MICROECONOMICS (LL)W/ACCESS >IC<
20th Edition
ISBN: 9781308103341
Author: McConnell
Publisher: MCG/CREATE
expand_more
expand_more
format_list_bulleted
Question
Chapter 21, Problem 6DQ
To determine
The factors contributed to increase the income inequality.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
A5.
Suppose that the initial rural distribution of income is (1, 2, 3, 4) while the initial urban distribution is (3, 4). The poverty line is 2, so the overall poverty rate (headcount index) is 1/3. Now imagine that all of the rural poor move to urban areas and each of them gains 20% in real income. Verify that the overall poverty rate falls to 1/6, yet the urban poverty rate rises from zero to 1/4.
(Last Word) The combined cost of Social Security and Medicare programs was what percent of U.S. GDP in 2008
(A) 7.6
(B) 12.4
(C) 17.2
(D) 2.9
As one of the largest and fastest-growing industries in 2018, health care provided how many jobs for wage and salary workers? O 18 million 30 million 3 pts O 24 million O 12 million
Chapter 21 Solutions
MICROECONOMICS (LL)W/ACCESS >IC<
Knowledge Booster
Similar questions
- Assume that the productivity of farm labour depends on daily caloric intake, similarly to that depicted in Figure17.4. Using this kind of diagram, compare the efficiency wages that would apply to the following two types of workers: • A landless labourer • A labourer with small plot of land on which he grows staple crops Describe the likely equilibrium unemployment rates and wage rates for landless labourers and small landholders. Judging partially on the basis of this example, what sorts of data and what empirical strategies might you use to see whether nutritional efficiency wages were an important element in the rural labour markets of poor, rural economies?arrow_forwardTable 9P - 2 uses data for the year 2016 , adjusted to be comparable to each other . All population values are in thousands . a . Fill in the bîanks in the table . [LO 9.1 ] b . In part a, you should have found that the unem ployment rates of the three countries differ significantly from one another . Suggest three possible reasons to explain why the countries might have different unemploym country working-age population labor force employed unemployed unemployment rate (%) labor-force participation rate (%) japan 110849 64460 2160 france 31164 3520 56.1 germany 76066 46096 5.7 ent rates .arrow_forwardHow is absolute poverty measured, in comparison to the distribution of national income? Write down a statistic for each measurement. List 3 countries in Latin America with extremely high rates of absolute poverty and 3 countries with very high income inequality. What are 2 factors which may have increased absolute poverty rates throughout the region’s history? Finally, provide 2 factors which have increased income inequality in Latin America throughout its history.arrow_forward
- . Consider two communities. In one community,ten families have incomes of $100,000 each and tenfamilies have incomes of $20,000 each. In the othercommunity, ten families have incomes of $250,000each and ten families have incomes of $25,000 each.a. In which community is the distribution of incomemore unequal? In which community is theproblem of poverty likely to be worse?b. Which distribution of income would Rawls prefer?Explain.c. Which distribution of income do you prefer?Explain.d. Why might someone have the oppositepreference?arrow_forward20.7 Essay: How Economic Inequality Arises 1) What is "human capital" and why is it considered an investment? 2) What is "human capital"? How is it important in the determination of a worker's wage rate? 3) How is human capital acquired? 4) How does the demand for high-skilled workers compare to the demand for low-skilled workers? Why does this difference exist? 5) How does an increase in the cost to acquire a skill affect the vertical distance between the supply curves of high-skilled and low-skilled workers?arrow_forwardAssume that the labor demand equation for a fictional country is L d =30-w where w is the wage per hour worked and L d is the number of workers demanded by firms. Assume also that the labor supply equation for that country is L s =0.5(w) , where L s is the number of people willing to work . [LO 9.2,9.5] a. Find the equilibrium wage and quantity of labor employed b . At the equilibrium wage , how many people are unemployed ? c. How would the number of unemployed change if the supply of workers increased ?arrow_forward
- Explain how a country may experience greater equality in the distribution of income, yet still experience high rates of poverty. Hint: Look at the Clear It Up 'How do governments measure poverty in low-income countries?' and compare to Table 15.5.arrow_forwardSuppose that an additional year of schooling raised wages by 7 percent in 1970, regardless of the worker’s race or ethnicity. Suppose also that the wage differential between the average white and the average Hispanic was 36 percent. Finally, assume education is the only factor that affects productivity, and the average white worker had 12 years of schooling in 1970, while the average Hispanic worker had 9 years. By 1980, the average white worker had 13 years of education, while the average Hispanic worker had 11 years. A year of schooling still increased earnings by 7 percent, regardless of the worker’s ethnic background, and the wage differential between the average white worker and the average Hispanic worker fell to 24 percent. Was there a decrease in wage discrimination during the decade? Was there a decrease in the share of the wage differential between whites and Hispanics that can be attributed to discrimination?arrow_forwardIf the tax code exempts the first $20,000 of income from taxation and then taxes 25 percent of all income above that level, then a person who earns percent and a marginal tax rate of $50,000 has an average tax rate of percent. O 15, 25 O 25, 15 O 25, 30 O 30, 25arrow_forward
- 2) Choose the economic indicators below that do not cause higher income inequality but do correlate with higher income inequality; they may be caused by it. Options indicate how the indicator changes when income inequality increases. - GDP growth rate falls - Economic mobility rises - Educational access falls (not the same thing as "education") - Educational access rises (not the same thing as "education") - Access to health care falls - Rate of homeownership rises - Rate of homeownership falls - Economic mobility falls - Access to health care rises - GDP growth rate rises - All of the above - None of the abovearrow_forwardSuppose that the price elasticity for hip replacement surgeries is 0.2. Further suppose that hip replacement surgeries are originally not covered by health insurance and that at a price of $50,000 each, 10,000 such surgeries are demanded each year. LO24.2 a. Suppose that health insurance begins to cover hip replacement surgeries and that everyone interested in getting a hip replacement has health insurance. If insurance covers 50 percent of the cost of the surgery, by what percentage would you expect the quantity demanded of hip replacements to increase? What if insurance covered 90 percent of the price? If insurance covers 50 percent of the bill, just assume that the price paid by consumers falls 50 percent.) b. Suppose that with insurance companies covering 90 percent of the price, the increase in demand leads to a jump in the price per hip surgery from $50,000 to $100,000. How much will each insured patient now pay for a hip replacement surgery? Compared to the original situation,…arrow_forwardNo written by hand solution Suppose there are two sectors, call them A [agriculture] and M [manufacturing]. People earn say $5 an hour in agriculture and $10 an hour in manufacturing. Suppose we are interested in the share of the bottom 40% and the richest 20%. Let x be the share of people in manufacturing. Derive a formula that gives you the shares of income earned by the lowest 40% of the population and the richest 20% of the population as a function of x. This is a connection between structural transformation and the behavior of inequality.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
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax