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Economics
Economics Today
Chapter 30
Q.30.2 - Learning Objectives

Chapter 30: Q.30.2 - Learning Objectives (page 668)

Identify the key determinants of income differences across individuals and discuss theories of the desired income distribution.

Short Answer

Expert verified

The key determinants are - Economic development and growth, per capita GDP, international trade,

natural resources.

Step by step solution

01

Given Information

Income isn't similarly dispersed in a country. Some are rich and some are poor. Yet, the issue emerges when the pay distinction between the rich and the unfortunate increments to a bigger degree.

02

Explanation

Economic growth and development- when a nation encounters a high financial development rate, it is a sign of low pay imbalance.

Per capita GDP- In the lengthy run, high GDP per capita is related to low pay imbalance, however, the case is inverse in the short run, where it is associated with higher pay disparity.

Natural Resources- big-league salary imbalance is related to nations that have an enormous measure of regular assets, for example, oil and products. This can be because of the explanation that responsibility for assets is bound to a little gathering.

International trade - It can be seen that high worldwide exchange trade diminishes the issue of inconsistent dissemination of pay, as it is connected with lower levels of pay imbalance.

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Most popular questions from this chapter

Take a look at both Figure 30-8 and Figure 30-9. When health care programs such as Medicare, Medicaid, and the Affordable Care Act's health exchange system were created, Congress based projected costs on quantities of health care consumed at the time the programs were implemented. Was this a reasonable assumption given that the programs all cut out-of-pocket payments for beneficiaries? Explain.

Recognize the role played by third-party payments in rising health care costs and explain the key elements of and economic effects of the U.S. national health insurance program

During the past decade, many members of the baby boom generation have passed through ages ranging from the middle 40s to the late 50s. Do you suppose that the fact that there have been more members of this generation than other generations in the population during this past decade tends to imply that there was higher or lower measured inequality over the period? Why?

Based on your answers to Problems 30-13 and 30-14, when A increased, did the degree of income inequality increase or decrease? Explain why your answer makes sense by referring to the implied change in the shape of the Lorenz curve.

A government agency determines that the entire community discussed in Problem 30-10 qualifies for a special program in which the government will pay for a number of health care services that most residents previously had not consumed. Many residents immediately make appointments with the community physicians' group. Given the information in Problem 30-10, what is the likely effect on the profit-maximizing price and the equilibrium quantity of health care services provided by the physicians' group in this community?

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