The more top-heavy income distribution is, the closer the Lorenz curve will be to the line of perfect equality
Indicate whether the statement is true or false
FALSE
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In the long run, a profit-maximizing monopolistically competitive firm sells at a price that is:
A. equal to average total cost. B. equal to marginal cost. C. below average total cost D. the same as in perfect competition.
According to the text, Israelis living on a kibbutz in Israel
a. leave the economic decisions to the economists on the kibbutz b. are adverse to profit-maximizing behavior c. shifted from manufacturing to farming in the 1960s d. behave according to the MC = MR rule e. act communally so do not let prices affect their decisions
Financial intermediaries handle a larger flow of funds than do primary markets primarily because financial intermediaries:
A. can lower transaction costs and increase liquidity for savers. B. have government-regulated prices, so there is little competition. C. do not have to worry about information asymmetry. D. have a government-provided monopoly.
If the market price of a product falls and as a result total revenue of firms falls, we can conclude that
A. demand is inelastic in this price range. B. the product's price is above the midpoint of its demand curve. C. the demand curve is horizontal. D. demand is elastic in this price range.