Since it lies in 2-dimensions, one of the drawbacks of using Lorenz curves to think about inequality is that we are restricted to thinking about only two types of individuals.
Answer the following statement true (T) or false (F)
False
Rationale: The axes on the graph for the Lorenz curve are not individual specific -- rather they give the percentage of the population from 0 to 100 without any reference to different types.
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If the price of potatoes is reduced, consumers likely buy
A. significantly more potatoes. B. significantly fewer potatoes. C. roughly the same quantity of potatoes. D. an unknown quantity of potatoes; in this situation, consumers’ actions cannot be predicted.
When a profit-maximizing firm in a competitive market has zero economic profit, accounting profit
a. is negative. b. is at least zero. c. is also zero. d. could be positive, negative or zero.
You receive $500 today which you plan to save for two years. Also, in two years you will be given another $500 . If the interest rate is 5 percent, what is the present value of the payment of $500 today and the $500 in two years?
a. $500(1.05)2 + $500/(1.05)2 b. $500(1.05)2 + $500 c. $500 + $500/(1.05)2 d. $500 + $500
A worker received $5 for a daily wage in 1930 . What is the value of that wage today if the CPI was 17 in 1930 and is 230 today?
a. 37 cents b. $4.63 c. $67.65 d. $37.86