Author Question: The table above shows the distribution of income in Swacko. The government of Swacko imposes a 20 ... (Read 105 times)

wrbasek0 · **on:** Jun 29, 2018

The table above shows the distribution of income in Swacko. The government of Swacko imposes a 20 percent tax on people with the highest 40 percent of income.

The government then distributes 40 percent of the tax collected to the lowest 20 percent and 30 percent to the second 20 percent and the middle 20 percent. After the redistribution, the Lorenz curve for income ________. A) is equal to the line of equality
B) equals the Lorenz curve for wealth
C) is closer to the line of equality
D) is above the line of equality

Question 2

Linda Evangelista, a supermodel, once said that she won't get out of bed for less than 10,000 a day. This fee is an example of

A) a reservation wage.
B) the demand for Linda's labor.
C) a competitive labor market.
D) the substitution effect.