Why should we be concerned with inequality among those above the poverty line?
What will be an ideal response?
Answer:
1. economic inefficiency - the higher the inequality, the smaller the fraction of the population that qualifies for a loan or other credit - lack of collateral
2. extreme income disparities undermine social stability and solidarity - gives the rich more power; focus on redistributing the economic pie rather than enlarging it
3. unfair, 'veil of ignorance'
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Which of the following indicates the number of workers who are willing to work but are unemployed at the optimal union wage rate in Figure 31.1?
A. 22. B. Zero. C. 14. D. 6.
In the United States, the payroll tax is also called a
a. dividend income tax. b. social insurance tax. c. value added tax. d. capital gains tax.
A monopolistically competitive industry is like a purely competitive industry in that:
A. nonprice competition is a feature in both industries. B. firms in both industries face a horizontal demand curve. C. each industry produces a standardized product. D. neither industry has significant barriers to entry.
Macroeconomics differs from microeconomics in that:
A. macroeconomics is the study of individual markets, while microeconomics deals with the nation's economy as a whole. B. microeconomics is the study of individual markets, while macroeconomics deals with the nation's economy as a whole. C. macroeconomics focuses principally on social and political issues, while microeconomics involves the study of a nation's monetary system. D. microeconomics focuses principally on social and political issues, while macroeconomics involves the study of a nation's monetary system.