Chapter 13

• What are the 2 ways of measuring income inequality

  Divide the population into equal sized groups

  Divide the population into different categories of income
• True/False: The greater the inequality, the further the Lorenz curve is from the 45degree line

  True
• What is the gini coefficient if income is perfectly equal?

  zero
• What is the gini coefficient if income if totally unequal?

  1
• What is Kuznet's hypothesis

  As a country develops, inequality rises then drops
• What are some things that influence the recent rise in income inequality?

  Technological advances

  Superstar Dynamic

  Increase in international trade
• What happens if your pre-tax income is less than the mean income?

  Lump sum transfer is greater than the taxes paid
• What happens if your pre-tax income is more than the mean income?

  Lump sum transfer is less than the taxes paid
• What is intergenerational Mobility


  Change in the economic status of families from one generation to the next
• What are some determinants of economic mobility?

  Access to healthcare

  Access to education

  Nature of marriages

  Nature of government

  Racial and ethnic discrimination
• What is an assortative marriage?


  When people marry of their own economic and social class