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Author Question: Are policies that aim to help the poor identical to policies that achieve income equality? Why or ... (Read 191 times)

RRMR

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Are policies that aim to help the poor identical to policies that achieve income equality? Why or why not?
 
  What will be an ideal response?

Question 2

The consumer is in equilibrium when
 
  A) MRT = MRS.
  B) Px/Py = MUx/MUy
  C) the budget line is tangent to the indifference curve at the bundle chosen.
  D) All of the above.



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ririgirl15

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Answer to Question 1

Policies that aim to help the poor are not synonymous with achieving income equality because a policy could help the poor without making incomes more equal. For example, the middle class could be taxed and redistributed to both the rich and the poor. Under this scenario, the gap between the rich and the poor would not narrow, although the poor would be better off. Conversely, it would be easy to achieve income equality by reducing the income of all members of society to the level of the poorest individual. This would not help the poor, however, although it would achieve perfect income equality.

Answer to Question 2

D





 

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