income inequality MCQs – Page 2

A. wages of men will be higher but the marginal productivity of men will be lower than it otherwise would be

B. the wages of men will be lower but the marginal productivity of men will be higher than it otherwise would be

C. both the wages and the marginal productivity of men will be lower than they otherwise would be

B. income is distributed equally

C. all the income is received by the top 20% of the income distribution

D. the income is split equally between the top 20% and the rest of the distribution.

A. how many producers there are:

B. whether there is perfect or imperfect information

C. who is legally obliged to pay the tax

A. indirect demand

B. the value of the marginal product of auto workers.

D. output demand

A. the amount paid each year by a tenant for an apartment

C. any profit earned by stockholders when they sell their stock

D. the profit earned by the owner of any housing unit.

A. the idea that people should consider policy as if behind a veil of ignorance as to what their circumstances might be in society, and the idea that as long as there is no theft then there is no need for governments to intervene and redistribute income.

C. the idea that everyone in society should have an equal income

D. the idea that people a veil of ignorance as policy as if behind a veil of ignorance as to what their circumstances might be in society, and the ignorant people should be looked after

A. Maximize the total utility of society

B. maximize the economic freedom of individuals by minimizing government interference in private decision making

C. minimize the difference between the rich and poor

D. minimize the well-being of the best-off person in society

A. will have no effect on labour supply

B. will increase labour supply.

D. could cause either an increases or a decrease in labour supply

B. affect neither the current nor the permanent income of a worker

C. reduce a workers permanent income but not their current income

D. increase a workers current income and permanent income

B. the most common way of representing the income distribution graphically

C. a commonly used measure of the degree of inequity in an income distribution

D. a commonly used measure of the degree of inequality in an income distribution

A. income effect and the substitution effects are equal

B. income effect is zero

D. substitution effect outweighs the income effect

A. decreases since the customer now has more income to spend

B. may increase of decrease depending on the individuals preferences.

C. remains constant

A. unskilled workers if the demand for labour is relatively inelastic

C. skilled workers if the demand for labour is relatively inelastic

D. skilled workers if the demand for labour is relatively elastic

B. those who benefit the most from government services should have the greatest voice in determining what gets produced

C. those with equal ability to pay should bear unequal tax burdends.

D. those who benefits the most from government services should bear the higher tax burden.

A. those with equal ability to pay should bear unequal burdens

C. those will equal ability to pay should bear equal tax burdens.

D. those who benefit the most from government service should bear the higher tax burden

A. understate the inequality of living standards

B. accurately represent the true inequality of living standards

C. could exaggerate of understate the inequality of living standards depending on whether the transfers are goods or services.

A. Such redistribution would mean that those who worked hard were no better off than those who were lazy and this would be unfair.

B. such redistribution would not maximize the total income of all members of society

C. such redistribution would amount to confiscation of honestly earned income from higher earners and so would be unjust.

A. MPL/PX

B. (MPL) (PX)

D. MPL + PX

A. current annual income is a good measure of the distribution of living standards.

B. none of these answers

C. life-cycle income is a good measure of the distribution of living standards.

D. transitory income is a good measure of the distribution of living standards

B. a situation in which those receiving state benefits may be almost no better off if they choose to work more to earn more income for themselves and their families because doing so will mean they have to pay back the benefits they have previously received

C. a situation in which those receiving state benefits are discriminated against by employers and so find it more difficult to find jobs.

D. a situation in which workers are unable to find jobs.