Question 1)The Lorenz curve shows A) the demand for jobs. B) the supply of jobs.

1)The Lorenz curve shows A) the demand for jobs. B) the supply of jobs.

C) the elasticity of jobs.

D) the distribution of income.

2)The graph which represents the distribution of income in an economy is called the A) Laffer curve.

B) Lorenz curve.

C) distribution curve.

D) aggregate demand curve.

3)According to the text, today’s Lorenz curve is

A)a straight line.

B)a vertical line.

C)more bowed than in 1929.

D)less bowed than in 1929.

4) According to the text, the lower half of U.S. households earn about what percentage of total income?

A)4 percent

B)9 percent

C)15 percent

D)28 percent

5)The Lorenz curve shows what portion of total money income is accounted for by A) different proportions of a country’s households.

B) only the wealthiest citizens. C) only poor people.

D) taxpaying citizens only.

6)In a Lorenz curve, perfect income equality is represented by

A)a vertical line.

B)a horizontal line.

C)a rectangular hyperbola.

D)a 45-degree line originating from the origin.

7)The more bowed out the Lorenz curve, the A) less equal the income distribution.

B) more equal the income distribution.

C) greater the overall wealth in the economy. D) less the overall wealth in the economy.

8)The less bowed the Lorenz Curve, the

A)more equal the income distribution.

B)less equal the income distribution.

C)greater the number of low-income people.

D)greater the number of high-income people.

9) A straight-line Lorenz curve shows

A)an equal distribution of money income.

B)a greater than proportionate share of income going to middle-income households.

C)a high incidence of absolute poverty.

D)a highly unequal distribution of income.

10)The more bowed (skewed) the Lorenz curve, A) the more equal the distribution of income.

B) the greater the number of households in the society. C) the more unequal the distribution of money income. D) the greater the total income of the society.

11)The Lorenz curve is a geometric representation of

A)the profile of earnings for a “typical” family over time.

B)the standard of living experienced by the poor in a country.

C)the difference between pre-tax and post-tax income.

D)the distribution of income.

12) The more bowed the Lorenz curve, the

A)richer the society.

B)more unequal the distribution of money income.

C)poorer the society.

D)more equal the distribution of income.

13) Suppose 10 percent of the families receive 10 percent of the income, 20 percent of the families receive 20 percent of the income, and so forth. The Lorenz curve would be

A)a straight line at a 45-degree angle from the origin.

B)a straight line at a 30-degree angle from the origin.

C)the most bowed curve possible.

D)the horizontal axis.

14) The most unequal distribution of income in the above figure exists in

A)country 4.

B)country 1.

C)country 5.

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