Understanding Economics
|
|
- Paulina Glenn
- 6 years ago
- Views:
Transcription
1 Understanding Economics 4th edition by Mark Lovewell, Khoa Nguyen and Brennan Thompson
2 Understanding Economics 4 th edition by Mark Lovewell, Khoa Nguyen and Brennan Thompson Chapter 7 Economic Welfare and Income Distribution
3 Learning Objectives In this chapter you will: 1. learn about the concepts of consumer surplus and deadweight loss, and come to appreciate how these concepts can further our understanding of the operation of markets 2. examine spillover costs and benefits and the ways that government addresses these issues 3. see how income is distributed among Canadian households, how this distribution is measured, and the factors underlying this distribution 4. consider the causes of poverty and the way poverty is measured 5. evaluate the effectiveness of government intervention to change the distribution of income
4 Marginal and Total Benefit Both consumers and producers gain from market activity. For consumers, these gains can be measured by marginal and total benefit. Marginal benefit is the extra satisfaction, expressed in dollar terms, from consuming a certain unit of a product. Total benefit is the total satisfaction, expressed in dollar terms, from consuming a product.
5 Consumer Surplus (a) umersurplus.swf Consumer surplus shows the extent to which consumers pay a lower price than the highest one they are willing to pay. It is defined as the net benefit, expressed in dollar terms, from buying a product at its market price. It is found, either for an individual or in an entire market, by subtracting total expenditure from total benefit.
6 Price ($ per pizza) Consumer Surplus (b) Figure 7.1, page 172 Price ($ per pizza) Consumer s Demand Schedule for Pizzas Quantity Demanded (D) (pizzas) $ Total Benefit ($) ( ) 36 ( ) The consumer pays $10 for each of the 3 pizzas but gets more marginal benefit from the first 2 pizzas. At 2 pizzas the $12 marginal benefit can be split into the $10 market price and the $2 surplus for that pizza. The consumer s total benefit from eating pizzas is area AB, and the total expenditure is area B. Consumer s Demand Curve for Pizzas Quantity (pizzas per week) The consumer surplus is area A A = $6 B = $30 A+B = Total Benefit B = Total expenditure D
7 Price ($ per pizza) Consumer Surplus (c) Figure 7.2, page 173 Market Demand Schedule for Pizzas Price ($ per pizza) Quantity Demanded (D) (thousands of pizzas) When consumers in the pizza market are charged a price of $10 they consume pizzas Adding up consumers marginal benefits for all these pizzas gives a total benefit in the market equal to area AB The consumers total expenditure on pizzas is area B Total consumer surplus in the market is found by subtracting area B from area AB so it s equal to area A Market Demand Curve for Pizzas A = $400,000 B = $1 million A+B = Total Benefit B = Total Expenditures Quantity (thousands of pizzas per week) D
8 Producer Surplus (a) ducersurplus1.swf Producer surplus shows the extent to which producers receive a price different from the lowest one they are willing to accept. It is defined as the difference between the price received from selling each unit of a product and the marginal cost of producing it.
9 Producer Surplus At a market price of $10 producers in the pizza market supply pizzas Because market price and marginal cost are the same for the pizza there is no producer surplus at this unit For every previous pizza produced, price exceeds marginal cost giving a total producer surplus equal to area C Subtract the area under the supply curve D from the total revenue shown by area CD
10 The Case of Perfect Competition In a perfectly competitive market, the requirement of marginal-cost pricing is met. Based on this requirement, equilibrium will occur where marginal benefit equals marginal cost, and both consumer surplus and producer surplus are maximized.
11 Price ($ per pizza) The Case of Perfect Competition Figure 7.4, page S Consumer Surplus Producer Surplus 4 2 D Quantity (thousands of pizzas per week) If the pizza market is perfectly competitive, then at the equilibrium price of $10 and output of pizzas the requirement of marginal-cost pricing is met while the consumer surplus and producer surplus are both maximized At quantities below pizzas, marginal benefit exceeds marginal cost At quantities above pizzas marginal cost exceeds marginal benefit so that a reduction in quantity will bring about greater economic welfare
12 When a Market Becomes Uncompetitive When a market becomes uncompetitive, for example due to government policy, price rises. The result is that a portion of the consumer surplus becomes producer surplus. Also there is a net reduction in both the consumer surplus and producer surplus due to the reduction in market output. This net reduction is known as the deadweight loss.
