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AP Microeconomics 6.5 Inequality Questions

Review Lorenz curves, Gini comparisons, tax burdens, and education access to measure income inequality and evaluate how policy changes the distribution of income.

Syllabus
Effective Fall 2022
Course
AP Microeconomics

Exam points

  • interpret cumulative household and income shares on a Lorenz curve
  • compare Lorenz curves or Gini values to rank distributions by inequality
  • classify progressive and regressive taxes from income, spending and tax-rate data
  • calculate average tax rates and compare them with a marginal rate on additional income
  • use Lorenz curves or quintile tables to evaluate redistribution through taxes and transfers

Covered syllabus points

POL-5.A—Define measures of economic inequality in income and wealthPOL-5.B—Explain sources of income and wealth inequality

Question 1

[Maximum number: 1]

On the Lorenz curve, all of the following are true except

A

line A shows more income inequality than line B.

B

line A shows perfect income equality.

C

line B shows less income inequality than line C.

D

line C shows greater income inequality than line A .

E

on line A, 50\% of families earn 50\% of the total income.

Question 2

[Maximum number: 1]

Which of the following is most likely to cause an increase in income inequality in a country?

A

Increasing access to financial markets for people in low-income groups

B

Providing subsidized job training to people in low-income groups

C

Providing free higher education to people in low-income groups

D

Implementing a progressive income tax structure

E

Implementing a regressive income tax structure

Table for Question 2 — AP Microeconomics
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