In the country of Konswano there are 4 people. Each person lives for 40 years. In their first 10 years, they earn no income. In the next 20 years, they earn $40,000 per year and in the last 10 years they earn no income. Each year their consumption is $20,000. If everyone in Konswano is 25 years old, then the Lorenz curve for income is _______________.

above the line of equality
equal to the line of equality
below the Lorenz curve for wealth
above the Lorenz curve for wealth

In the country of Konswano there are 4 people. Each person lives for 40 years. In their first 10 years, they earn no income. In the next 20 years, they earn $40,000 per year and in the last 10 years they earn no income. Each year their consumption is $20,000. If the people in Konswano are aged 5, 15, 25, and 35, then the distribution of wealth _______________________.

is illustrated by the line of equality
has greater inequality than when everyone is 25 years old
is illustrated by a curve above the line of equality
has greater equality than when everyone is 25 years old

Sue has human capital worth $500,000 and tangible capital of $100,000. Todd has human capital worth $10,000 and tangible capital of $50,000. The return on each type of capital is 10 percent a year. Sue's income is _______ and Todd's income is _______.

$50,000; $1,000
$60,000; $6,000
$600,000; $60,000
$10,000; $5,000

Sue has human capital worth $500,000 and tangible capital of $100,000. Todd has human capital worth $10,000 and tangible capital of $50,000. The return on each type of capital is 10 percent a year. According to a national survey, Sue is _______________.

10 times wealthier than Todd
twice as wealthy as Todd
as wealthy as Todd
50 times wealthier than Todd

The table shows the distribution of wage rates and the labor supply schedule. _______ workers earn an average income of $105 a day, and _______ workers earn an average income of $225 a day.

10; 30
30; 10
20; 20
30; 20

The table shows the distribution of wage rates and the labor supply schedule. The distribution of hourly wage rates ______________________.

a straight line
skewed with a long tail
more equal than the distribution of daily income
less equal than the distribution of daily income

If both rich and poor families pay $1,500 a family in taxes, the tax scheme is __________.

negative
proportional
regressive
progressive

In the country of Wilkes, taxes are $5 million and benefits are $4 million. Income from labor is $25 million and income from capital is $15 million. What is market income?

$24 million
$29 million
$40 million
$25 million

The government of Pinafore implements a negative income tax. Families who earn zero income receive a monthly transfer payment of $1,200 from the government. When the family earns a monthly income of $1,400, the government payment decreases to $990. What is the marginal tax rate?

17.5 percent
82.5 percent
15 percent
85 percent

The government of Pinafore implements a negative income tax. Families who earn zero income receive a monthly transfer payment of $1,200 from the government. When the family earns a monthly income of $1,400, the government payment decreases to $990. What is the monthly break-even income?

$1,412
$1,400
$8,000
$1,200

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