13 Price ($ per pizza) When a Market Becomes Uncompetitive Figure 7.5, page S Deadweight Loss 4 2 D Quantity (thousands of pizzas per week) If some pizza-makers are allowed to collude, they might restrict output to pizzas raising market price to $12 Area E represents the transfer of consumer surplus into producer surplus which is gained by the colluding pizza-makers Area FG represents the deadweight loss combining a fall in both consumer surplus and producer surplus as a result of the lower output
14 7.2 Spillover Costs (a) Spillover costs are the negative external effects of producing or consuming a product. veexternality.swf Adding these costs to private costs raises the supply curve. The preferred outcome is at a lower quantity than in a perfectly competitive market. Government intervention (e.g. an excise tax) can produce the preferred outcome.
15 Price ($ per litre) Spillover Costs (b) Figure 7.6, Page 179 Demand and Supply Schedules for Gasoline Price ($ per litre) Quantity Demanded Quantity Supplied (D) (S 0 ) (S 1 ) (millions of litres) Market Demand Curve for Strawberries D S 0 S 1 a b Spillover Costs, Excise Tax $ Without government intervention, equilibrium occurs at point b To account for spillover costs, the government may impose an excise tax of $1/litre The supply curve shifts from So to S1 moving equilibrium to point a Millions of Litres
16 Spillover Benefits (a) Spillover benefits are the positive external effects of producing or consuming a product. rnalities/positiveexternality.swf Adding these benefits to private benefits raises the demand curve. The preferred outcome is at a higher quantity than occurs in a perfectly competitive market. Government intervention (e.g. a consumer subsidy) can produce the preferred outcome. Public good a product whose benefits cannot be restricted to certain individuals (e.g. national defence)
17 Tuition ($ per year) Spillover Benefits (b) Figure 7.7, page 180 Demand and Supply Schedules for an Engineering Education Tuition ($ per year) $ Enrollment Demanded Quantity Supplied (S 0 ) (S 1 ) (S) (thousands of students) Without government intervention in the market for engineering education, equilibrium occurs at point a If spillover benefits are determined to be $2000 per student, government can create a subsidy for students pursuing a career in engineering Demand and Supply Curves for an Engineering Education The demand curve shifts from Do to D1 and the new equilibrium is at point b with $2000 of each student s tuition paid a Thousands of Students b Spillover Benefits, Student Subsidy S D 0 D 1 14
18 Canadian Distribution of Income Canada s distribution of income can be shown using the Lorenz curve. This curve is a graph showing the cumulative distribution of income for households categorized into five groups based on their income levels.
19 Income Distribution in Selected Years Figure 7.8, page 182 Percentage of Total Pre-Tax Income Received by Each Fifth of Households Average Income (2004) Lowest 20% Second 20% Third 20% Fourth 20% Highest 20% $ Average of total
20 The Lorenz Curve (page 183) A graph showing the cumulative distribution of income among a country s households rvelesson5.swf &type=educator afety_mode=true&persist_safety_mode=1&safe=activ e
21 Interpreting the Lorenz Curve In using the Lorenz curve as a distribution measure, it is useful to compare it with curves for two hypothetical economies: For an economy of perfect equality, where all have identical incomes, the Lorenz curve would be a 45-degree line emanating from the origin. For an economy of perfect inequality, where one household receives all of the economy s income, the Lorenz curve would follow the horizontal and vertical axes of the graph.
22 The Gini Coefficient The Gini coefficient provides a single numerical measure of income distribution. It is defined as the area between a Lorenz curve and the 45-degree line of perfect equality, divided by the entire triangular area under the 45-degree line. The coefficient varies from 0 to 1, with 0 representing perfect equality and 1 representing perfect inequality.
23 Wage Determinants (a) There are seven main wage determinants: labour productivity education experience job conditions regional disparities market power discrimination
24 Labour Productivity In any given market, labour productivity determines the wage of that worker. Labour productivity is defined as output per worker in a given time. It is the most important determinant of wages. The output of each worker varies because of such factors as the worker s ability to do the job and the state of technology With more capable workers or a technological innovation, labour productivity rises, pushing up the prevailing wage
25 Distribution of Earnings (2004) Figure 7.10, page 185 Earnings Under $5000 $ $9999 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ and over Percentage of All Earners
26 Education In general, the more education a worker needs to perform a job, the higher the pay usually adds to a worker s pay but has opportunity costs as well serves two main purposes (consumption and investment in human capital) A student will undertake an educational program if its benefits (both monetary and nonmonetary) exceed its opportunity costs.
