Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 28, Problem 15CQ
To determine
Check whether the outcome is fair or not.
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Evaluate the impact of age, and geographic location on personal income.
Which factor affects health?
Income
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Medical care
All of the above
23. Arnold, Betty, Christine, Donald, and Elena receive incomes of $0, $400, $200, $100, and $300. Starting with the top 20% of the population, write in the correct income share in percentages. Then in a line below it, write in the income share for the second 20%. In another line write in the income share for the middle 20%, then on another line, the income share for the fourth 20%, and finally the income share for the bottom 20%. Please state your answers in percentages for full credit. You do not have to show your calculation.
population share income share
top 20% ______________
2nd 20% ______________
mid 20% _____________
4th 20% _____________
bottom 20% _____________
24. Based on your answers in question #23, fill in the cumulative income distribution table using percentages. Please start with…
Chapter 28 Solutions
Economics: Private and Public Choice (MindTap Course List)
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- Income inequalities exist in the U.S. What are some policy tools the government could use to try and equalize incomes between wealthier households and poorer households? Describe two policies. Have these policies been successful in the past? Why or why not ?arrow_forwardHow comprehensive income is measured according to Haig Simon's definition?arrow_forwardA group of 10 people have the following annual incomes: $24, 000, $18, 000, $50, 000, $100, 000, $12, 000, $36, 000, $80, 000, $10, 000, $24, 000, $16, 000. Calculate the share of total income that each quintile receives from this income distribution. What percent of the total income is represented by the highest quintile? Round your answer to the nearest tenth. Provide your answer below:arrow_forward
- Before-tax incomes are a better measure of income as compared to after-tax incomes. True or false?arrow_forwardWhen welfare payments like housing credits are completely cut off when the recipient's income goes above a certain threshold, then this could discourage the recipient from finding more work or a better-paying job. True or False True Falsearrow_forwardWhat consumption differences might you expect to observe between families characterized as underprivileged versus those whose income is average for its social class? Do you have a tendency to overestimate the class you are in? If so, why? If not, why?arrow_forward
- Should the government be involved to create more equality in income disparitiesarrow_forward5. As a hypothetical case, suppose the typical individual has a utility function expressed as U = (C – 50)*(L – 10), where C is consumption and L is leisure time. The current wage, w, is $5 and she has a weekly return on assets of V = $100. She only has 60 hours per week to divide between work hours, h, and Leisure. A number of countries and communities are considering implementing a "Guaranteed Basic Income" as policy. A "Guaranteed Basic Income" is a government payment of a fixed a amount of money for each person Suppose the country of interest sets the weekly payment at $100. i) Using the Neo-classical labor supply with reference to specific numerical values discuss the consequences of the above "Guaranteed Basic Income". ii) Using the basic Supply and Demand for labor approach discuss the consequences of the "Guaranteed Basic Income" policy on the overall labor market. iii) Using a feedback approach, from the Neo-classical labor supply to market equilibrium and back to labor…arrow_forwardThe 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…arrow_forward
- International data show a positive correlation between income per person and the health of the population. Explain how higher income might cause better health outcomes. Explain how better health outcomes might cause higher income.arrow_forwardWhich of the following provides the best explanation for how consumer credit can exacerbate inequality? People with lower wealth and incomes must sacrifice more capacity and capital in order to acquire credit. People with lower wealth and incomes purchase less, so since credit allows all people to make purchases sooner, credit provides less benefit to these people. People with lower wealth and incomes may have less access to credit and pay higher interest rates when they are approved. People with lower wealth and incomes are offered credit with less collateral.arrow_forwardA group of 10 people have the following annual incomes: $24,000, $18,000, $50,000, $100,000, $12,000, $36,000, $80,000, $10,000, $24,000, $16,000. Calculate the share of total income that each quintile receives from this income distribution. Do the top and bottom quintiles in this distribution have a greater or larger share of total income than the top and bottom quintiles of the U.S. income distribution?arrow_forward
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