The Lorenz curve
A) shows what portion of the population are living in poverty and what portion are living in wealth.
B) shows what portion of total money income is accounted for by different proportions of the nation's households.
C) shows what portion of the population is working as professionals, white- and blue-collar, workers and workers at menial tasks.
D) breaks down the income levels of each group in the economy.
Answer: B
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In the above figure, in order for this country to move from production possibilities frontier PPF1 to PPF2, it might
A) increase the skills and productivity of its work force. B) put all unemployed resources to work producing desired output. C) engage in exchange with other nations. D) increase the average level of prices for all goods produced and consumed.
One major assumption of economics is that people
A) act as if they systematically pursue self-interest. B) behave randomly without any predictable pattern. C) are sometimes rational and sometimes irrational. D) always pursue the interests of others.