Refer to the information provided in Figure 18.1 below to answer the question(s) that follow.
Figure 18.1Refer to Figure 18.1. Suppose that the Lorenz curve were the same as the 45-degree line OB. This would mean that
A. the distribution of income is equal.
B. only one family earned all the income.
C. the distribution of income is completely inequitable.
D. the distribution of income is perfectly equitable.
Answer: A
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"The slope of the demand curve gives the elasticity of demand." Do you agree or disagree? Why?
What will be an ideal response?
A kinked demand curve
a. results from the heavy advertising expense required. b. occurs because, when one seller lowers the price, no one else will do so. c. is a basic characteristic of monopolistic competition markets. d. tends to be inelastic for price decreases and elastic for price increases.
Which of the following must be true if average total cost is rising?
a. Average fixed cost must be rising. b. Total fixed cost must be rising. c. Average variable cost must be falling. d. Marginal cost must be greater than average total cost.
What is the definition of producers' surplus?
A) price received minus maximum selling price B) maximum selling price minus price received C) price received minus minimum selling price D) highest price minus lowest price E) none of the above