Question : 20.1   Measuring Economic Inequality 1) In the United States, the poorest : 1238942

20.1   Measuring Economic Inequality

1) 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

2) 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

3) 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

4) 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.

5) 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

6) 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.

7) 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.

8) Lorenz curves are

A) horizontal.

B) vertical.

C) upward sloping.

D) downward sloping.

E) straight lines.

9) 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.

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.