A Lorenz Curve Showing the Current Distribution of Pre-Tax Income

question 61

Multiple Choice

A Lorenz curve showing the current distribution of pre-tax income in Canada is not an entirely accurate depiction of Canadian income distribution because

• A)Statistics Canada does not actually collect data on Canadian household income.
• B)Canada's tax-and-transfer system reduces income inequality,which causes the Lorenz curve to be flatter and closer to the diagonal than the pre-tax curve.
• C)the data collected on Canadian income distribution does not allow for an accurate plotting of a Lorenz curve.
• D)a Lorenz curve cannot depict the distribution of income after government transfer payments have been distributed to households.
• E)a Lorenz curve cannot depict the distribution of after-tax income.

Understand the relationship between economies of scale and natural monopolies.

Analyze the significance of patents and government franchises in maintaining monopolies.

Distinguish between the profit-maximizing strategies of monopolies and competitive firms.

Comprehend the concept of economic profit and how it differs for monopolies compared to competitive industries.

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Definitions:

Common Law Marriages

A marriage that is recognized by law based on the couples' actions, such as cohabitation and presenting themselves as married, without a formal ceremony or license.

Family Law

A legal practice area focused on issues involving family relationships, such as divorce, adoption, and child custody.

Legal Obligations

Duties enforced by law that require an individual or entity to act or refrain from acting in a certain manner.

Dissolution

The formal disbanding of a partnership or a corporation.