Question 1

What is a Lorenz curve?

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Question 2

One way to look at inequality is to look at the size distribution of income.What are two other approaches to measuring inequality? When measuring income distribution according to class,how does the class distribution in most developed countries compare to most developing countries? Recently,changes in the US class distribution of income by class have taken on what shape and why is this so?

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Question 3

Describe the difference between share distribution of income and socioeconomic distribution of income.

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Question 4

Give three reasons why an equal distribution of income is not necessarily fair.Discuss each of them.

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Question 5

Explain the difference between wealth and income.How does the distribution of income compare to the distribution of wealth in the U.S.and what does this imply about the respective Lorenz curves for wealth and income?

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Question 6

How is the poverty line calculated? Is it an absolute or a relative measure of poverty?

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Question 7

Some people in the U.S.argue that the poverty line is too high and some argue that it is too low.Explain both arguments by highlighting the difference between absolute and relative measures of poverty.

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Question 8

How does the Lorenz curve for the U.S.compare to the Lorenz curve for most developing and developed countries? What does this mean?

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Question 9

How does the distribution of income compare to the distribution of wealth in the U.S.? What does this imply about the respective Lorenz curves?

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Question 10

What is the Gini coefficient,and what is it used for? What would a Gini coefficient that was close to zero imply about inequality?

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Question 11

Describe five major U.S.expenditure programs that are used to redistribute income

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Question 12

What is the difference between wealth and income? Which is a flow concept? Which is a stock concept?

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Question 13

What are the social costs of poverty?

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Question 14

Some critics complain that official U.S.poverty statistics overstate poverty because they do not consider the value of in-kind transfers.A large portion of the in-kind benefits for many poor families is made up of non-cash benefits such as food vouchers,housing subsidies and medical insurance.Should the value of these noncash benefits such as medical insurance be counted as an improvement in the economic well being of low-income families for purposes of calculating poverty statistics? Why or why not?

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Question 15

What are the distributive consequences of the U.S.income taxes,the Social Security tax,sales taxes,and property taxes? (Are they progressive,proportional,or regressive?)

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Question 16

In some countries the tax system is more progressive than in the U.S.What impact does this have on income inequality? What impact do you think this has on entrepreneurial activity?

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Question 17

How has income distribution changed in the U.S.since 1929? When did inequality decrease and when did it increase?

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Question 18

What does it mean if the gap between a Lorenz curve and the diagonal line gets smaller over time? Explain.

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Question 19

What is the official definition of poverty in the U.S.?

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Question 20

What is a Lorenz curve? What does it mean if the gap between a Lorenz curve and the diagonal line gets smaller over time?

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Quiz 18: Who Gets What the Distribution of Income