Explanation The factors such as dissimilar abilities and attributes, education, working hours, wage discrimination, risk taking, and luck determine income inequality. Dissimilar abilities and potentials: Each individual has different abilities and potentials in the form of intelligence, appearance, and creativity. Those who have potentials can earn higher income than others. Education: An educated person has comparatively more skills and knowledge than uneducated people. Thus, their productivity increases and earns more income. Working hours: The individual who works more implies less leisure and vice versa. Some people prefer to work more to earn income by sacrificing leisure...

The factors that determine income inequality.

Economics (MindTap Course List)

13th Edition

ISBN: 9781337617383

Author: Roger A. Arnold

Publisher: Cengage Learning

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Question

Chapter 28, Problem 5QP

To determine

The factors that determine income inequality.

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Similar questions

A group of 10 people have the following annual incomes: 55,000,30,000,15,000,20,000,35,000,80,000,40,000,45,000,30,000,50,000. Calculate the share of total income each quintile of this income distribution received. Do the top and bottom quintile s in this distribution have a greater or larger share of total income than the top and bottom quintiles of the U.S. income distribution for 2005?
Describe how each of these changes is likely to affect poverty and inequality: Incomes rise for low-income and high-income workers, but rise more for the high-income earners. Incomes fall for low-income and high-income workers, but fall more for high-income earners.
Describe how a push for economic equality might reduce incentives to work and produce output. Then describe how a push for economic inequality might nut have such effects.
Why is there reluctance on the part of some in the United States to redistribute income so that greater equality can be achieved?

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