Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 15: Q.29 (page 378)

Describe how a push for economic equality might

reduce incentives to work and produce output. Then

describe how a push for economic inequality might not

have such effects.

Short Answer

Expert verified

Forcing economic equality may lead to compromise with economic output.

Step by step solution

01

Step 1. Meaning

Incentives to work

incentives to work in economic senses refers to the motivation to choose work over leisure.

02

Step 2. Explanation

Imposing high taxes on high earning groups can discourage them from working will impact incentives as well & there would be a decline in the output-oriented entrepreneur approach, for experiencing a high level of equality in distribution can lead low level of production.

03

Step 3. Explanation

On another side, allowing economic inequality by letting people earn as much they can lead to a high incentive to work because high earning people attract people to earn more & individuals tends to work more leads to inequality.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

We have discovered that the welfare system discourages recipients from working because the more income they earn, the less welfare benefits they receive. How does the earned income tax credit attempt to loosen the poverty trap?

This problem uses the analogy of a “leaky bucket” to explain one constraint on the redistribution of income.

a. What elements of the U.S. system for redistributing income create the leaks in the bucket? Be specific.

b. Between Republicans and Democrats, who do you think generally believes that the bucket used for redistributing income is leaky? How does that belief affect their views about the amount of income redistribution that the government should undertake?

Jonathon is a single father with one child. He can work as a server for \(6 per hour for up to 1,500 hours per

year. He is eligible for welfare, and so if he does not earn any income, he will receive a total of \)10,000 per year.

He can work and still receive government benefits, but for every \(1 of income, his welfare stipend is \)1 less. Create

a table similar to Table 15.4 that shows Jonathan’s options. Use four columns, the first showing number of hours

to work, the second showing his earnings from work, the third showing the government benefits he will receive,

and the fourth column showing his total income (earnings + government support). Sketch a labor-leisure diagram of

Jonathan’s opportunity set with and without government support.

If a family of three earned $20,000, would they

be able to make ends meet given the official poverty threshold?

What goods and services would you include in an

estimate of the basic necessities for a family of four?
See all solutions

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free