Data on the Distribution of Income Among Individuals and Families

question 43

Multiple Choice

Data on the distribution of income among individuals and families in the United States indicate that

• A) the power of labor unions and corporations is the major determinant of income inequality.
• B) the rich stay rich and the poor stay poor from one generation to another.
• C) much of the inequality in annual income emanates from differences in education, age, hours worked, and family size.
• D) the difference in annual income emanating from ownership of capital assets is the major source of economic inequality.

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Definitions:

Slope

The measure of the steepness or/incline of a line, representing the ratio of the vertical change to the horizontal change between two points on the line.

Average Revenue

The revenue generated per unit of output sold, calculated by dividing total revenue by the number of units sold.

Marginal Revenue

The extra revenue generated from the sale of an additional unit of a product or service.

Marginal Cost

Marginal cost is the increase in total cost that arises from producing one additional unit of a good or service.