Chapter 30: Q.30.3 - Learning Objectives (page 668)
Distinguish among alternative approaches to measuring and addressing poverty.
Some approaches to measuring and addressing poverty are Total poverty gap, headcount index, the average poverty gap, average income shortfall
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Identify whether each of the following proposed poverty measures is an absolute or relative measure of poverty, and discuss whether poverty could ever be eliminated if that measure were utilized.
a. An inflation-adjusted annual income of \(25,000 for an urban family of four
b. Individuals with annual incomes among the lowest 15 percent
c. An inflation-adjusted annual income of \) 10,000 per person
Some economists have argued that if the government wishes to subsidize health care, it should instead provide predetermined amounts of payments (based on the type of health care problems experienced) directly to patients, who then would be free to choose their health care providers. Whether or not you agree, can you give an economic rationale for this approach to governmental health care funding?
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
Suppose that a nation has implemented a system for applying a tax rate of 2 per cent to the incomes earned by the 10 per cent of its residents with the highest incomes. All funds collected are then transferred directly to the 10 per cent of the nation's residents with the lowest incomes. What is the general effect on the shape of a Lorenz curve based on incomes after collection and redistribution of the tax?
Explain why the productivity standard for the distribution of income entails rewarding people based on their contribution to society's total output. Why does the productivity standard typically fail to yield an equal distribution of income?
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