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 ran along the ________ to 100%, then became ________ to 100%. This would mean that only one family earned all the income.
A. Y-axis; horizontal
B. Y-axis; vertical
C. X-axis; vertical
D. X-axis; horizontal
Answer: C
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If you overhear a group of people talking about their plans to save for their retirement and one of them says that it causes them to save more because, as they reason it, "if there wasn't Social Security I could never retire; there is, so I will and I need to save for that." You would attribute this to the
A. induced retirement effect. B. bequest effect. C. slovenly effect. D. asset substitution effect.
Based on labor-market studies using regression analysis, once educational attainment is accounted for with college graduates, the wage gap between Asians and whites ________ and the wage gap between whites and blacks ________
A) disappears; greatly narrows B) grows; grows C) grows; disappears D) greatly narrows; grows significantly
This year a firm produces $100 million worth of cars this year and sells $102 million worth of cars. Which of the following is true?
A) GDP for this year will increase by $100 million. B) GDP for this year will increase by $102 million. C) Inventory investment will increase by $2 million. D) GDP for this year will increase by $202 million. E) The premise of the question is wrong because it is impossible for a firm to sell more than it produces in a given time period.
Refer to the above table. Which of the following statements is correct?
A) The table follows economic principles because in an increasing cost industry, increases in a variable input will lead to increase in output. B) The table does not follow economic principles because in an increasing cost industry, increases in a variable input will lead to decrease in output. C) The table follows economic principles because the law of diminishing marginal product predicts that increase in a variable input will eventually lead to a decrease in the marginal physical product. D) The table does not follow economic principles because the law of diminishing marginal product predicts that increase in a variable input will eventually lead to an increase in the marginal physical product.