Question

1. Large disparities in wages could possibly result from all but which one of the following?

A.	Parental investment in a child's human capital.

B.	Increases in the amount of middle class jobs.

C.	Skill-biased technological change.

D.	Globalization.

E.	An increase in the demand for highly skilled labor.

2. Which of the following measures would best allow one to compare the relative wealth of poor households to the typical household in an economy?

A.	The perfect-equality Lorenz curve.

B.	The Gini coefficient.

C.	The 90-10 wage gap.

D.	The 50-10 wage gap.

E.	The 90-50 wage gap.

3. What does the Gini coefficient measure?

A.	The rate of growth of income inequality over time.

B.	The degree of inequality in an income distribution.

C.	The correlation coefficient between income and education.

D.	The covariance of income and education.

E.	The degree of tax incidence paid by poor workers

4. The positive correlation between ability and human capital investments "stretches out" wages in the population, generating what?

A.	A positively skewed wage distribution.

B.	A negatively skewed wage distribution.

C.	An inconsistent wage distribution.

D.	A uniform wage distribution.

E.	A symmetric wage distribution.

5. Higher values of the Gini coefficient are associated with

A.	greater education inequality.

B.	greater income inequality.

C.	less income inequality.

D.	greater labor mobility.

Answer 1

Ans:

1) Option B

Increases in the amount of middle class jobs.

Middle class jobs include merchants, physicians, lawyers, educators. Large disparities in wages could possibly result from increase in the amount of middle class jobs.

2) Option D

The 50-10 wage gap

The 50-10 wage gap represents the wage differential between a worker in the 50th percentile of income distribution and a worker in the 10th percentile.

3) Option B

The degree of inequality in an income distribution.

Gini coefficient is a measure of inequality of income distribution. Gini coefficient measures the degree of inequality in an income distribution.