Question
The graph below shows the trade-off between economic output and inequality in an economy.
The graph below shows the trade-off between eoonomic outpet and equalty in an economy The dowward soper ef the curve from pont C onmarcs indicales that: O increasing e qualty has a postive effect on economic D: Eqaalty is moru important than output o Incensing aqualily has a detfmental elect on DOuut is more important than equaity Increasing equaity has a detrimental eftect on What is the socially optimal level of utp? nt possible to tell hom this graph
Explanation / Answer
1) Increasing equality has detrimental effect on output.
2) Socially optimum output level should be between B and C. .