Author Question: Discuss what you believe might be one of the disadvantages of using the Gini coefficient. What ... (Read 66 times)

corkyiscool3328

  • Hero Member
  • *****
  • Posts: 539
Discuss what you believe might be one of the disadvantages of using the Gini coefficient.
 
  What will be an ideal response?

Question 2

The price of gasoline in Europe is about three times that in the United States, mainly because the European gas tax is higher than the U.S. gas tax.
 
  How would an increase in the gas tax in the United States to the European level change carbon emissions? Would this tax increase bring greater efficiency or would it increase deadweight loss?



frankwu0507

  • Sr. Member
  • ****
  • Posts: 322
Answer to Question 1

While the Gini coefficient measures inequality of income, it does not measure inequality of opportunity. For example, some countries may have a social class structure (i.e. a caste system or other social arrangement) that may present barriers to upward mobility; this is not reflected in their Gini coefficients.

Answer to Question 2

Burning gasoline while driving creates carbon emissions. The in-crease in the gas tax increases the cost of driving, which leads to less driv-ing. Consequently raising the gasoline tax leads to less carbon emissions. The case for raising the gasoline tax asserts that the carbon emissions from driving contribute to global warming. These emissions are an external cost, so the marginal social cost of the carbon emissions from driving exceeds the marginal social benefit. The efficient amount of driving automobiles is the amount such that the marginal (social) benefit equals the marginal social cost. Increasing the tax makes the marginal private cost closer to (or, in an ideal world, equal to) the marginal social cost and decreases (potentially eliminates) the deadweight loss.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

The oldest recorded age was 122. Madame Jeanne Calment was born in France in 1875 and died in 1997. She was a vegetarian and loved olive oil, port wine, and chocolate.

Did you know?

More than nineteen million Americans carry the factor V gene that causes blood clots, pulmonary embolism, and heart disease.

Did you know?

Chronic necrotizing aspergillosis has a slowly progressive process that, unlike invasive aspergillosis, does not spread to other organ systems or the blood vessels. It most often affects middle-aged and elderly individuals, spreading to surrounding tissue in the lungs. The disease often does not respond to conventionally successful treatments, and requires individualized therapies in order to keep it from becoming life-threatening.

Did you know?

Coca-Cola originally used coca leaves and caffeine from the African kola nut. It was advertised as a therapeutic agent and "pickerupper." Eventually, its formulation was changed, and the coca leaves were removed because of the effects of regulation on cocaine-related products.

Did you know?

Human stomach acid is strong enough to dissolve small pieces of metal such as razor blades or staples.

For a complete list of videos, visit our video library