AP Microeconomics Flashcards: Inequality
Written by AP Content Team, Verified for 2026 AP Exams, Last updated: May 2026
Review key ideas with interactive flashcards. This set includes 11 cards to help you master important concepts.
If an economist wants to compare income inequality between the years 1980 and 2020 for a single country, what two measures could they use?
The economist could use the Lorenz curve to visualize the change in the income distribution and the Gini coefficient to provide a specific statistical comparison between the two time periods.
Card 1 of 11
All Flashcards (11)
If an economist wants to compare income inequality between the years 1980 and 2020 for a single country, what two measures could they use?
The economist could use the Lorenz curve to visualize the change in the income distribution and the Gini coefficient to provide a specific statistical comparison between the two time periods.
Besides human capital, what other forms of capital or access contribute to inequality?
Social capital, access to financial markets, and inheritance are other factors that contribute to income and wealth inequality.
What are the two primary forms of economic inequality measured?
The two primary forms measured are income inequality, which relates to the flow of earnings, and wealth inequality, which relates to the stock of assets owned.
Define human capital as a source of inequality.
Human capital refers to an individual's skills and knowledge; differences in the level and quality of human capital are a significant source of income and wealth inequality.
What is the Gini coefficient?
The Gini coefficient is a statistical measure used to represent the degree of inequality in a distribution, allowing for comparisons across different countries, policies, or time periods.
What is the Lorenz curve used for?
The Lorenz curve is a graphical tool used to represent the degree of inequality in a distribution of income or wealth.
A person from a low-income family struggles to get a loan to start a business, while a person from a wealthy family secures one easily. What source of inequality does this illustrate?
This situation illustrates how differing access to financial markets can be a significant source of income and wealth inequality.
According to the text, how do income levels and poverty rates vary?
Income levels and poverty rates show significant variation both across and within different groups, such as by age, gender, and race, as well as between different countries.
Identify three non-capital sources of wealth and income inequality.
Three sources of inequality are inheritance, the effects of discrimination, and differences in bargaining power within firms, labor unions, and families.
Explain how tax structures can be a source of income inequality.
Progressive tax structures can reduce inequality by taxing higher incomes more, while regressive tax structures can increase it by taking a larger percentage from lower incomes.
How does the marginal product of a factor of production relate to income inequality?
Since each factor of production receives the value of its marginal product, differences in productivity and the market value of that output directly contribute to income inequality.