economic inequality Flashcards
The figure shows income distribution in the world. You can click on the figure to enlarge it.
Based on this information, which of the following statements are correct?
the richest 10% of botswana has similar gross domestic income per capita as 10% richest in japan
the poorest 10% of japan has higher gross domestic income per capita as 10% porrest in USA
Which of the following statements are correct regarding endowments?
endowments are facts about someone that may affect their income
different endowments lead to citizens engaging in aysemtric economic interactions, creating different classes of citizens
In an economy with population 100, there are u unemployed, n employees and 100 – u – n owners of firms. Each firm has one owner. The firms are identical, so they employ the same number of workers and they pay the same wage. The diagram shows the Lorenz curve of the economy. You can click on the figure to enlarge it.
Based on this information, which of the following statements is correct?
the workers each reieve 0.8% of the aggregate income as a wage
In the economy described in the previous question, a new labour-saving technology is introduced. This results in:
lower wage rate and higher gini coeffceint in the short run
Question 5/12
In an economy with a population of 100, there are 80 farmers and 20 lenders. The farmers use the funds to finance the planting and tending of their crops. The rate of profit for the harvest is 12.5%, while the interest rate charged is 10%. Compare the following two cases:
Case A: all farmers are able to borrow.
Case B: only 50 farmers are able to borrow.
Based on this information, which of the following statements is correct?
there is a 10% increase in the gini coeffiecnet in case B compared to case A
The graph shows the inequality in wealth, earnings and disposable income in the US, Sweden and Japan using the Gini coefficient. You can click on the figure to enlarge it.
Based on this information, which of the following statements are correct?
welath is unequally distributed then earnings in all 3 countries
sweeden retains relativley equal disposible income distribution due to taxes and transfers
In his Economist in action video, which of the following were NOT among the reasons that Piketty gave for the fall in the incomes of the very rich during the 20th century?
the russian revolution
Which of the following statements are correct regarding a segmented labour market?
1) segmented labour market occurs when there are barriers preventing free movment of workers between different sections of the labour market
2) in some countries men and women can be in different sectors of a segmented labour market
The diagrams show the proportion of children in earnings quantiles, conditional on their father’s earnings quantile in the US and Denmark, respectively. You can click on the figure to enlarge it.
in the US 20% of the poorest, only 7.4% managed to reach the top 20% richest in USA
The diagram depicts the feasible frontier of the incomes of the rich and the poor. You can click on the figure to enlarge it. E is the point where both the rich and the poor have an equal income. Based on this information, which of the following statements is correct?
between D AND F less YED for the poor leads to less YED for the rich
According to James Heckamn’s Economist in action video, which of the following individual attributes are NOT among the reasons for persistent poverty in a family from generation to generation?
inherited IQ
Which of the following statements is correct regarding policies on inequality?
providing education is a way to raise endowments for less well off people
