Chapter 30: Q.c - For Critical Thinking (page 684)
Who provides the more than $100 billion that Medicare spends on prescription drugs each year?
Short Answer
The taxpayers provide the money.
Chapter 30: Q.c - For Critical Thinking (page 684)
Who provides the more than $100 billion that Medicare spends on prescription drugs each year?
The taxpayers provide the money.
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Get started for freeThe area labelled A is one-fourth of the area denoted B. What is the value of the Gini coefficient?
Consider the graph nearby, which depicts Lorenz curves for countries X, Y, and Z.
a. Which country has the least income inequality?
b. Which country has the most income inequality?
c. Countries Y and Z are identical in all but one respect: population distribution. The share of the population made up of children below working age is much higher in country Z. Recently, however, birthrates have declined in country Z and risen in country Y. Assuming that the countries remain identical in all other respects, would you expect that in 20 years the Lorenz curves for the two countries will be closer together or farther apart? (Hint: According to the age-earnings cycle, what typically happens to income as an individual begins working and ages?)
What do you think motivates proposals to require sellers of disposable diapers to print messages on diapers encouraging parents to tell stories for or read to their babies or young children?
Why do you suppose that choosing other increments besides \(15,000 or \)30,000 can yield even more distributional variations of households within these seven income groupings?
(Hint: what do you think could happen if one were to broaden the income increments to \(100,000 or narrow them to \)5,000 while holding the number of income groups equal to seven?)
Distinguish among alternative approaches to measuring and addressing poverty.
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