This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: How do income and wealth change over a person's lifetime? How does this affect the distribution of ... (Read 36 times)

jeatrice

  • Hero Member
  • *****
  • Posts: 543
on: Jun 29, 2018
How do income and wealth change over a person's lifetime? How does this affect the distribution of income at a point in time?
 
  What will be an ideal response?

Question 2

What is the meaning of the term marginal rate of substitution?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Koolkid240

  • Sr. Member
  • ****
  • Posts: 357
Reply #1 on: Jun 29, 2018
Answer to Question 1

On the average, incomes start out low, increase as the household's workers gain experience and other human capital, peak when the household's workers reach retirement age, and then fall after retirement. On the average, wealth also starts out low, increases as income increases and workers save for retirement, peaks at the point of retirement, then falls after retirement. Because there are always people at all stages of life, the distribution of income at a point in time overstates the actual inequality. The discrepancy would be greater for countries with large percentages of young and retired workers.

Answer to Question 2

The marginal rate of substitution between two goods is the rate at which a consumer is willing to give up some of one in exchange for more of the other, and remain indifferent between the old and the new combination. It is also the slope of an indifference curve between the two goods.


jeatrice

  • Member
  • Posts: 543
Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)

coreycathey

  • Member
  • Posts: 333
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

The first monoclonal antibodies were made exclusively from mouse cells. Some are now fully human, which means they are likely to be safer and may be more effective than older monoclonal antibodies.

Did you know?

Drug abusers experience the following scenario: The pleasure given by their drug (or drugs) of choice is so strong that it is difficult to eradicate even after years of staying away from the substances involved. Certain triggers may cause a drug abuser to relapse. Research shows that long-term drug abuse results in significant changes in brain function that persist long after an individual stops using drugs. It is most important to realize that the same is true of not just illegal substances but alcohol and tobacco as well.

Did you know?

Calcitonin is a naturally occurring hormone. In women who are at least 5 years beyond menopause, it slows bone loss and increases spinal bone density.

Did you know?

Warfarin was developed as a consequence of the study of a strange bleeding disorder that suddenly occurred in cattle on the northern prairies of the United States in the early 1900s.

Did you know?

About 100 new prescription or over-the-counter drugs come into the U.S. market every year.

Mediterranean woodland and shrubland distribution and climate. Mediterranean woodland and shrubland distribution and climate.
A person with a defective "P" gene might only have it effect the Hair A person with a defective "P" gene might only have it effect the Hair
Family interactions change in response to the developing child, and parenting characteristics, such ... Family interactions change in response to the developing child, and parenting characteristics, such ...
Climate Change: Volcanoes Climate Change: Volcanoes
Household Income in the United States by Quintiles, 2009 Household Income in the United States by Quintiles, 2009
Climate change Climate change
Video: Oxygen transport - methods and oxyhemoglobin

For a complete list of videos, visit our video library