BuyFind

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
Publisher: Cengage Learning
ISBN: 9781337617383
BuyFind

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
Publisher: Cengage Learning
ISBN: 9781337617383

Solutions

Chapter
Section
Chapter 28, Problem 5QP
Textbook Problem

What role might each of the following play in contributing to income inequality?

  1. a. Risk taking
  2. b. Education
  3. c. Innate abilities and attributes

Expert Solution
To determine

The factors that determine income inequality.

Explanation of Solution

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...

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