43) A Lorenz curve illustrates the distribution of a society\'s income. The vert

Question

43) A Lorenz curve illustrates the distribution of a society's income. The vertical axis measures the 43) A) cumulative dollar value of income while the horizontal axis measures the cumulative percentage of households B) percentage of wealth while the horizontal axis measures the percentage of income C) percentage of income while the horizontal axis measures percentage of households. D) cumulative percentage of income while the horizontal axis measures cumulative percentage of households. 100 Country A Country iB 60-1 country C Country D 6 80 40 20 20 40 60 80 100 44) 44) The above figure shows the Lorenz curves for four different countries. Which country has the most unequal distribution of income? A) country A B) country B C) country C D) country D 45) The above figure shows the Lorenz curves for four different countries. If country C implemented a45) policy of redistribution from tich to poor, its Lorenz curve would A) become positively sloped. C) move toward country B's B) move toward country D's. D) move above the line of equality 46) Human capital is 46) A) a machine designed for humans. B) people's accumulated skill and knowledge C) an individual's income. D) None of the above answers is correct 47) Information technologies are- _ for low-skilled labor and a , for high-skilled 47) labor. A) complement; substitute C) substitute substitute B) complement, complement D) substitute; complement

Explanation / Answer

43) The lorenzo curve shows the income inequality by playing cumulative percentage of income on y axis and cumulative percentage of population on the xaxis. Thus answer is D.
44) Country D us farthest away from the line of perfect equality thus it has the highest inequality. Option D is correct.

45) Redistribution will move country C towards country B. It will move towards the line of perfect equality due to reduction in inequality. Answer is C.

46) Human capital consists of people's accumulated skills and knowledge which can increase their productivity. Thus answer is B.

47) IT is a substitute for low skilled labor who lack the knowledge of the technology while it is a compliment for high skill labor who have knowledge of the technology and have the skill to use it. Answer is D

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