Explain the relationship between labor earnings and the distribution of income
A person's earnings depend on the supply and demand for that person's labor, which in turn depends on natural ability, human capital, compensating differentials, discrimination, and so on. Because labor earnings make up about three-fourths of the total income in the U.S. economy, the factors that determine wages are also largely responsible for determining how the economy's total income is distributed among the various members of society.
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Monopolistic competition is characterized by excess capacity because
A. firms charge a price that is greater than marginal cost. B. firms produce at an output level less than the least-cost output. C. firms are always profitable in the long run. D. the demand for a product is perfectly elastic in this type of industry.
_____ is the change in total utility that occurs because one more unit of a good is consumed or acquired
a. Total utility b. Marginal utility c. Disutility d. Diminishing marginal utility e. Expected utility
The burden of a luxury tax falls
a. more on the rich than on the middle class. b. more on the poor than on the rich. c. more on the middle class than on the rich. d. equally on the rich, the middle class, and the poor.
What is the difference between a market equilibrium and a competitive market equilibrium?
What will be an ideal response?