Chapter 19

Question 1

In-kind benefits are a way of correcting

Answer 1

Inequity

Question 2

Public housing is an example of

Answer 2

in-kind income

Question 3

Wealth refers to

Answer 3

the market value of assets people own.

Question 4

How income is distributed is typically measured using

Answer 4

Personal income

Question 5

A graphic illustration of the cumulative size distribution of income is known as the

Answer 5

lorenz curve

Question 6

If income is distributed equally, the

Answer 6

Lorenz curve is a straight line.

Question 7

If a greater portion of income is distributed to those in the highest income quintile, the

Answer 7

Lorenz curve sags below the diagonal line of absolute equality.

Question 8

If the area between the diagonal line of absolute equality and the Lorenz curve is greater for the United States than for Japan, we can conclude that the

Answer 8

distribution of income in Japan is closer to being equal than in the United States.

Question 9

If the area between the diagonal line of absolute equality and the Lorenz curve is greater for China than for the United States, we can conclude that the

Answer 9

distribution of income in China is less equal than in the United States.

Question 10

The federal income tax is designed to

Answer 10

shift the Lorenz curve inward.

Question 11

A mathematical summary of inequality based on the Lorenz curve is known as the

Answer 11

Gini coefficient.

Question 12

In the United States between 2000 and 2019, the Gini coefficient

Answer 12

increased, indicating greater income inequality.

Question 13

If the Gini coefficient is greater for the United Kingdom than for Japan, we can conclude that the

Answer 13

distribution of income in the United Kingdom is less equal than in Japan

Question 14

The size distribution of income

Answer 14

tells how personal income is divided up among households or income classes.

Question 15

(Figure 33.1) In Alpha, the lowest 20 percent of families receive approximately what percentage of income?

Answer 15

5 percent

Question 16

(Figure 33.1) In Omega, the lowest 40 percent of families receive approximately what percentage of income?

Answer 16

10 PERCENT

Question 17

(Figure 33.1) Suppose that the Gini coefficient for Omega is 0.55. The Gini coefficient for Alpha must be

Answer 17

less than .55

Question 18

Which of the following is an example of an explicit income transfer?

Answer 18

a Social Security pension paid to a retired factory worker

Question 19

The argument against greater equality in the distribution of income in the United States hinges predominantly on

Answer 19

loss of incentive

Question 20

(Figure 33.2) Based on the Lorenz curves for the four different economies, which economy would the lowest 20 percent of families receive the smallest share of the total income?

Answer 20

A