The diagram shows the Lorenz curves of Country A and B. Which of the following is correct?

Country A has a more equal distribution of income.

Which of the following is correct about corporate income taxes?

Higher tax rates leads to disincentive effects for firms.

Which of the following statements is INCORRECT?

Equity is achieved when everyone has the same amount of income.

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3.4 Economics of inequality and poverty (includes HL only calculation)

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1
(HL only) An individual earns $30,000 per year. Calculate the total amount of tax paid by the individual.
$4500
$6000
$9000
$10000
2
The diagram shows the Lorenz curves of Country A and B. Which of the following is correct?
Country A has a more equal distribution of income.
The Gini coefficient of country A is larger.
Country B has a more equal distribution of income.
The richest 60% of people in country A contributes 40% of national income.
3
The following table shows the tax rates of a personal income tax. It shows a...
Indirect tax system.
Regressive tax system.
Proportional tax system.
Progressive tax system.
4
Income and wealth inequality may lead to...
Higher living standards for the whole country in general.
Higher government revenue.
Social and political tensions
incentives for people to work harder.
5
Which of the following worsens income inequality?
Higher investments on primary education.
Increasing minimum wage.
Stricter anti-discrimination laws.
Lower transfer payments.
6
Which of the following is correct about corporate income taxes?
Higher tax rates make income distribution less equal.
Higher tax rates leads to disincentive effects for firms.
Higher tax rates encourage firms to invest in the long term.
They are imposed on the annual revenues earned by private firms.
7
Which of the following statements is INCORRECT?
Equity is achieved when everyone has the same amount of income.
The Gini coefficient is always between 0-1.
People of lower income are more likely to incur debts.
Economic inequality means unequal distribution of income or wealth.
8
(HL only) An individual earns $50,000 per year and pays an income tax of $3,000. Calculate the average tax rate.
8%
10%
4%
6%
9
Which of the following is NOT an indicator to measure poverty?
Minimum income standards
Gini coefficient
Multidimensional poverty standards
International poverty lines
10
Which of the following is NOT a cause of economic inequality?
Progressive tax systems.
Trade liberalization
Globalization and technological change.
Unequal opportunities for education and healthcare.

3.4 Economics of inequality and poverty (includes HL only calculation) Flashcards | StudBud