Which of the Following Represents a Problem in Measuring Inequality

question 89

Multiple Choice

Which of the following represents a problem in measuring inequality?

• A)Measurements of income distributions typically include in-kind transfers, which distort the measure of inequality.
• B)A normal life-cycle pattern causes inequality in the income distribution but may not reflect inequality in living standards.
• C)Transitory income is a better measure of inequality than permanent income.
• D)Both a and b are correct.

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Definitions:

AFC

stands for Average Fixed Cost, which is the fixed cost per unit of output, calculated by dividing total fixed costs by the quantity of output produced.

Output Rises

Refers to an increase in the production level of goods and services over a certain period.

Output Rises

An increase in the production of goods and services within an economy.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service relative to its market price.