MICROECONOMICS
11th Edition
ISBN: 9781266686764
Author: Colander
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 18, Problem 1QAP
(a)
To determine
The transfer cost of upper quintiles.
(b)
To determine
The discretionary income that the top 20 percent should invest to change the situation.
(c)
To determine
The discretionary income that the bottom 20 percent should have to prevent the change.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
please answer the following question:
1. Which of the following is an example of govemment discretionary spendingA) Social Security retirement paymentsB) defense spendingC) net interest paid on government debD) Medicare benefits for the elderly
For the U.S. government, which of the given is NOT an example of discretionary spending?
science spending
O Medicare
O Medicaid
O defense spending
The following questions list 10 cases of two distributions of income, in each of states "A" and "B." (You can think of A
and B as with and without some policy change.) In each case there are three people only (in last three cases four
people), and their incomes are the numbers given. So in the first question, the first person in state A has an income of
$1 (think of this as $1 per hour, or day), while the second person has $2, and the third has $3. In state B the same three
people have incomes of $2, $4 and $6 respectively. There are no other differences between states A and B, and no
other differences between people besides their incomes as indicated.
Your task is simple and it should not take more than a few minutes. Tell me which state (if either) in each question has
higher "inequality." You should assume that everything else is identical between the two states; all that differs is the
incomes of the people. This is entirely your judgment, given how you interpret the concept of…
Chapter 18 Solutions
MICROECONOMICS
Ch. 18.1 - Prob. 1QCh. 18.1 - Prob. 2QCh. 18.1 - Prob. 3QCh. 18.1 - Prob. 4QCh. 18.1 - Prob. 5QCh. 18.1 - Prob. 6QCh. 18.1 - Prob. 7QCh. 18.1 - Prob. 8QCh. 18.1 - Prob. 9QCh. 18.1 - Prob. 10Q
Ch. 18 - Prob. 1QECh. 18 - Prob. 2QECh. 18 - Prob. 3QECh. 18 - Prob. 4QECh. 18 - Prob. 5QECh. 18 - Prob. 6QECh. 18 - Prob. 7QECh. 18 - Prob. 8QECh. 18 - Prob. 9QECh. 18 - Prob. 10QECh. 18 - Prob. 11QECh. 18 - Prob. 12QECh. 18 - Prob. 13QECh. 18 - Prob. 1QAPCh. 18 - Prob. 2QAPCh. 18 - Prob. 3QAPCh. 18 - Prob. 4QAPCh. 18 - Prob. 5QAPCh. 18 - Prob. 1IPCh. 18 - Prob. 2IPCh. 18 - Prob. 3IPCh. 18 - Prob. 4IPCh. 18 - Prob. 5IPCh. 18 - Prob. 6IPCh. 18 - Prob. 7IPCh. 18 - Prob. 8IPCh. 18 - Prob. 9IP
Knowledge Booster
Similar questions
- No written by hand solution Consider an income guarantee program with an income guarantee of $5,000 and a benefit reduction rate of 40%. A person can work up to 2,000 hours per year at $10 per hour. a. Draw the person’s budget constraint with the income guarantee. b. Suppose that the income guarantee rises to $7,500 but with a 60% reduction rate. Draw the new budget constraint c. Which of these two income guarantee programs is more likely to discourage work? Explain.arrow_forwardHow comprehensive income is measured according to Haig Simon's definition?arrow_forwardPlease do fast and add explanation and check answer properly.........arrow_forward
- 1. An economy's Lorenz Curve reveals that an economy's highest income quintile has 65% of the economy's income while the lowest income quintile only has 5% of the economy's income. Solely based on the Lorenz Curve, is this distribution of income fair? Why or why not? 2. To combat income inequality and to generate increased tax revenues to fund expenditures, government officials decide to aggressively increase how progressive income taxes are, so much so that the top income earners are marginally taxed 90% of their income (and while this marginal tax rate may seem oppressive, these top income earners still have more than enough income to satisfy all of their needs and all but the most extravagant of wants - basically, these earners have more than enough money). Argue why this tax policy is a fair approach to fund government expenditures. Why might this tax policy fail to achieve its objectives (tax revenues would actually decline as a result)?arrow_forwardCalculate Social Security taxes, Medicare taxes, and FIT for Jordon Barrett. He earns a monthly salary of $11,900. He is single. Before this payroll, Barrett's cumulative earnings were $142,100. (Social Security maximum is 6.2% on $142,800 and Medicare is 1.45%.) Calculate FIT by the percentage method. (Use Table 9.1) Note: Round your answers to 2 decimal places. FIT Social Security taxes $ 737.80 Medicare taxes $ 172.55arrow_forward1. Describe how each of these changes is likely to affect poverty and inequality: a. Incomes rise for low-income and high-income workers, but rise more for the high-income earners b. Incomes fall for low-income and high-income workers, but fall more for high-income earners. 2. Based on the theory of rational ignorance, what should we expect to happen to voter turnout as the Internet makes information easier to obtain? 3. What is the cost of voting in an election? 4. What is the main factor preventing a large community from influencing policy in the same way as a special interest group? 5. How does the TANF attempt to loosen the poverty trap?arrow_forward
- President Clinton has seized the cigarette excise tax as an expedient and politically correct means of increaseing federal revenue. In 1994 the federal government took in $12 billion from the present 24-cents-per-pack tax. If the tax were quadrupled to $1 a pack, Clinton figures tax revenues would increase by more than $50 billion over three years. Those added revenues would help finance the heath care reforms the president so dearly wants. Professor Gary Becker, a Nobel Prize-winning economist at the University of Chicago,says Clinton math is wrong. The White House assumed that cigarettes sales would drop by 4 percent for every 10 percent increase in prices, not the full adjustment of smokers' behavior. Over a three-year period, cigarette consumption is likely to decline by 8 percent for every 10 percent increase in price-twice as much as Clinton assumed.As a result,the $1-a-pack tax will bring in much less revenue than President Clinton projected. According to Professor Becker, by…arrow_forwardThis chapter discusses the importance of economicmobility.a. What policies might the government pursue toincrease economic mobility within a generation?b. What policies might the government pursue toincrease economic mobility across generations?c. Do you think we should reduce spending oncurrent welfare programs to increase spending onprograms that enhance economic mobility? Whatare some of the advantages and disadvantages ofdoing so?arrow_forwardWhich of the following statements about income inequality is true? a. A low average household income in a society suggests significant income inequality. b. A society with progressive income taxes will likely have a very unequal after-tax distribution of income. c. Low taxes on savings tend to lead to a more equitable distribution of after-tax income. d. Raising taxes on savings and providing subsidies to low-income households will lead to more equal after-tax and transfer incomes. e. Low tax rates on wealth will lead to less unequal income distributions.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax
Economics Today and Tomorrow, Student EditionEconomicsISBN:9780078747663Author:McGraw-HillPublisher:Glencoe/McGraw-Hill School Pub Co
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Microeconomics: Principles & PolicyEconomicsISBN:9781337794992Author:William J. Baumol, Alan S. Blinder, John L. SolowPublisher:Cengage Learning
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Microeconomics: Principles & Policy
Economics
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc