Up To Date Economics MCQs – Competitive Income Inequality MCQs ( Economics ) MCQs
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Latest Economics MCQs
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Latest Income Inequality Mcqs ( Economics ) Mcqs
The most occurred mcqs of Income Inequality Mcqs ( Economics ) in past papers. Past papers of Income Inequality Mcqs ( Economics ) Mcqs. Past papers of Income Inequality Mcqs ( Economics ) Mcqs . Mcqs are the necessary part of any competitive / job related exams. The Mcqs having specific numbers in any written test. It is therefore everyone have to learn / remember the related Income Inequality Mcqs ( Economics ) Mcqs. The Important series of Income Inequality Mcqs ( Economics ) Mcqs are given below:
The Benazir Benefit income Scheme is a good example of ?
A. a benefit in kind.
B. a universal (social insurance based) benefit
C. a means tested cash benefit
D. none of the above
VAT is a good example of which kind of tax ?
A. Direct
B. specific
C. Ad valorem
D. Excise duty
Where a tax can be shifted the incidence depends on ?
A. who is legally obliged to pay the tax
B. whether there is perfect or imperfect information
C. elasticities of demand and supply
D. how many producers there are:
Tax incidence is the ?
A. behaviour of shifting the tax to another party
B. ultimate distribution of a tax’s burden
C. structure of the tax.
D. measure of the impact the tax has on employment and output
A progressive income tax means that those with a higher income pay ?
A. a higher percentage of their income in taxes then low income people
B. all the taxes in the economy
C. the same percentage of their income in taxes as low income people all the taxes in the economy.
D. a lower percentage of their income in taxes than low income people
The marginal tax rate is ?
A. the tax rate you pay on any additional income that you earn.
B. the additional tax you pay divided by your total income
C. the total amount of tax you pay divided by your total income
D. your total income divided by the total amount of tax you pay.
Vertical equity holds that ?
A. those with equal ability to pay should bear unequal burdens
B. those who benefit the most from government service should bear the higher tax burden
C. those will equal ability to pay should bear equal tax burdens.
D. those with greater ability to pay should pay more
A Gini coefficient of zero means that the ?
A. the income is split equally between the top 20% and the rest of the distribution
B. income is equally distributed
C. all the income is received by the top 20% of the income distribution
D. one person has all the income and every one else has nothing
Supply of land in a given use ?
A. is perfectly inelastic since there is a fixed amount of land
B. will be perfectly inelastic in the long run. but upward sloping in the short run
C. is perfectly elastic since there is fixed amount of land
D. will be upward sloping because as land becomes more valuable in once use, the amount of land made available for that use will increase
The stock of knowledge, skills and talents that people possess is called ?
A. skill capital
B. training investment
C. skill-building investment
D. human capital
Unemployment benefits may increase the unemployment rate because unemployment benefits ?
A. enable people to quit searching for work
B. reduce the cost of job search
C. encourage people to quit their jobs
D. reduce the benefits of additional job searching
If output price is constant, the marginal revenue product of labour curve will have the same shape as the ?
A. marginal cost curve
B. total variable cost curve
C. total product of labour curve
D. marginal product of labour curve
The marginal revenue product of labour is ?
A. the additional revenue a firm earns by employing on additional unit of labour
B. the marginal product of capital times the price of labour.
C. the additional profit a firms earns by employing one additional unit of labour
D. the additional revenue the firm makes by selling one unit of labour.
New technology in the form of computer spreadsheets has increased the productivity of accountants. This will cause ?
A. the demand curve for accountants to shift to the right, since the productivity of accountants has increased
B. firms to move down their demand curves for accountants
C. the demand curve for accountants to shift to the left, since it requires fewer accountants than it did before to do the same amount of work.
D. firms to move up their demand curves for accountants
As the wage rate per hour increases, the opportunity cost of leisure ?
A. decreases since the customer now has more income to spend
B. increases since the cost of forgoing one hour of work increases
C. remains constant
D. may increase of decrease depending on the individual’s preferences.
Asymmetric Information MCQs
Assuming that leisure is a normal good. if an individual’s labour supply curve is backward bending then the ?
A. substitution effect outweighs the income effect
B. income effect is zero
C. income effect outweighs the substitution effect
D. income effect and the substitution effects are equal
Assuming leisure is a normal good, if the income effect is greater than the substitution effect a wage increase ?
A. will increase labour supply.
B. will decreases labour supply
C. could cause either an increases or a decrease in labour supply
D. will have no effect on labour supply
Constrained choice is relevant for households ?
A. making labour-supply decisions but not spending decisions.
B. making both spending and labour-supply decisions
C. considered to be ‘poor’ but not for those who are considered to be ‘rich’
D. making spending decision but not labour-supply decision.
The greatest advantage of a negative income tax is that it ?
