AP®︎ Microeconomics: Topic 6.5 Flashcards

Master key terms and definitions for Topic 6.5 of AP Microeconomics – Inequality to help you prep for quizzes and the AP exam.

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Term

Income Inequality

Definition

An uneven distribution of earnings among individuals or households in an economy.

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Income Inequality
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An uneven distribution of earnings among individuals or households in an economy.

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Wealth Inequality
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An uneven distribution of assets such as property, savings, and investments.

POL-5.A
Poverty Rate
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The percentage of people whose income falls below the poverty threshold.

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Lorenz Curve
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A graph showing the cumulative distribution of income or wealth compared with perfect equality.

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Gini Coefficient
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A number from 0 to 1 measuring inequality, with higher values showing greater inequality.

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Value of Marginal Product
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The extra revenue generated by employing one more unit of a factor of production.

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Human Capital
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The education, training, skills, and experience that increase a worker's productivity and earnings.

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Social Capital
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Networks and relationships that provide economic opportunities, information, and support.

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Inheritance
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Wealth or assets passed from one generation to another.

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Discrimination
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Unequal treatment based on group identity that limits wages, hiring, or advancement.

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Access to Financial Markets
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The ability to borrow, save, invest, and build wealth through financial institutions.

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Economic Mobility
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The ability to move up or down the income or wealth distribution over time.

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Bargaining Power
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The ability of workers, firms, or family members to influence wages and income distribution.

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Progressive, Regressive, and Proportional Taxes
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Progressive takes a higher share from higher incomes; regressive from lower incomes; proportional the same share from all.

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Transfer Payments
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Government payments to individuals without receiving current goods or services in return.

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