Answer the following statements true (T) or false (F)
1. About one-fifth of all U.S. households had incomes of $100,000 or more in 2011.
2. In the U.S., the top 20% of households received a little more than 50% of total pre-tax income in 2011.
3. The Lorenz curve is a graph that relates income to household spending.
4. The Gini coefficient or ratio is a summary measure of income inequality derived from the Lorenz curve.
5. The distribution of household income in the United States becomes more unequal after taxes and transfer payments are taken into account.
1. T
2. T
3. F
4. T
5. F
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A fear in investing in China
A) is based in fears of its declining population. B) relates to the value of property rights. C) can be overcome by not have Chinese operations. D) none of these choices.
Suppose that the market price for pizzas increases. The increase in producer surplus comes from the benefit of the higher prices to
a. only existing sellers who now receive higher prices on the pizzas they were already selling. b. only new sellers who enter the market because of the higher prices. c. both existing sellers who now receive higher prices on the pizzas they were already selling and new sellers who enter the market because of the higher prices. d. Producer surplus does not increase; it decreases.
If the demand curve for a good shifts leftward,
A) quantity demanded is less at each price. B) quantity demanded remains constant at each price. C) quantity demanded is greater at each price. D) demand is greater at each price.
Accounting profits are typically
A. greater than economic profits because accounting profits do not include explicit costs. B. equal to economic profits in the long run. C. smaller than economic profits because accounting profits do not include explicit costs. D. greater than economic profits because accounting profits do not include implicit costs.