Make a case for income inequality
First, by rewarding people for their productivity by paying them wages equal to their MRPs, people will
have the incentive to work and improve their skills. Since MRPs vary, people must receive different wage
rates, and this creates income inequality. Second, because the rich can afford to save a higher percentage of
their income than can the poor, they tend to do the economy's investing, thus generating economic growth
that benefits everyone.
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Relative to the supply curve of high-skilled workers, the supply curve of low-skilled workers is
A) to the right. B) above. C) to the left. D) on top of the high-skilled worker supply curve.
How did laborers benefit from World War I (1914–18)?
(a) Their nominal take-home pay rose more than prices increased. (b) They were placed in military jobs that paid wages higher than private sector jobs. (c) High-paying jobs in the private sector were created to support the war effort. (d) Real GNP and national income fell during and shortly after the war.