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| 1 | |
The degree of income inequality in an economy is measured on a Lorenz curve by the |
| | A) | slope of the diagonal that runs from the bottom left to the top right corner of the diagram |
| | B) | slope of the Lorenz curve |
| | C) | area between the Lorenz curve and the axes of the graph |
| | D) | area between the Lorenz curve and the bottom left to top right diagonal line. |
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| 2 | |
The graph shows four different Lorenz curves (1, 2, 3, and 4). The greatest increase in income equality would occur with a shift in a Lorenz curve from
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| | A) | 1 to 2 |
| | B) | 1 to 4 |
| | C) | 4 to 1 |
| | D) | 3 to 1 |
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| 3 | |
Recent data on the distribution of income in Canada indicate that |
| | A) | average incomes are falling |
| | B) | average incomes are constant |
| | C) | income is equally distributed |
| | D) | there is considerable income inequality |
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| 4 | |
Which of the following would be evidence of a decrease in income inequality in Canada? |
| | A) | a decrease in the percentage of total personal income received by the lowest quintile |
| | B) | an increase in the percentage of total personal income received by the highest quintile |
| | C) | an increase in the percentage of total personal income received by the four lowest quintiles |
| | D) | a decrease in the percentage of total personal income received by the four lowest quintiles |
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| 5 | |
Which is one cause of unequal income distribution in Canada? |
| | A) | an equitable distribution of wealth and property |
| | B) | differences in education and training |
| | C) | the high levels of non-cash transfers |
| | D) | the low benefit-reduction rate |
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| 6 | |
Suppose that Renee earns $5,000 in year 1 and $50,000 in year 2, while Haminder earns $50,000 in year 1 and $5,000 in year 2. Is there income inequality for the two individuals? |
| | A) | both the annual and the 2-year data indicate equality. |
| | B) | both the annual and the 2-year data indicate inequality. |
| | C) | the annual data indicate inequality, but 2-year data indicate equality. |
| | D) | the annual data indicate equality, but 2-year data indicate inequality. |
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| 7 | |
The fact that some individuals are willing to take riskier jobs or assume more risk in their business is one reason why there are differences in |
| | A) | social insurance programs |
| | B) | measures of poverty |
| | C) | welfare |
| | D) | income |
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| 8 | |
The case for income inequality is often made on the basis that income inequality |
| | A) | is reduced by the transfer payment programs for the poor |
| | B) | creates economic incentives to increase output |
| | C) | depends on luck and chance, which cannot be corrected by government action |
| | D) | is created by education and training programs that distort the distribution of income |
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| 9 | |
Families are considered to be below Statistics Canada's 1992 low-income cut-off if they spend more than 53% of their after-tax income on |
| | A) | food, clothing and shelter |
| | B) | food, clothing, and transportation |
| | C) | food, clothing, and health care |
| | D) | food, clothing, shelter, transportation, and health care |
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| 10 | |
Canada's current income maintenance system includes all but |
| | A) | employment insurance |
| | B) | old age security |
| | C) | guaranteed income supplement |
| | D) | negative income tax |
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| 11 | |
The goals of welfare plans often conflict because it is difficult to construct a plan that |
| | A) | provides reasonable income levels and incentives to work for the poor, but is not too costly |
| | B) | is not subject to substantial administrative costs and bureaucratic red tape |
| | C) | does not discriminate against those individuals with similar circumstances, but who have similar needs |
| | D) | promotes family unity and does not create a "culture of poverty" among the participants in the program |
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| 12 | |
The debate over income redistribution focuses on the tradeoff between equality and |
| | A) | efficiency |
| | B) | unemployment |
| | C) | economic growth |
| | D) | economic freedom |
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| 13 | |
Labour market discrimination: |
| | A) | affects the distribution of domestic output and income, but not its total size. |
| | B) | is shown as some point outside of an economy's production possibilities curve. |
| | C) | places the economy at some point inside of its production possibilities curve. |
| | D) | affects the total size of domestic output and income, but not its distribution. |
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| 14 | |
Statistical discrimination occurs when |
| | A) | individuals are hired on the basis of their skills and education |
| | B) | employers discriminate in some hiring decisions but not others |
| | C) | employers use demographic data such as age and gender in their hiring decisions |
| | D) | individuals are hired on the basis of average group characteristics |
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| 15 | |
Crowding certain discriminated-against groups into certain lower paying jobs is called |
| | A) | statistical discrimination |
| | B) | occupational segregation |
| | C) | wage discrimination |
| | D) | stereotyping |
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