A. generates a smaller disincentive to work than most alternative anti-poverty policies.
B. would not provide benefits to lazy people
C. reduces the cost to the government of fighting poverty
D. ensures that the poor actually receive what the government thinks they need does all these answers.
An increase in the minimum wage will cause a relatively large increase in unemployment among ?
A. skilled workers if the demand for labour is relatively elastic
B. unskilled workers if the demand for labour is relatively elastic
C. unskilled workers if the demand for labour is relatively inelastic
D. skilled workers if the demand for labour is relatively inelastic
Rawls’s suggestion that policy should be directed at maximizing the welfare of the least well off person in society is derived from ?
A. the idea that people a veil of ignorance as policy as if behind a veil of ignorance as to what their circumstances might be in society, and the ignorant
B. the idea that people should consider policy as if behind a veil of ignorance as to what their circumstances might be in society, and the idea that people will then be particularly concerned about the possibility that they might find themselves at the bottom of the income distribution
C. people should be looked after the idea that people should consider policy as if behind a veil of ignorance as to what their circumstances might be in society, and the idea that as long as there is no theft then there is no need for governments to intervene and redistribute income.
D. the idea that everyone in society should have an equal income
Rank utilitarianism liberalism, and libertarianism in sequence from the political philosophy that would redistribute income the greatest to the one that would redistribute income the least?
A. liberalism, libertarianism, utilitarianism
B. All three political philosophies argue for similar degree of income redistribution
C. utilitarianism, liberalism, libertarianism
D. libertarianism liberalism, utilarianism
E. libertariansim, utilitarianism, libertarianism
Mariam earns more than Seamus and she came by her income fairly and honestly which of the following political philosophies would argue against the redistribution of income from Mariam to Seamus ?
A. utilitarianism
B. libertarianism
C. all of the above
D. none of the above
Because people’s income vary other the life cycle and because there are transitory shocks to people’s incomes the standard measures of income distribution ?
A. exaggerate the inequality of living standards
B. understate the inequality of living standards
C. could exaggerate or understate the inequality of living standards depending on whether the transitory shocks are positive or negative
D. accurately represent the true inequality of living standards
The National Economy MCQs
Permanent income is ?
A. Social Security income of the elderly and disabled
B. none of these answers
C. equal to the minimum wage
D. wages fixed by a union or other labour contract
E. a person’s normal or average income
In Pakistan the term the poverty trap is used to describe the fact that ?
A. the Pakistan benefit system makes being poor vary degrading
B. poor people are excluded from most leisure and social activities
C. if poor people earn more their benefits fall, making them no better off.
D. in the Pakistan poor people are heavily taxed
Housing Benefit is a good example of ?
A. a means tested cash benefit
B. a benefit in kind
C. a universal (social insurance based) benefit
D. none of the above
An example of an indirect tax is ?
A. a tax on profits.
B. VAT
C. income tax
D. inheritance tax
Tax shifting ?
A. is the ultimate distribution of a tax’s burden
B. occurs when households can alter their behaviour and do something to avoid paying tax
C. occurs when taxes cause prices to increase but wages to fall.
D. is the way in which a tax is structured
A tax whose burden expressed as a percentage of income, falls as income increases is a ?
A. progressive tax
B. benefits received tax
C. regressive tax
D. proportional tax
A tax whose burden is the same proportion of income for all households is ?
A. a progressive tax
B. a proportional tax
C. an equal tax
D. a regressive tax
The total amount of tax you pay divided by your total income is the ?
A. marginal tax rate
B. average tax rate
C. proportional tax rate
D. total tax rate
Horizontal equity holds that ?
A. those with equal ability to pay should bear unequal tax burdends.
B. those who benefit the most from government services should have the greatest voice in determining what gets produced
C. those who benefits the most from government services should bear the higher tax burden.
D. those with equal ability to pay should bear equal tax burdens.
A Gini coefficient of one means that ?
A. income is distributed equally
B. all the income is received by the top 20% of the income distribution
C. the income is split equally between the top 20% and the rest of the distribution.
D. one family has all the income and every one else has nothing.
The Gini coefficient is ?
A. the ratio of the percentage of total income received by the top 20% of families to the percentage of total income received by by the bottom 20% of families
B. a commonly used measure of the degree of inequality in an income distribution
C. the most common way of representing the income distribution graphically
D. a commonly used measure of the degree of inequity in an income distribution
The term ‘rent’ as it is used by economists. refers to ?
A. the return to any factor of production that is in fixed supply
B. the amount paid each year by a tenant for an apartment
C. the profit earned by the owner of any housing unit.
D. any profit earned by stockholders when they sell their stock
If labour market discrimination crowds women into a limited number of occupations so that the number of occupations available to men increases, then ?
