SOLVED

21) A Lorenz curve measures A) the benefits received through welfare programs. B) the actual income distribution and compares it to an equal income distribution. C) the degree to which income taxes are regressive. D) the effect of flat taxes on income distribution. 22) A Lorenz curve can be used to illustrate A) the supply of labor. B) the substitution effect. C) the income effect. D) the distribution of income. 23) The Lorenz curve A) explains why some households have different incomes. B) explains why income is equally distributed. C) graphically shows the degree of income inequality. D) graphically shows the amount of wealth in a country. 24) From left to right, the horizontal axis of the Lorenz curve ranks households from A) smallest to largest. B) largest to smallest. C) poorest to richest. D) richest to poorest. 25) 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) None of the above because it is impossible to compare income inequalities across countries. 26) The farther the Lorenz curve for income is from the line of equality, the more ________ is distributed. A) equally wealth B) unequally income C) unequally wealth D) equally income 27) If a Lorenz curve for a country’s income bows more rightward over time, then the country’s A) income is increasing. B) income is decreasing. C) income is becoming more unequally distributed. D) income is becoming more equally distributed. 28) If a Lorenz curve for income moves rightward and becomes more bowed out over time, then A) the population is growing. B) income is growing. C) income is being more equally distributed. D) income is being more unequally distributed. 29) If a Lorenz curve moves leftward and becomes closer to the line of equality over time, then A) the population is growing. B) income is growing. C) income is being more equally distributed. D) income is being more unequally distributed. Â Group Percent of income Percent of wealth Poorest 20% 5 0 Poorest 40% 15 2 Poorest 60% 30 5 Poorest 80% 55 10 30) The above table shows the distribution of income and wealth in Miseria. What percent of income is earned by the richest twenty percent? A) 5 percent B) 20 percent C) 45 percent D