If wealth, income, and standards of living are related in Canada as they are in the United States, then Canadian wealth is
a. more evenly distributed than income
b. falling, if measured as per-capita wealth
c. a good indicator of its poverty threshold
d. less evenly distributed than income
e. the reason why the Gini coefficient in Canada is less than 1
D
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Considering a given increase in price due to a tax, the less price elastic the demand curve is, the:
A. larger the drop in equilibrium quantity. B. smaller the amount of deadweight loss created. C. larger the amount of deadweight loss created. D. more surplus that is transferred to consumers.
Suppose the reserve requirement is 20 percent. If a bank has checkable deposits of $4 million and actual reserves of $1 million, it can safely lend out:
A. $1 million. B. $1.2 million. C. $200,000. D. $800,000.
Monopolies impose the largest deadweight loss in markets with elastic demands.
Answer the following statement true (T) or false (F)
Larissa is a famous attorney with a great reputation in court. She charges her clients $300 for each hour she spends working on their cases. If she earned $450,000 in hourly wages last year, and by raising her rates to $350 per hour her income increased to $490,000 what can we say about the elasticity of demand for Larissa's legal services?
a. It is approximately equal to 2.3. b. It is approximately equal to 1.6. c. It is approximately equal to 1.0. d. It is approximately equal to 0.45. e. It is approximately equal to 0.1.