One Study of the Distribution of Wealth Indicates That the Bottom

question 24

Multiple Choice

One study of the distribution of wealth indicates that the bottom 40 percent of households hold 1 percent or less of total marketable wealth in the United States and the top 1 percent owns close to 40 percent of it. An economist might observe that these data do not include the value of human capital: the value of labor and skills embodied in a person. If we were to include human capital, which of the following people's net worth would change the most?

• A) Debra, who recently received a $25,000 bonus from her job that she has spent on an around-the-world trip
• B) Carol, who has just bought an apartment for $500,000 using savings and bank loans
• C) Betty, who has just retired but expects to live well because her retirement account is worth $1,000,000
• D) Alice, who has just completed her education as a medical doctor and now has student loans of $100,000

---

Definitions:

Tying Contracts

Agreements where the seller of a product or service requires the buyer to also purchase a secondary product or service.

Sherman Act

A landmark federal statute in the field of U.S. antitrust law passed in 1890 to protect competition and prohibit monopolistic practices.

Clayton Act

A U.S. antitrust law, enacted in 1914, aimed at promoting competition and preventing unfair business practices.

Competitive Firms

Companies that operate in a market structure characterized by a large number of sellers producing similar but slightly differentiated products, where no single seller has significant market power to determine prices.