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 perfectly equitable.
B. only one family earned all the income.
C. the distribution of income is equal.
D. the distribution of income is completely inequitable.
Answer: C
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The government proposes a tax on halogen light bulbs. Sellers will bear the entire burden of the tax if the
A) demand curve is downward sloping and the supply curve is upward sloping. B) demand curve for halogen bulbs is horizontal. C) demand curve for halogen bulbs is vertical. D) supply curve of halogen bulbs is horizontal.
The ABC Corporation earned a real rate return of 4.5 percent on an investment. In the economy, the nominal rate of interest was 6 percent and the rate of inflation was 3 percent. We can conclude that
A) the investment was unprofitable. B) the investment was profitable. C) the real rate of interest was 9 percent. D) the real rate of interest was 1.5 percent.
For a monopolist, marginal revenue is
a. equal to price b. greater than price c. less than price d. represented by a horizontal curve e. equal to average revenue
If the aggregate supply curve is flat,
a. expansionary fiscal or monetary policy will cause a good deal of inflation with little increase in real output. b. expansionary fiscal or monetary policy will buy large gains in real output at low cost in terms of inflation. c. a contractionary stabilization policy is an effective way to reduce inflation. d. decreasing the income tax will not shift aggregate demand.