27 Education and Average Family Income (2004) Figure 7.11, page 185 Education Average Incomes (Managerial) University Degree Post-secondary diploma Some post-secondary High school graduate Some high school 0 to 8 years of school $
28 Experience On-the-job experience increases a worker s productivity, pushing up the wage rate In many industries, workers gain certain privileges the longer they work for a single employer Seniority rights: the workplace privileges provided to workers who have the longest experience with their employer
29 Experience Older workers are often paid higher wages and can apply first for promotions and overtime work, allowing them to earn higher incomes than their younger colleagues The positive effect of workplace experience on earnings is one of the main reasons average incomes rise with age during the first part of a person s working life
30 Age and Average Income (2000) Figure 7.12, page 187
31 Job Conditions Working conditions can make one job less appealing than the other In order to attract workers to lessappealing occupations, employers must offer higher wages
32 Regional Disparities In Canada, workers in the same occupation earn different incomes, depending on the region they live in In a perfectly functioning labour market, workers in a single occupation would move from one part of the country to another until wage disparities in this occupation were eliminated Labour trends tend to be immobile why?
33 Market Power As a rule, earnings in labour markets that are unionized tend to be higher than in nonunionized markets Professional groups (doctors and Lawyers) can play a similar role in providing their members with market power There are two main types of labour unions: Industrial unions include all workers in a certain industry. Craft unions include workers in a particular occupation and restrict who can be members.
34 Job Discrimination Job discrimination relates to hiring, wage, and promotion decisions based on criteria other than a worker s credentials or performance. Job discrimination can be direct, in which case employees are paid different amounts for substantially the same work. Job discrimination can also be indirect, involving a discriminatory division of jobs.
35 Reasons for Income Inequality (Other Incomes) There are three main reasons for income inequality in addition to wage determinants: Risk-taking--entrepreneurs Ability professional athletes Wealth ownership of financial assets such as stocks and bonds or real assets such as land and buildings Wealth is more unequally distributed than income.
36 Distribution of Wealth in Selected Countries Figure 7.13, page 189 Share of Wealth Held by Top Wealth Holders (%) Sweden (1975) Canada (1984) France (1986) US (1986) 10 0 Top 1% Top 5% Top 20%
37 Assignment Page Practice Questions 1 and 2
38 7.4 Poverty 1/09/28/poverty-report.html One of the main reasons behind the economic goal of income equity is the desire to minimize poverty Poverty is a situation in which a person s income is inadequate to provide the necessities of life such as food, clothing and shelter
39 The Poverty Line The poverty line is the income level below which a household is classified as poor. In Canada, the average family spends 44% of its household after-tax income on food, clothing and shelter
40 The Poverty Line Statistics Canada defines as poor any household that spends more than 64% of its after-tax income on food, clothing, and shelter. In dollar terms, the poverty line (also known as the low-income cut-off LICO) depends on the number of household members and the size of the community they live in.
41 The Poverty Line People in rural areas or small towns can generally live more cheaply than those in urban centres
42 The Poverty Line for Various Households (2004) Figure 7.14, page 191 Size of Household Unit Urban Areas (categorized by size) Rural Areas and over to to Less than person 2 persons 3 persons 4 persons 5 persons 6 persons 7 or more persons $ $ $ $ $
43 The Incidence of Poverty Using Stats Canada s LICO poverty line an estimated 3.5 million Canadians lived in poverty in ,000 were children under the age of 18
44 The Incidence of Poverty (b) Figure 7.15, page 192 All persons Gender Males Females Age Under 18 Between 18 and and over Percentage of Households Below the Poverty Line in Persons in economic families Males in economic families Females in economic families Elderly persons in economic families Persons under 18 in female lone-parent families Persons under 18 in two-parent families Unattached individuals Males Females Elderly males Elderly females
45 Gender Household Type and Age Poverty rates are higher among unattached individuals than among those who are part of an economic family Unattached females are more likely to be poor than unattached males Single-parent families are more likely to be poorer than two-parent families
46 Employment While poverty is more common among the unemployed, a notably high proportion of the employed are poor as well For nonelderly unattached individuals classified as poor a large portion are employed for at least part of the year This group is known as the working poor They are often found in primary industries like fishing where wages are low and seasonal employment is common
47 Region Historically poor households tend to be concentrated in certain regions particularly the Atlantic provinces and parts of Quebec Poverty exists throughout Canada e.g. over a third of Canada s poor live in Ontario
48 Debates over the Measurement of Poverty In recent years there has been considerable criticism of the use of Statistics Canada s LICO measure The federal government has recently introduced an alternative measure of poverty known as the Market Basket Measure (MBM) which is based on an absolute definition of those items considered as necessities
49 7.4 Debates over the Measurement of Poverty A household making an income lower than the amount needed to buy these items is then considered poor using the MBM measure International Labour Organization (ILO) stats
50 7.5 The Canadian Welfare Society A welfare society is one in which the government plays a major role in attempting to ensure the economic wellbeing of its citizens. Transfer payments and personal income taxes are the most important elements of Canada s welfare society.