A. the wages of men will be lower but the marginal productivity of men will be higher than it otherwise would be
B. wages of men will be higher but the marginal productivity of men will be lower than it otherwise would be
C. both the wages and the marginal productivity of men will be lower than they otherwise would be
D. both the wages and the marginal productivity of men will be higher than they otherwise would be
An unemployed salesperson has been offered a job paying Rs500 a week. He turns that job down and continues to search for another job that pays more. The cost of this continued search is ?
A. Rs difference between the weekly salary he finally accepts and the Rs500 weekly salary that he has forgone
B. The Rs500 weekly salary that he has forgone and the monetary costs incurred by continuing to search
C. the Rs500 weekly salary that he has forgone to search for another job
D. Rs0, since he is currently unemployed
The formula for the marginal revenue product of labour (L is for labour, X is the product) is ?
A. (MPL) (PX)
B. MPL + PX
C. PX/MPL
D. MPL/PX
In a competitive labour market firms will hire labour up to the point where the marginal revenue product of labour equals ?
A. the price of the product
B. the marginal product
C. total labour cost
D. the wage rate
Differences in wages that result from differences in working conditions are known as ?
A. search differentials
B. occupational differentials
C. job differentials.
D. compensating differentials
Comparative GDP MCQs
If the income effect is smaller than the substitution effect, higher net wages will ?
A. increase the demand for labour
B. reduce the supply of labour.
C. increase the supply of labour
D. have no effect on the supply of labour
The substitution effect of higher wages suggests that as the wage rate increases ?
A. leisure becomes more expensive and households buy more of it
B. leisure becomes less expensive and households buy more of it
C. leisure becomes more expensive and households buy less of it
D. leisure becomes less expensive and households buy less of it.
The idea that the demand for car workers stems from the demand for cars is ?
A. indirect demand
B. output demand
C. derived demand
D. the value of the marginal product of auto workers.
The poverty trap refers to ?
A. a situation in which those receiving state benefits are discriminated against by employers and so find it more difficult to find jobs.
B. a situation in which workers are unable to find jobs.
C. a situation in which those receiving state benefits may be almost no better off if they choose to work more to earn more because doing so will reduce the amount of benefit income to which they are entitled and increase the amount to tax
D. a situation in which those receiving state benefits may be almost no better off if they choose to work more to earn more income for themselves and their families because doing so will mean they have to pay back the benefits they have previously received
Current anti-poverty programs discourage work because ?
A. benefits are reduced at such a high rate when recipients earn more income that there is little or no incentive to work once one is receiving benefits.
B. anti-poverty programs attract naturally lazy people to begin with.
C. they make recipients more comfortable than most middle-class citizens.
D. in order to be eligible for benefits a recipient cannot have a job
Rawls’s miximin criterion does not mean that there should be redistribution so as to equalise everyone’s incomes in society because ?
A. such redistribution would not maximize the total income of all members of society
B. Such redistribution would mean that those who worked hard were no better off than those who were lazy and this would be unfair.
C. Such redistribution would remove the incentive to work hard, so society’s total income would fall, and so the least well off person would be worse off than they could be under a system in which there was some inequality income.
D. such redistribution would amount to confiscation of honestly earned income from higher earners and so would be unjust.
Utilitarianism suggests that the government should choose policies that maximize the total utility of everyone in society by ?
A. allowing each individual to maximize their own utility without interference from the government
B. redistributing income from rich to poor because due to the diminishing marginal utility of income, taking a pound from the rich reduces their utility by less than the gain in utility generated by giving a pound to the poor
C. redistributing income from rich to poor because this is what the members of society would choose to do if they were behind a veil of ignorance
redistributing income from rich to poor because this would maximize the well-being of the worst-off person in society
The maximin criterion suggested by Rawls’s theory of justice means that the government should aim to ?
A. maximize the economic freedom of individuals by minimizing government interference in private decision making
B. Maximize the well-being of the worst-off person in society
C. minimize the difference between the rich and poor
D. Maximize the total utility of society
E. minimize the well-being of the best-off person in society
If people can borrow and lend to perfectly smooth out their lifetime living standards, then ?
A. transitory income is a good measure of the distribution of living standards
B. current annual income is a good measure of the distribution of living standards.
C. permanent income is a good measure of the distribution of living standards.
D. life-cycle income is a good measure of the distribution of living standards.
E. none of these answers
Because in-kind transfers are not accounted for in standard measures of income distribution the standard measures of income distribution ?
A. understate the inequality of living standards
B. accurately represent the true inequality of living standards
C. exaggerate the inequality of living standards
D. could exaggerate of understate the inequality of living standards depending on whether the transfers are goods or services.