Lesson 4.2.2

4.2.2 Inequality Quiz: Pearson Edexcel Economics, Unit 4

20 questions

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Lesson 4.2.2, Inequality: 20 multiple choice questions for the Pearson Edexcel Economics (9EC0), Unit 4: Theme 4: A global perspective, written with Revision Ninja.

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The 20 questions

  1. In economics, how is wealth classified in contrast to income?

    • Monthly consumption
    • Flow of earnings
    • Stock of assets
    • Annual tax rate

  2. What does a Lorenz curve illustrate about a country's economy?

    • Income inequality
    • Economic growth
    • Inflation rate
    • Unemployment rate

  3. On a Lorenz curve diagram, what shape represents perfect income equality?

    • Horizontal line
    • Vertical line
    • S-shaped curve
    • 45-degree line

  4. If area A is 0.25 and area B below the Lorenz curve is 0.25, what is the Gini coefficient?

    • 0.5
    • 0.0
    • 1.0
    • 0.25

  5. Which value of the Gini coefficient represents perfect income equality?

    • 1
    • 0
    • 0.5
    • 100

  6. Which factor is a major cause of income inequality within a nation?

    • Equal wage rates
    • Universal pensions
    • Flat rate taxes
    • Education differences

  7. Which factor is a primary cause of average income differences between countries?

    • Identical technology
    • Uniform climate
    • Productivity differences
    • Shared currency

  8. Which factor is a key cause of wealth inequality across generations?

    • Equal savings rates
    • Universal healthcare
    • Asset inheritance
    • Income tax

  9. What shape represents the relationship between economic development and income inequality on a Kuznets curve?

    • U-shape
    • Vertical line
    • Inverted U-shape
    • Straight line

  10. How can technological change increase income inequality in a modern economy?

    • Equal wage growth
    • Higher skilled pay
    • Lower capital return
    • Lower skilled pay

  11. According to Piketty, wealth inequality rises when the return on capital exceeds what variable?

    • Inflation rate
    • Tax rate
    • Economic growth
    • Savings rate

  12. Which factor contributes directly to widening wage inequality within a free market economy?

    • Skill differentials
    • State transfers
    • Progressive taxation
    • Maximum prices

  13. Which type of tax takes a larger percentage of income from higher earners to reduce inequality?

    • Regressive tax
    • Proportional tax
    • Flat tax
    • Progressive tax

  14. What is a main limitation of using a single Gini coefficient figure to measure inequality?

    • Calculates absolute poverty
    • Hides distribution changes
    • Measures wealth only
    • Ignores inflation rates

  15. If a country's Gini coefficient falls from 0.45 to 0.35, what happens to income distribution?

    • Perfectly equal
    • More equal
    • Unchanged
    • Less equal

  16. Why is wealth inequality typically higher than income inequality in modern market economies?

    • Asset accumulation
    • Untaxed income
    • Falling interest rates
    • Equal wage distribution

  17. Which measure compares the income share of the top 10% to the bottom 40%?

    • Gini coefficient
    • Reserve ratio
    • Dependency ratio
    • Palma ratio

  18. What does the 45-degree line represent on a standard Lorenz curve diagram?

    • Average income
    • Poverty line
    • Perfect equality
    • Perfect inequality

  19. If area A is 0.30 and area B is 0.20 on a Lorenz curve, what is the Gini coefficient?

    • 1.5
    • 0.5
    • 0.6
    • 0.3

  20. Why is high inequality not an inevitable result of a capitalist system?

    • Automatic wage equalisation
    • Profit caps
    • Wealth decay
    • Government redistribution

All Pearson Edexcel Economics quizzes