What are the major criticisms of the Lorenz curve?
What will be an ideal response?
The Lorenz curve typically is presented in terms of the distribution of money income and ignores income in kind. It also does not account for differences in family sizes, the number of income earners in the family, or the ages of the families. The Lorenz curve also reflects income before taxes rather than disposable income, and fails to measure income from the underground economy.
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The table below shows how the payoffs to two political candidates depend on whether the candidates run a positive or negative campaign. The payoffs are given in terms of the percentage change in the number of votes received. 
Running a negative campaign is ________ for the ________ candidate.
A. a dominant strategy; Democratic B. neither a dominant nor dominated strategy; Republican C. a dominated strategy; Democratic D. a dominated strategy; Republican
Suppose that both nominal GDP and prices double. We can conclude that real output:
A. doubled. B. fell. C. more than doubled. D. remained constant.
Farm programs such as those of the United States and the European Union:
A. encourage the United States and the European Union to use tariffs and quotas to restrict agricultural imports. B. cause U.S. and EU farmers to produce less than domestic consumers want to purchase. C. increase world market prices for agricultural products. D. raise farm output in developing nations.
If the price were $20, what would the firm do in the (a) short run? (b) long run?
