The Lorenz curves in the above figure imply that
A) income is distributed more unequally than wealth.
B) wealth is distributed more unequally than income.
C) both wealth and income are distributed equally.
D) both wealth and income are distributed at the same level of inequality.
B
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Modern economists are increasingly using microeconomic analysis in macroeconomics because
A) microeconomic theory is more scientific. B) aggregate outcomes stem from decisions made by individuals, business firms and government. C) macroeconomic subjects such as inflation affect all individuals. D) macroeconomics is older and more outdated.
If at optimum output of 1,000 units, the firm is incurring average variable cost per unit of $3, average fixed cost per unit of $1.50, and selling its output at $7 per unit, total profit is
A. $7,000. B. $2,500. C. $1,500. D. $250.
Air pollution best illustrates
A. An external cost. B. An inequity. C. Government failure. D. Market power.
The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.