Chapter 11, Problem 1DQ

To determine

Whether the envy of those who are rich depends on the source of that wealth and the envy felt by others towards each of these people differ?

Explanation of Solution

• Yes, the envy of those who are rich completely depends on the source of that wealth. This is because if the person works hard and becomes rich then his work is acknowledged in the society and people have more respect for him.

• If two people are equally rich but their source of wealth is different, then the person who is wealthy by means of hard work will be appreciated more rather than the person who is wealthy by the means of a lottery.

• Yes, the envy felt by others towards each of these people would differ completely because in one case, the source of money is hard work while in the other case the source is luck. Luck may fail but hard work ultimately pays.

Economics Concept Introduction

Introduction:

Capitalist economy:

According to Karl Marx, the main aim of a capitalist is to earn profit. In such an economy, the rich gets richer and the poor gets poorer. He argues that under such practice labors get exploited a lot which increases the income inequality in the specified era.