The figure above shows two Lorenz curves, one before income redistribution and one after income redistribution. The difference between the two curves equals
A) market income.
B) money income.
C) the redistribution of income.
D) the amount of taxes paid.
C
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Elaine owns a beautiful diamond ring she purchased for $2,500. When she has it appraised she learns that it is now worth $3,000. Based on this information:
A. Elaine has experienced a $500 capital gain. B. Elaine's saving this year has increased by $500. C. Elaine's saving this year has decreased by $500. D. Elaine's wealth is unchanged.
Predatory pricing, as defined in the text, is
A) common and profitable but illegal. B) common, profitable, and legal. C) common but both unprofitable and illegal. D) common and legal but unprofitable. E) rarely observed though often alleged.
The payoff matrix of economic profits above displays the possible outcomes for Bob and Jane who are involved in game of whether or not to advertise. After each player chooses his or her best strategy and sees the result
A) only Bob would like to change his decision. B) neither player would be willing to change his or her decision unless the other player also changes his or her decision. C) if Jane does not change her decision, Bob would like to change his. D) if Bob does not change his decision, Jane would like to change hers.
If a tax takes a constant fraction of income as income rises, it is
a. regressive. b. proportional. c. progressive. d. based on the ability-to-pay principle.