What are the major arguments in the case for income inequality?
What will be an ideal response?
The case for income inequality is based on incentives and economic efficiency. Redistribution of income from the higher-income groups to the lower-income groups reduces the economic incentives of both groups to work, save, or invest. The high-income groups will not reap the full rewards from their efforts and the low-income groups may become less motivated to improve their condition. Thus, the productive output of both groups may be reduced, resulting in less productive activity for the economy and a smaller aggregate income to distribute.
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In March a factory used new technology to produce its output. Then in August a fire destroys half the factory. The new technology shifted the factory's PPF ________ and the fire shifted it ________
A) inward; outward B) outward; inward C) outward; outward D) inward; inward
In the Santa Rita mines in Arizona in 1870, Mexican miners received about $12 per month while "American" miners received $70 . Although the wages of both groups tended to rise over time, the gap persisted until at least 1910 . Mexican and American miners did the same work and were equally productive. Economists call this pay differential: a. prejudicial differentials
b. compensating differentials. c. wage discrimination. d. job entry discrimination.