Question

What are some reasons why a certain degree of

inequality of income would be expected in a market

economy?

Short answer

There are certain reasons why a certain degree of

inequality of income would be expected in a market economy like

-change in technology

-value of good and services

-gender gaps and preferences

Step-by-step solution

Step 1. Meaning

Income inequality

Income inequality is difference in distribution of income among individuals within country.

Step 2. Reason

Change in technology

Change in technology affects both either skilled labor and unskilled labor,

when new technologies are introduced to a firm then, skilled labor is considered to be more efficient to deal with new technologies leads to more earnings for skilled labor, and creates inequality in earnings between skilled and unskilled labor.

Step 3. Reason

The value of goods and services

Some certain goods & services are more important and have significant value that automatically gives them the upper hand for high earnings as compared to other goods & services that crates inequality in income.

Step 4. Reason

gender gaps and preferences

There are women doesn't want to marry that gives more working hours as compared to men & sometimes women are paid less in comparison to men with doing equal working hours that creating a certain kind of inequality in income between the genders.