Country A has a Gini coefficient of 0.5 and country B has a Gini coefficient of 0.7. It fo

Country A has a Gini coefficient of 0.5 and country B has a Gini coefficient of 0.7. It follows that

a.there is greater income inequality in country A than B.

b.there is greater income inequality in country B than A.

c.it is possible for the Lorenz curves in each country to be the same.

d.it is possible for the adjusted Gini coefficients to the same in each country.

e.none of the above

 

 

 

62.Consider the area between the line of perfect income equality and the Lorenz curve. In country A this area is larger than in country B. It follows that

a.the bottom 20 percent income group receives a lower percentage of total income in country A than in country B.

b.the bottom 20 percent income group receives a lower percentage of total income in country B than in county A.

c.the top 20 percent income group receives a higher percentage of total income in country B than in country A.

d.the top 20 percent income group receives a higher percentage of total income in country A than in country B.

e.none of the above

 

 

 

63.Based on the income data presented for the United States (in your text), it follows that the Gini coefficient for the United States is

a.less than 1 and greater than 0.

b.definitely less than 1, but it may be 0.

c.definitely greater than 0, but it may be 1.

d.definitely 1.

e.approximately 2.3.

 

 

 

64.A factor that does not contribute to income inequality includes

a.innate abilities and attributes.

b.the amount of work a person chooses to do.

c.education and training.

d.luck.

e.none of the above; that is, all factors contribute to income inequality.

 

 

 

65.Smith and Jones are different when it comes to taking risk. Smith will assume much more risk than Jones. It follows that

a.Smith will earn more income than Jones.

b.Jones will earn more income than Smith.

c.Smith has a higher probability than Jones of earning a higher income.

d.Smith has a higher probability than Jones of earning a lower income.

e.c and d

 

 

 

66.Wage discrimination exists when individuals of __________ are paid different wage rates.

a.varying ability and productivity

b.different ethnic origins

c.different religions

d.equal ability and productivity

e.b, c, and d

 

 

 

67.Smith and Jones work at very similar jobs, but Smith earns almost 30 percent more a day than Jones. This is a case of __________ discrimination.

a.gender

b.religious

c.wage

d.ethnic

e.There is not enough information to answer the question.

 

 

 

68.According to economists Frank and Cook, one reason there are more winner-take-all markets today than in the past is because

a.government has limited the choices that people can make when they are choosing what to buy.

b.changes in technology, communications, and transportation costs have made it possible for consumers to buy from a small handful of "the best" suppliers in the world.

c.changes in technology have lowered prices.

d.of the importance that today is placed on ideas instead of things.

e.a and b

 

 

 

69.In country A the income shares (in percent) received by the lowest fifth of income groups to the highest fifth of income groups is, respectively, 10, 15, 20, 25, and 30. In country B the income shares (in percent) received by the lowest fifth of income groups to the highest fifth of income groups is, respectively, 5, 12, 20, 25 and 38. It follows that the

a.income distribution is more equal in country B than A.

b.income distribution is less unequal in country B than A.

c.Lorenz curve in country B is nearly the same as the line of perfect income equality in country A, but not in country B.

d.income distribution is less equal in country B than A.

e.a and b

 

 

 

70.The economist who said, "I am distressed by the sight of poverty. I am benefited by its alleviation; but I am benefited equally whether I or someone else pays for its alleviation; the benefits of other people's charity therefore partly accrues to me" was

a.John Kenneth Galbraith.

b.John Rawls.

c.Milton Friedman.

d.Adam Smith.

e.David Ricardo.