This quiz works best with JavaScript enabled. Home > Economics > Income > Distribution > Income Distribution – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Income Distribution Quiz 1 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A problem of universal benefits is A) It is regressive. B) Disincentive to work. C) Free Rider problem. D) Poverty trap. Show Answer Correct Answer: C) Free Rider problem. 2. In most places, the rich will always get richer and the poor will always get poorer. A) True. B) False. C) Not stated. D) None of above. Show Answer Correct Answer: C) Not stated. 3. Which of the following does not explain why wealth is unevenly distributed: A) Different levels of wages. B) Property ownership. C) Taxes on inheritance. D) Entrepreneurship/ enterprise. Show Answer Correct Answer: C) Taxes on inheritance. 4. People living below a certain income threshold or unable to afford certain basic goods & serv A) Absolute poverty. B) Relative poverty. C) Neither 1 nor 2. D) None of above. Show Answer Correct Answer: A) Absolute poverty. 5. Which of the following factors of production gives the reward profit? A) Land. B) Labour. C) Capital. D) Enterprise. Show Answer Correct Answer: D) Enterprise. 6. What is the Gini Index? A) Space between the Lorenz Curve and perfect equality. B) The Gini Coefficent translated to be out of 100. C) The Gini Coefficent multiplied by the Lorenz Curve. D) None of above. Show Answer Correct Answer: A) Space between the Lorenz Curve and perfect equality. 7. A social insurance system that provides benefits to Americans who are sick, retired or disabled. A) Social Security. B) Medicare. C) Abilities. D) Taxes. Show Answer Correct Answer: A) Social Security. 8. What does the Lorenz Curve illustrate? A) Inequality. B) Perfect equality. C) Almost perfect equality. D) None of above. Show Answer Correct Answer: A) Inequality. 9. Uneven distribution of income can be due to: A) Different Abilities. B) Differences in age and experience. C) Diffferences in gender. D) All the above. Show Answer Correct Answer: D) All the above. 10. A mechanism which means people are forced to stay poor and they cannot escape from poverty. A) Income inequality. B) Underdevelopment. C) Poverty trap. D) All of the above. Show Answer Correct Answer: C) Poverty trap. 11. Which does not cause income inequality? A) Improved education provision. B) Poor skills and training. C) Age. D) Increased unemployment. Show Answer Correct Answer: A) Improved education provision. 12. The term used for gathering consumer preferences for products and services A) Questionnaire. B) Market Research. C) Survey. D) Google Search. Show Answer Correct Answer: B) Market Research. 13. The average tax rate increases when income increases. A) Regressive income tax. B) Negative Income tax. C) Proportional income tax. D) Progressive income tax. Show Answer Correct Answer: D) Progressive income tax. 14. It is better to have a Gini Coefficent closer to ..... A) 100%. B) 10. C) 1. D) 0. Show Answer Correct Answer: D) 0. 15. The poor in rich countries are not grateful that they are better off than the poor in really poor countries. A) True. B) False. C) Not stated. D) None of above. Show Answer Correct Answer: C) Not stated. 16. Fairness, or an acceptable distribution of income and wealth in society A) Efficiency. B) Equality. C) Equity. D) All of the above. Show Answer Correct Answer: C) Equity. 17. Wages will be higher for individuals who A) Are low skilled. B) Work in industries where there is excess supply of staff. C) Have high levels of skills. D) Work in industries where there is low demand for their skills. Show Answer Correct Answer: C) Have high levels of skills. 18. A numerical measure of inequality A) Lorenz curve. B) Gini Coefficient. C) Negative income tax. D) All of the above. Show Answer Correct Answer: B) Gini Coefficient. 19. Income earned from ownership of property A) Taxes. B) Wages. C) Wealth. D) Rent. Show Answer Correct Answer: D) Rent. 20. GMI stands for ..... A) Grand Main Institute. B) Gross Main Income. C) Gross Monthly Income. D) Grand Monthly Income. Show Answer Correct Answer: C) Gross Monthly Income. 21. Studies have shown that the poor in wealthy countries are able to cope better than the poor in poorer countries. A) True. B) False. C) Not stated. D) None of above. Show Answer Correct Answer: B) False. 22. The farther away a Lorenz curve for income is from the line of equality, the A) More equally wealth is distributed. B) More equally income is distributed. C) Less equally income is distributed. D) None of the above. Show Answer Correct Answer: C) Less equally income is distributed. 23. Figure 1 shows the gap between the richest and the poorest in South Asia is smaller that that in Latin America. A) True. B) False. C) Not stated. D) None of above. Show Answer Correct Answer: A) True. 24. Cutting benefits A) Will cut Government spending. B) Will act as incentive for people to work, so reduce inequality. C) Will decrease incomes for the poorest in society. D) All the above. Show Answer Correct Answer: D) All the above. 25. Per the census, approx. what percentage of households from the lowest quintile move to a higher quintile after 10 yrs? A) 0.6. B) 0.4. C) 0.2. D) 0.1. Show Answer Correct Answer: A) 0.6. 26. What does the Gini Coefficent identify? A) Population distribution. B) Welfare of people in a country-Quality of Life. C) GDP of a country. D) Economic inequality/equality. Show Answer Correct Answer: D) Economic inequality/equality. 27. Income amount remaining after a year's worth of deductions have been taken. A) Net Monthly Income (NMI). B) Net Annual Income (NAI). C) Gross Monthly Income (GMI). D) Gross Annual Income (GAI). Show Answer Correct Answer: B) Net Annual Income (NAI). 28. Which of the following factors of production gives the reward interest? A) Land. B) Labour. C) Capital. D) Enterprise. Show Answer Correct Answer: C) Capital. 29. Which of the following is a reason why income in the UK is unevenly distributed? A) There is a difference in the wages that people earn. B) All people pay the same amount of tax. C) All people earn the same amount. D) Income-earning assets are distributed fairly. Show Answer Correct Answer: A) There is a difference in the wages that people earn. 30. A progressive tax A) Takes less tax from low income earners. B) Takes a larger percentage of tax from low income earners. C) Takes a smaller percentage in tax from low income earners. D) Takes the same percentage in tax from all earners. Show Answer Correct Answer: C) Takes a smaller percentage in tax from low income earners. Next →Related QuizzesIncome QuizzesEconomics QuizzesIncome Distribution Quiz 2 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books