Microeconomics: Principles for a Changing World Chapter 15-Chiang This is a 4-pa
ID: 1110631 • Letter: M
Question
Microeconomics: Principles for a Changing World Chapter 15-Chiang This is a 4-part Multiply Choice Question. Please if you do not intend to answer all parts please do not answer it. Thank you.
Part A. Those who favor government intervention to reduce income inequality often see personal wealth as:
the property of the government.
immoral.
unnecessary for personal happiness.
created by a joint effort between the individual and community.
Part B. Which of these is NOT a cause of income inequality?
economic discrimination
number of earners per household
differences in human capital
an increase in the number of manufacturing jobs
Part C. Discrimination can cause a vicious circle because:
once an illegal activity is done, it is easier to keep committing it.
firms then become dependent on underpaid workers.
the lack of high wages reduces the incentives to invest in human capital.
employees learn to discriminate from their bosses.
Part D. During what period did poverty fall the MOST in the United States?
1960–1975
1985–1995
1995–2005
1975–1985
Part A. Those who favor government intervention to reduce income inequality often see personal wealth as:
the property of the government.
immoral.
unnecessary for personal happiness.
created by a joint effort between the individual and community.
Explanation / Answer
aThose who favor government intervention to reduce income inequality often see personal wealth as immoral. This is because accumulation of personal wealth is the main reason for rising inequality.
b) An increase in the number of manufacturing jobs is not a cause of rising inequality. The other options such as economic discrimination, number of earners per household and differences in human capital are the resons for rising inequality.
c) Discrimanation can cause a vicious circle because firm then become dependent on underpaid workers. As due to discrimination firms pay low wages to workers which leads to accumulation of surplus by the firms. In this lure of surplus the vicious circle of discrimination continues.
d) During 1995-2005 povertyfall most in the US.