Exam 21: Income Inequity and Poverty

Outline the possible work disincentives created by anti-poverty programs. Is there a way to solve this problem without causing other forms of inefficiency to arise? Explain your answer.

According to utilitarians, the government should continue to redistribute income until everyone in society has exactly the same income.

For most government programs that are designed to help the poor:

Using demand-supply analysis, show why some economists argue that an effective minimum wage will result in higher unemployment among those groups of workers affected by the minimum wage.

Using the graph drawn above, what could occur if: i) a government that advocates a flat tax rate to the income distribution. ii) a government advocates a proportional tax where there are more tax brackets.

A libertarian is likely to argue that:

Although economic growth has raised the income of the typical family, the increase in inequality has prevented the poorest families from sharing in this greater economic prosperity.

Opponents of legislation that proposes to limit the time a family can receive welfare benefits are most likely to argue that time limits are undesirable because:

Amy currently earns $80 000 a year, while John earns $30 000 a year. Suppose that both of their incomes are subject to diminishing marginal utility. From a utilitarian perspective taking a dollar from Amy and giving it to John will:

What is meant by a perfectly equal distribution of income? Use a graph to depict such a situation.

The maximin criterion holds that public policies should aim to minimise the well-being of the most-fortunate person in society.