Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 20.2, Problem 2QQ
To determine
Taxing the high earner for supplementing the low earner.
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a) Why do you think we should use taxation as a redistribution tool in a country?
b) Discuss whether kind payments and cash payments is better regarding indivual’s utility when helping the poor?
What is "Pareto Efficiency"? This is a key concept in welfare economics. Write at least a paragraph
to describe this concept and give some examples.
what would happen if Governments increase the level of welfare payments.
Chapter 20 Solutions
Principles of Economics, 7th Edition (MindTap Course List)
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- Most of the government's mandatory spending is used on which of the following? A) social security B) income security C) medicaid D) veteran's benefitsarrow_forwardthe current social security system will ensure that the young people of today will have social security benefits when they retire? true or falsearrow_forwardIn the government of a country's budget the finance minister proposed to raise the tax on cigarettes. He also proposed to increase income tax on individuals earning more than $100,000 per annum. What possible welfare objective can you think of from these proposals?arrow_forward
- 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.arrow_forward"What should be the ideal Social Security Program for the United States ?"arrow_forwardWhich of the following is true about social insurance programs? a-all of these b-Individuals can select the programs in which they would like to participate. c-Rich people are excluded from social insurance programs d-Enrollment is automatic.arrow_forward
- This question concerns rent subsidies. Suppose that under a rent subsidy the government will pay some specified proportion of the total rental price. Using an indifference map for "housing" (e.g. rooms of standard quality) and "all other commodities" analyze whether this approach to enhancing domestic welfare is more or less effective than granting income tax reductions equal in dollar amount to the amount of the rent subsidy? How do these compare to a lump sum $250 per month subsidy which must be applied toward rent or it is taken away?arrow_forwardwhat do each of the school of economics - classical, neoclasscial, austrian, marxian, keynesian, institutionalism, chicago, behavioural, feminist, buddhist, ecological and evolutionary economics think about income inequality and what there proposed solutions?arrow_forwardDoes a single individual making $500,000 pay the samemarginal tax rate as another making $1 million? Explain.arrow_forward
- Government introduces a new income guarantee program for low-income families. Consider the program with an income guarantee of $5000 and a benefit reduction rate of 25%. A person can work up to 2,000 hours per year at $15 per hour. a. Draw the person's budget constraint without and with the income guarantee. Label as many things as you humanly can. b. Who would be affected by this program and who would not (use yearly income and number of hours worked to describe the affected and unaffected groups)?arrow_forwardIn social welfare programs, there is no way to change either the benefit reduction rate or the benefit guarantee to simultaneously achieve all three goals of encouraging work, redistributing more income and lowering costs. What is this dilemma called?arrow_forward1. A government economist, Mollie Orshanky, first calculated this in 1963 by multiplying the cost of a very minimal diet by 3, as a 1955 government study had determined that the typical American family spent 1/3 of its income on food. Group of answer choices a. episodic poverty b. popularity index c. welfare line d. poverty linearrow_forward
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