51 Transfer Payments and Income Equity Transfer payments are now usually based on the principle of means testing rather than universality. Universality benefits apply to all individuals no matter what their incomes Advantage: treating everyone in the same way Drawback: expense in order to provide substantial help to those who needed it most a large sum of money was paid to all recipients
52 Transfer Payments and Income Equity Means Testing transfer payments vary according to a recipient s income Advantage: benefits can be directed to those who need them most so poor households receive the highest payments Drawback: governments may use means testing to limit spending by narrowing qualifications
53 Transfer Payments and Income Equity Transfer payments are greatest as a percent of income for the poorest fifth of households, but the second-poorest fifth of households receives the largest share of these payments.
54 Transfer Payments and Income Equity (b) Figure 7.16, page 195 Average Transfer Payments Received (2004) Transfer Payments as a Percent of Total Income (2004) Share Received of Total Transfer Payments (2004) Lowest 20% Second 20% Third 20% Fourth 20% Highest 20% $ % % Average of Total
55 Impact on Income Distribution Government transfer payments to individual households from all three levels of government are an average of between 10 and 20% of households income Payments to unattached individuals represent a larger proportion, as a rule, than for families
56 Principles of Taxation There are two main principles of taxation: benefits received (e.g. gasoline taxes for roadwork) ability to pay (e.g. personal income tax)
57 Benefits Received Suggests that taxes should be geared to the benefits each taxpayer gains from government activity In this case government services are paid for in the same ways that products are bought and sold in the private sector The guiding philosophy behind some taxes e.g. proceeds from gas taxes are often earmarked for road construction and maintenance
58 Ability to Pay The philosophy more closely tied to the goal of income equity According to this principle, taxes should vary in the proportion of a taxpayer s financial resources It is difficult to measure ability to pay
59 Taxes and Income progressive taxes: increase as a proportion of income as income rises Well-off tax payers are taxed more in both $ terms and % terms
60 Proportional Taxes proportional taxes: stay constant as a proportion of income as income rises While taxpayers with different incomes pay proportionately the same tax, the well-off taxpayer pays a higher $ amount E.g. Income $ taxed at 6% pays $600 $ taxed at 6% pays $1 200
61 Regressive Taxes regressive taxes: decrease as a proportion of income as income rises Taxpayers with low incomes pay proportionately more of their incomes for the tax than do well-off taxpayers even though the well-off taxpayer may pay more as a $ amount lpolicy/typesoftaxesinteractive3b.swf
62 Taxes and Income Equity Sales and excise taxes tend to be regressive (unless combined with a system of tax credits) since the poor spend a higher proportion of their incomes on consumption items than do the rich who are most likely to save part of their incomes Property taxes are often regressive, largely because the poor devote a higher proportion of their incomes to housing than the rich do
63 Taxes and Income Equity Corporate income taxes are difficult to classify as either progressive or regressive To the extent that these taxes these taxes reduce the income of shareholders a rich group of Canadian society they are progressive Corporations that have considerable market power may succeed in passing on the burden of tax to consumers in the form of higher prices for their product in this case the corporate tax is regressive
64 Taxes and Income Equity Personal income taxes are progressive, with the proportion of income paid in tax rising significantly with a household s income level Post-tax incomes in Canada are much more equally distributed than they would otherwise be
65 Personal Income Taxes and Income Equity (2004) Figure 7.17, page 197 Average Personal Income Taxes Paid Personal Income Taxes as a Percent of Total Income Share Paid of Total Personal Income Taxes Lowest 20% Second 20% Third 20% Fourth 20% Highest 20% $ % % Average of Total
66 The Doomsday Prophet Thomas Malthus formulated a theory of population based on two principles: food increases in an algebraic progression (1,2,3 ) population increases in a geometric progression (1,2,4 ) He predicted that over time population growth would outstrip growth in the food supply with disastrous effects
67 A Malthusian Time Chart page 203 A Malthusian Time Chart Year Food Population
68 The Role of Labour Unions (a) (Online Learning Center) Unions represent members interests through collective bargaining. Both unions and employers make collective agreements which bind both parties for a given period. When agreement is impossible, mediation or arbitration can be used to bring about a settlement.
