In the figure above, in which country do the lowest-income 30 percent of households have the highest fraction of the nation's income?
A) Country A
B) Country B
C) Country C
D) It is impossible to answer the question without more information.
A
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Suppose a paper mill earns $1,000,000 in profits when it pollutes a river, and it can abate pollution at a cost of $120,000. The effects of the pollution are confined to a single farmer who earns $400,000 if the water he uses from the river is clean, and $300,000 if it's polluted. Suppose there is no law preventing the firm from polluting the river. Which of the following describes an efficient outcome in this case?
A. The owner of the mill is unable to pay the farmer enough to secure his permission to pollute the river. B. The farmer is unable to pay the owner of the mill enough to get him to stop polluting. C. The owner of the mill pays the farmer $110,000 for his permission to pollute the river. D. The farmer pays the owner of the mill $90,000 to stop polluting.
An example of a real-life rule that might constrain people's behavior is:
A. minimum wage legislation. B. having 24 hours in a day. C. the earth's limited supply of oil. D. All of these are examples of real-life rules.
Income inequality tends to be greatest in
A. Richest countries. B. Middle-income countries. C. Poorest countries. D. None of the choices are correct.
Graphically, the market supply curve is obtained by
A. horizontally summing quantity supplied at various prices for individual producers. B. vertically summing quantity supplied at various prices for individual producers. C. a change in quantity supplied. D. changing the ceteris paribus conditions.