AP Microeconomics Practice Quiz: Inequality
Written by AP Content Team, Verified for 2026 AP Exams, Last updated: May 2026
Test your understanding with short quizzes. This quiz has 15 questions to check your progress.
Question 1 of 15
All Questions (15)
A) Production possibilities curve and supply/demand graphs
B) The Lorenz curve and Gini coefficient
C) Marginal product of labor and capital curves
D) Progressive and regressive tax schedules
Correct Answer: B
According to the provided text, 'The Lorenz curve and Gini coefficient are used to represent the degree of inequality in distributions and to compare distributions across different countries, policies, or time periods.'
A) It ensures that all individuals earn the same income, reducing inequality.
B) It creates income differences because the value of marginal product varies among individuals.
C) It only affects wealth inequality, not income inequality.
D) It leads to the government redistributing income equally among all factors.
Correct Answer: B
The text states, 'Each factor of production receives the value of its marginal product, which can contribute to income inequality.' This implies that because marginal products are not equal for everyone (e.g., due to differences in skills or capital), incomes will also be unequal.
A) Regressive tax structure
B) Marginal tax structure
C) Progressive tax structure
D) Social capital tax structure
Correct Answer: C
The text identifies 'progressive and regressive tax structures' as a source of inequality. A progressive tax is one where the tax rate increases as the taxable amount increases, which would likely reduce post-tax income inequality.
A) A worker's hourly wage from a job
B) The bargaining power of a labor union
C) Inheritance of property and financial assets
D) The value of a worker's marginal product
Correct Answer: C
The text lists 'inheritance' as a source of inequality. Inheritance involves the transfer of accumulated assets (wealth) from one generation to the next, making it a primary source of wealth inequality, distinct from income which is a flow of earnings.
A) The country with the 0.6 Gini coefficient has a more equal distribution of income.
B) The country with the 0.6 Gini coefficient has a greater degree of income inequality.
C) The country with the 0.3 Gini coefficient has a higher overall national income.
D) The country with the 0.3 Gini coefficient must have a progressive tax system.
Correct Answer: B
The Gini coefficient is used to represent the degree of inequality. A higher Gini coefficient indicates a greater degree of inequality. Therefore, the country with a coefficient of 0.6 is more unequal than the country with a coefficient of 0.3.
A) Social capital
B) Tax structures
C) Inheritance
D) Human capital
Correct Answer: D
The text lists 'human capital' as a source of income and wealth inequality. Human capital refers to the economic value of a worker's experience and skills, which includes assets like education, training, and intelligence.
A) They are relatively consistent across different countries.
B) They vary greatly across and within groups such as age, gender, and race.
C) They are determined solely by the Gini coefficient.
D) They only differ based on a country's tax structure.
Correct Answer: B
The content explicitly states that 'Income levels and poverty rates vary greatly both across and within groups (e.g., age, gender, race) and countries.'
A) Inheritance
B) Bargaining power
C) Human capital
D) Regressive tax structures
Correct Answer: B
The text lists 'bargaining power within economic and social units (firms, labor unions, and families)' as a source of inequality. A decline in union power would reduce the collective bargaining power of workers, which could increase income inequality.
A) Shifting from a progressive tax system to a regressive tax system.
B) Increasing access to education and job training for low-income individuals.
C) Strengthening laws that prevent discrimination in labor markets.
D) Improving access to financial markets for all citizens.
Correct Answer: A
The text identifies tax structures as a source of inequality. A regressive tax system takes a larger percentage of income from low-income earners than from high-income earners. Shifting to such a system from a progressive one would increase the inequality of after-tax income.
A) The amount of money they have saved in a bank.
B) Their level of education and professional skills.
C) Their social networks and connections that provide access to opportunities.
D) The value of government-provided social services they receive.
Correct Answer: C
The text lists 'social capital' as a source of inequality. In this context, social capital refers to the value of social networks, connections, and relationships that can grant individuals access to jobs, information, and other economic opportunities, thus contributing to inequality.
A) Tools that calculate a country's total economic output.
B) Metrics that show the distribution of income and wealth among a population.
C) Indicators of the average income level in a nation.
D) Rules that determine the structure of a country's tax system.
Correct Answer: B
The first point of the provided content is to 'Define measures of economic inequality in income and wealth.' These measures, such as the Gini coefficient and Lorenz curve, are concerned with how income and wealth are distributed, not the total or average amount.
A) Access to financial markets
B) Effects of discrimination
C) A country's rate of inflation
D) Mobility
Correct Answer: C
The text provides a specific list of sources of inequality: 'tax structures, human capital, social capital, inheritance, effects of discrimination, access to financial markets, mobility, and bargaining power'. The rate of inflation is not on this list.
A) Preventing them from acquiring the human capital needed for high-paying jobs.
B) Restricting their ability to save, invest, and build wealth.
C) Lowering their marginal product of labor in their current jobs.
D) Subjecting them to a more regressive tax structure.
Correct Answer: B
Access to financial markets allows individuals to get loans for businesses, save for the future, and invest to grow their assets. Limited access hinders the ability to build wealth, thus contributing significantly to wealth inequality.
A) Explaining what the curve represents.
B) Comparing the inequality levels of two different Lorenz curves.
C) Drawing the Lorenz curve and calculating the Gini coefficient.
D) Defining the Gini coefficient in relation to the Lorenz curve.
Correct Answer: C
The provided content includes an explicit exclusion: 'Drawing the Lorenz curve and calculating Gini coefficients are beyond the scope of the course and the AP Exam.'
A) Its tax structure is guaranteed to be regressive.
B) Individuals have less opportunity to improve their economic standing relative to where they started.
C) The marginal product of all workers is artificially lowered.
D) It indicates that discrimination is the only source of inequality.
Correct Answer: B
The text lists 'mobility' as a factor related to inequality. Low mobility means that it is difficult for individuals to move up (or down) the income and wealth ladder. This tends to perpetuate existing inequalities across generations.