-skilled worker requires for the cost of acquiring the skill.
D) number of high-skill workers that will be hired.
E) difference in the value of marginal product between the high-skilled workers and the low-skilled workers.

Question 60

In 2010,the poverty rate in the United States level was approximately ________ percent.

A) 3
B) 15
C) 32
D) 20
E) 26

Question 61

The more costly it is to acquire a skill,the

A) more people will go to school to learn the skill.
B) less employers are willing to pay for the skill.
C) greater the wage differential between high-skilled and low-skilled workers.
D) smaller the wage differential between high-skilled and low-skilled workers.
E) more the demand for workers with that skill exceeds the demand for workers without that skill.

Question 62

Discrimination by customers creates a wage differential between two groups by creating a difference in the two groups'

A) supply of labor.
B) value of marginal product.
C) marginal cost of labor.
D) minimum wage.
E) opportunity cost of acquiring skills.

Question 63

What economic effect works to eliminate sex and race discrimination?

A) Firms hire only the preferred races and sex.
B) Lower paid races and sexes give up working and drop out of the labor supply.
C) Customers who discriminate pay higher prices to buy from preferred races and sex.
D) The value of marginal product of the less preferred races and sexes eventually increases.
E) Lower paid races and sexes decrease their demand for goods and services.

Question 64

Increased discrimination results in ________ of the workers discriminated against being hired and being paid ________ wage rates.

A) more; higher
B) more; lower
C) fewer; higher
D) fewer; lower
E) the same number; lower

Question 65

The ________ distance between the supply curve of low-skilled labor and the supply curve of high-skilled labor is the ________.

A) horizontal; value of marginal product of skill
B) horizontal; compensation for cost of acquiring skill
C) vertical; value of marginal product of skill
D) vertical; compensation for cost of acquiring skill
E) vertical; difference in the price of the product produced b y high-skilled labor minus the price of the product produced by low-skilled labor

Question 66

Looking at wage differentials between white women and white men in the United States since 2000,we see that the amount of the difference

A) has not changed.
B) has increased.
C) has decreased.
D) at first increased but in the last decade it decreased.
E) at first decreased but in the last decade it increased.

Question 67

What determines the position of the supply curve of high-skilled workers relative to that of low-skilled workers?

A) the cost of acquiring the skill
B) the difference in the demand curves for the two groups
C) Bureau of Labor Standard guidelines
D) the difference in the value of the marginal products
E) None of the above answers is correct.

Question 68

High-skilled workers earn more relative to low-skilled workers because the demand for high-skilled workers is ________ that for low-skilled workers and the supply is ________ that for low-skilled workers.

A) greater than; greater than
B) greater than; lower than
C) lower than; greater than
D) lower than; lower than
E) greater than; the same as

Question 69

How does the supply curve of high-skilled workers compare to the supply curve of low-skilled workers?

A) Because skills are costly to acquire, at a given wage rate the quantity supplied of high-skilled workers is greater than that of low-skilled workers.
B) Because skills are costly to acquire, at any given wage rate the quantity supplied of high-skilled workers is less than that of low-skilled workers.
C) Because skills are inexpensive to acquire, at any given wage rate the quantity supplied of high-skilled workers is less than that of low-skilled workers.
D) Because skills are inexpensive to acquire, at any given wage rate the quantity supplied of high-skilled workers is greater than that of low-skilled workers.
E) None of the above answers is correct.

Question 70

The higher the cost of acquiring skills,the ________ are the high-skilled and low-skilled labor ________ curves.

A) closer together; demand
B) farther apart; demand
C) closer together; supply
D) farther apart; supply

Question 71

The rates of return on high school and college educations have

A) not been estimated, but are assumed to be high.
B) been estimated as negative, but these are still good options for most.
C) been estimated at 50 percent per year.
D) been estimated at between 5 to 10 percent per year.
E) been estimated to be essentially zero.

Question 72

If buyers discriminate against women and minorities,
i.the value of marginal product of women and minorities is less than otherwise.
ii.the wage rate paid to women and minorities is less than otherwise.
iii.more women and minorities are hired than otherwise.

A) i only
B) ii only
C) ii and iii
D) i and ii
E) i, ii, and iii

Question 73

The ________ the value of marginal product of skill,the ________.

A) smaller; larger is the wage differential between low-skilled workers and high-skilled workers
B) larger; more elastic the supply curve of labor
C) larger; larger is the wage differential between low-skilled workers and high-skilled workers
D) smaller; less elastic the supply curve of labor
E) smaller; larger is the cost of acquiring the skill

Question 74

Which of the following is correct? On the average,
i.the wage differential between white males and white females has narrowed since 2000.
ii.black females are paid more than black males.
iii.Hispanic males are paid more than black males.

A) i only
B) ii only
C) ii and iii
D) i and iii
E) i, ii, and iii

Question 75

High-skilled workers earn more than low-skilled workers in part because the high-skilled workers have

A) a higher value of marginal product.
B) a lower value of marginal product.
C) better health.
D) fewer deductions.
E) a greater supply than do low-skilled workers.

Question 76

The larger the value of marginal product of a skill,the

A) larger the vertical difference between the demand curves for high- and low-skilled labor.
B) smaller the vertical difference between the demand curves for high- and low-skilled labor.
C) larger the vertical distance between the supply curves for high- and low-skilled labor.
D) smaller the vertical distance between the supply curves for high- and low-skilled labor.
E) higher is the wage rate at which the demand curve for high-skilled workers crosses the demand curve for low-skilled workers.

Question 77

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.

A) above; above
B) above; below
C) below; above
D) below; below
E) above; on

Question 78

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

A) $25 per hour.
B) $15 per hour.
C) $10 per hour.
D) $5 per hour.
E) $0 per hour because Pete is being paid a wage.

Question 79

Compared to low-skilled workers,high-skilled workers have a ________ value of marginal product and ________ opportunity cost of obtaining their skills.

A) higher; a higher
B) higher; a lower
C) lower; a higher
D) lower; a lower
E) higher; the same

Question 80

Looking at wage differentials between white men and other groups in the United States,we see that

A) white men and black men earn about the same but women of all races earn less.
B) white men earn more than black men but white women earn less than black men.
C) black men earn less than white men and less than white women.
D) white men and white women earn about the same but minorities earn less.
E) black men and men of Hispanic origin earn about the same amount and both groups of men are paid more than black women and women of Hispanic origin.