Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
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Question
Chapter 18, Problem 8IP
(a)
To determine
Reason for considering income distribution as a public good.
(b)
To determine
Reason for considering income distribution as a public bad.
(c)
To determine
Impact of increasing wage rate.
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Students have asked these similar questions
Inequality, Social Insurance, and Redistribution — End
of Chapter Problem
Assume there are two individuals in the economy, Ahmed
and Bob. The graph depicts the well-being curve, which plots
the average level of satisfaction, for both at each level of
income. Point A represents Ahmed's annual income and level
of satisfaction and point B represents Bob's.
a. What is the total level of satisfaction in this economy?
b. On the graph, move points A and B to show a
redistribution of $40,000 from Ahmed to Bob.
c. After the redistribution in part b, what is the total level
of satisfaction in this economy?
d. Which of the following are drawbacks to
redistribution of income? Select all that apply.
Income redistribution reduces the incentive to work.
The administrative costs will reduce the amount of
money to be redistributed.
Income redistribution leads to more tax avoidance.
Satisfaction
10
9
to
8
7
6
3
2
1
0
0
B
40,000
80,000
Annual Income
120,000
160,000
A
200,000
Which of the following statements is not correct?
Select one:
a.
The economic life cycle theory explains why gifts of goods and services reduce poverty for the very young and the very old.
b.
Because people can borrow and save to smooth out changes in income, their standard of living in any one year depends more on lifetime income than on a particular year's income.
c.
The percentage of the population that suffers from long-term poverty is far smaller than the percentage of the population that suffers from short-term poverty because there is a high level of economic mobility in the United States.
d.
Permanent income is a better measure of a family's ability to buy the necessities of life than is transitory income.
Suppose the teacher for your course, "Principles of Economics" is a libertarian and adheres strictly by its
principles in running your economics class. What policies would you expect your teacher to institute?
Policies a Libertarian Would Enforce
Policies a Libertarian Would Not Enforce
The teacher, seeing grade inequality,
decides to give points from the best student's
test to the worst's students test.
The teacher decides
to give everyone in the class
an A.
The teacher punishing
a student for cheating on
her income equality and
poverty homework assignment.
Grade the class on a curve
to ensure even grade distribution.
When proctoring a test, your teacher requires all
students to be given the test face down
and all turn over your tests at the same time so
that no one has a time advantage.
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
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