adie T.M. Alexander (1898-1989) was the first black woman in the U.S. to receive a PhD in Economics (1921). Alexander wrote and spoke extensively on economic and racial justice. She emphasized that black Americans experienced disproportionate income losses during the Great Depression of the 1930s relative to white Americans and that income inequality may have contributed to the Depression: Our economy went into a downward spiral… because our distribution of income was such that the masses had no income to purchase goods and the investors refused to place their income and capital in industry because there was no one with money to buy the products. (Alexander 1945 as cited in Banks 2008). She also objected to high unemployment: She saw it as leading to heightened discrimination against black workers and argued in favor of “the right of all individuals to earn a decent living” (circa 1930s/40s as cited in Banks 2008). Is Alexander’s position on the ethics of labor market and income inequality best described as deontological, utilitarian, or both? Why? Use a utility possibilities frontier to illustrate 1) how an inequitable distribution of income between workers and investors led to inefficiently low levels of well-being per person for both during the Great Depression and 2) how redistribution would have changed this, according to Alexander. 3. Today, black households have on average only 15% of the wealth of white households. Explain how this gap could be contributing to racial inequality in terms of total income as well.

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Chapter1: Making Economics Decisions

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Sadie T.M. Alexander (1898-1989) was the first black woman in the U.S. to receive a PhD in Economics (1921). Alexander wrote and spoke extensively on economic and racial justice. She emphasized that black Americans experienced disproportionate income losses during the Great Depression of the 1930s relative to white Americans and that income inequality may have contributed to the Depression:

Our economy went into a downward spiral… because our distribution of income was such that the masses had no income to purchase goods and the investors refused to place their income and capital in industry because there was no one with money to buy the products. (Alexander 1945 as cited in Banks 2008).

She also objected to high unemployment: She saw it as leading to heightened discrimination against black workers and argued in favor of “the right of all individuals to earn a decent living” (circa 1930s/40s as cited in Banks 2008).

Is Alexander’s position on the ethics of labor market and income inequality best described as deontological, utilitarian, or both? Why?
Use a utility possibilities frontier to illustrate 1) how an inequitable distribution of income between workers and investors led to inefficiently low levels of well-being per person for both during the Great Depression and 2) how redistribution would have changed this, according to Alexander.

3. Today, black households have on average only 15% of the wealth of white households. Explain how this gap could be contributing to racial inequality in terms of total income as well.

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