The data in the textbook used to examine income distribution is presented in ter

Question

The data in the textbook used to examine income distribution is presented in terms of which of the following?

(2pts)

deciles of the population ranked from lowest to highest

real GDP per capita

quintiles of the population ranked from lowest to highest

real GDP

quartiles of the population ranked from lowest to highest

2)

Which of the following is true about the quintiles that are used to measure income inequality in the US?

(2pts)

Each quintile contains 20% of the population (the contain equal numbers of people.

The number of hours worked is much higher in the top 20% than it is in the bottom 20% of the population.

The income data used is corrected for taxes and transfer payments.

All of the above

None of the above

3)

According to the textbook, an individual's income is determined by which of the following equations?

(2pts)

labor income plus asset income plus transfer payments minus taxes.

nominal income divided by some measure of the price level

salary plus rent plus profit plus capital gain

hours worked multiplied by the hourly wage.

4)

The relationship between cumulative percentage of households and cumulative percentage of income is measured by the

(2pts)

Lorenz Curve

Veil of Ignorance

Engel Curve

Least-Cost Curve

Marginal Productivity Theory

Explanation / Answer

1) For measuring income distribution, or incom inequality, population is divided into quintiles and then each quintile percenatge share of income is measured. Select quintiles of the population ranked from lowest to highest real GDP

2) Usually the top 20% of the population does not work much but earn an income that is many times higher than the bottom 20%. Select Each quintile contains 20% of the population

3) Individual income is both labor and nonlabor. Labor part is earned through wages and nonlabor part is earned thorugh stock market, or bonds market. Select labor income plus asset income plus transfer payments minus taxes.

4) Lorenz curve. It measures income inequality.

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