In the country of Konswano there are 4 people. Each person lives for 40 years. In their first 10 years, they earn no income. In the next 20 years, they earn $40,000 per year and in the last 10 years they earn no income
Each year their consumption is $20,000. If everyone in Konswano is 25 years old, then the Lorenz curve for income is ________. A) above the Lorenz curve for wealth
B) above the line of equality
C) equal to the line of equality
D) below the Lorenz curve for wealth
C
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Who was the economist who first analyzed the advantages of specialization and the division of labor?
A) Adam Smith B) Ronald Coase C) Arthur C. Pigou D) David Ricardo
Which of the following statements is true
a. a market equilibrium price is where quantity demanded equals quantity supplied b. a market equilibrium price is where the demand is higher than the supply c. a market equilibrium price is where the supply is higher than the demand d. none of the above
Which is the correct match of an economic resource and payment for that resource?
a. Entrepreneurial ability and wages b. Capital and interest income c. Land and profit d. Labor and rental income
Which of the following is an implication of the law of diminishing returns?
A. Total output will decline as more workers are hired. B. In the long run, average total cost will eventually decline as output is expanded. C. In the short run, expansion of output will eventually lead to increases in marginal cost and average total cost. D. A doubling of all inputs will lead to more than a doubling of output.