1. Which of the following statements about growth incidence curves is false?

The incomes of the poor are growing faster than the rich when the growth incidence curve is sloping downwards.

It shows the growth rate of per capita income between two points in time for every percentile of the income distribution.

A horizontal growth incidence curve implies that income levels have not changed..

Growth incidence curves that are positively sloped imply that income inequality is rising.

2. Which of the following best describes the Lorenz curve for a country with no income inequality?

A 45-degree line

The Lorenz curve does not exist when all incomes are the same.

A horizontal line

A vertical line

3. The slope of a budget line is given by the ...

Ratio of marginal utilities of the two goods

Ratio of total income and price of the good on x-axis

Ratio of prices

Marginal rate of substitution

4. Which of the following describes the expenditure approach to GDP measurement?

GDP=final consumption + investment + net exports

GDP=wages + salaries + profits

GDP=output - intermediate consumption

GDP=gross investment + gross operating surplus

5. Suppose that a consumer spends his or her income such that Food Expenditure=30+0.5*Income. What is the income elasticity of demand for food as Income increases from $100 to $200?

1.25

0.50

1.00

0.625