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1	According to the Lorenz curve shown, the middle quintile of families earn:
		A)	14.1 percent of the income.
		B)	24 percent of the income.
		C)	9.9 percent of the income.
		D)	38.1 percent of the income.


2	Which of the following statements can be made based on the above Lorenz curve?
		A)	Income is more equally distributed in Sweden than it is in Brazil.
		B)	Income is more equally distributed in Brazil than it is in the United States.
		C)	Income is more equally distributed in Taiwan than it is in Sweden.
		D)	Income is more equally distributed in the United States than it is in Sweden.


3	Other things equal, tax cuts favoring the poor and increases in funding for government programs favoring the poor would be expected to:
		A)	increase income inequality, causing the Lorenz curve to bow in toward the diagonal line.
		B)	decrease income inequality, causing the Lorenz curve to bow in toward the diagonal line.
		C)	increase income inequality, causing the Lorenz curve to bow out away from the diagonal line.
		D)	decrease income inequality, causing the Lorenz curve to bow out away from the diagonal line.


4	The share distribution of income:
		A)	is an absolute measure of income.
		B)	is a relative measure of income.
		C)	takes into account changes in the standard of living.
		D)	has elements of absolute and relative measures.


5	In the United States and most other developed countries, the largest class is the:
		A)	lower class, defined as all those living in poverty.
		B)	lower class, defined as the poorest third of the population.
		C)	middle class.
		D)	upper class.


6	The way poverty is defined in United States makes this measure:
		A)	is an absolute measure.
		B)	is a relative measure.
		C)	both a relative and absolute measure.
		D)	an unfair measure.


7	Refer to the graph above. If the area of region A is 0.17 and the area of region B is 0.33, then the Gini coefficient is:
		A)	0.0561.
		B)	0.34.
		C)	0.515.
		D)	1.94.


8	Since there is a tradeoff between equality and efficiency:
		A)	redistribution of income improves economic equality without reducing economic efficiency.
		B)	income is distributed equally in an efficient economy.
		C)	the optimal level of redistribution involves a value judgment.
		D)	the optimal level of redistribution is zero.


9	A primary purpose of the 1996 Personal Responsibility and Work Opportunity Reconciliation Act was to:
		A)	reduce the negative incentive effects of welfare.
		B)	replace all cash assistance programs with non-cash assistance, like food stamps.
		C)	allow individuals to remain on welfare for a longer time period.
		D)	guarantee that no one receives assistance unless they are working.


10	When most people talk about believing in equality of income, they mean they believe in equality of __________.
		A)	effort
		B)	opportunity
		C)	skills and talents
		D)	wealth