Assume a society consists of two economic groups: one group is rich and the other group is poor. Suppose that 50 percent of the population is rich while the other 50 percent of the population is poor. Consider two scenarios. Scenario A: The rich have $80,000 each, while the poor have $5,000 each. Scenario B: The rich have $11,000 each, while the poor have $900 each. If you only care about average income and not about equity, you would prefer ▼ Scenario A Scenario B , which has an average income of $........?? (Enter your response to the nearest dollar.) Now suppose that you only care about equity or inequality. In this case, you would prefer ▼ Scenario B Scenario A , which has a rich-to-poor ratio of .........?? (Round your response to one decimal place.) Finally, suppose you only care about living standards. In this case, you would prefer ▼ Scenario A Scenario B because it has lower poverty.
Assume a society consists of two economic groups: one group is rich and the other group is poor. Suppose that 50 percent of the population is rich while the other 50 percent of the population is poor. Consider two scenarios. Scenario A: The rich have $80,000 each, while the poor have $5,000 each. Scenario B: The rich have $11,000 each, while the poor have $900 each. If you only care about average income and not about equity, you would prefer ▼ Scenario A Scenario B , which has an average income of $........?? (Enter your response to the nearest dollar.) Now suppose that you only care about equity or inequality. In this case, you would prefer ▼ Scenario B Scenario A , which has a rich-to-poor ratio of .........?? (Round your response to one decimal place.) Finally, suppose you only care about living standards. In this case, you would prefer ▼ Scenario A Scenario B because it has lower poverty.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Assume a society consists of two economic groups: one group is rich and the other group is poor. Suppose that
50
percent of the population is rich while the other
50
percent of the population is poor. Consider two scenarios.Scenario A: The rich have
$80,000
each, while the poor have
$5,000
each.Scenario B: The rich have
$11,000
each, while the poor have
$900
each.If you only care about average income and not about equity, you would prefer
,
which has an average income of
▼
Scenario A
Scenario B
$........??
(Enter
your response to the nearest
dollar.)
Now suppose that you only care about equity or inequality.
In this case, you would prefer
,
which has a rich-to-poor ratio of
▼
Scenario B
Scenario A
.........??
(Round
your response to one decimal
place.)
Finally, suppose you only care about living standards.
In this case, you would prefer
because it has lower poverty.
▼
Scenario A
Scenario B
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