69 The Role of Labour Unions (b) (Online Learning Center) If no settlement is reached, union members can work to rule, or stage a strike. Employers may use a lockout to bring about a settlement.
70 Reaping the Rewards (Online Learning Center) David Ricardo developed a theory of rent based on varying grades of land. According to his theory, a rise in the demand for wheat increases wheat prices and increases rent as poorer land is brought into cultivation. He predicted that higher wheat prices would lead to higher money wages and lower profits.
71 Wage ($ per year) Ricardo s Theory of Rent Figure A Land Rents per Hectare (when production costs are $100 per hectare) Land Rents per Hectare Wheat Price ($) Grade A (50 kg output) Grade B (40 kg output) Grade C (20 kg output) Grade D (10 kg output) 400 $400 $ [($5 x 50) $100] not cultivated 300 $ [($5 x 50) - $100] $ $100 $100 $0 $0 0 A B C D Grade of Land
72 Understanding Economics 4 th edition by Mark Lovewell, Khoa Nguyen and Brennan Thompson Chapter 7 The End
Chapter 8 Income Distribution. Part II
Chapter 8 Income Distribution Part II In a nutshell so far.. 1. Factors that determine wages Risk taking Ability Wealth 2. In Canada, poverty is usually defined in relation to the average Canadian income
More informationUnderstanding Income Distribution and Poverty
Understanding Distribution and Poverty : Understanding the Lingo market income: quantifies total before-tax income paid to factor markets from the market (i.e. wages, interest, rent, and profit) total
More informationCIE Economics A-level
CIE Economics A-level Topic 3: Government Microeconomic Intervention b) Equity and policies towards income and wealth redistribution Notes In the absence of government intervention, the market mechanism
More informationAP Microeconomics Chapter 16 Outline
I. Learning objectives In this chapter students should learn: A. The main categories of government spending and the main sources of government revenue. B. The different philosophies regarding the distribution
More informationINTRODUCTION TAXES: EQUITY VS. EFFICIENCY WEALTH PERSONAL INCOME THE LORENZ CURVE THE SIZE DISTRIBUTION OF INCOME
INTRODUCTION Taxes affect production as well as distribution. This creates a potential tradeoff between the goal of equity and the goal of efficiency. The chapter focuses on the following questions: How
More informationIncome Distribution and Poverty
C H A P T E R 15 Income Distribution and Poverty Prepared by: Fernando Quijano and Yvonn Quijano Income Distribution and Poverty This chapter focuses on distribution. Why do some people get more than others?
More informationInequality and Redistribution
Inequality and Redistribution Chapter 19 CHAPTER IN PERSPECTIVE In chapter 19 we conclude our study of income determination by looking at the extent and sources of economic inequality and examining how
More informationTest Yourself: Income, Transfers and Taxes
Test Yourself: Income, Transfers and Taxes I wish it need not have happened in my time," said Frodo. "So do I," said Gandalf, "and so do all who live to see such times. But that is not for them to decide.
More informationReview Questions. The Labor Market: Definitions, Facts, and Trends. Choose the letter that represents the BEST response.
Review Questions Choose the letter that represents the BEST response. The Labor Market: Definitions, Facts, and Trends 1. The labor force consists of a. all individuals aged 16 or older who are employed
More informationCatalogue no XIE. Income in Canada
Catalogue no. 75-202-XIE Income in Canada 2005 How to obtain more information Specific inquiries about this product and related statistics or services should be directed to: Income in Canada, Statistics
More informationPoverty, Inequity and Inequality in New Zealand
Poverty, Inequity and Inequality in New Zealand Inequality and Inequity Equity is fairness or justice with individual circumstances taken into account. It is also a matter of opinion what is equitable
More informationTaxes: Equity vs. Efficiency Part I The only difference between death and taxes is that death doesn't get worse every time Congress meets.
Taxes: Equity vs. Efficiency Part I The only difference between death and taxes is that death doesn't get worse every time Congress meets. Will Rogers What Is Income? There are several ways to measure
More informationPoverty After 50 in Canada: A Recent Snapshot
Poverty After 50 in Canada: A Recent Snapshot Mayssun El-Attar 1 Raquel Fonseca 2 1 McGill University and Industrial Alliance Research Chair on the Economics of Demographic Change 2 ESG-Université du Québec
More informationThe analysis of government intervention (Stiglitz ch.10; Gruber ch.2)
The analysis of government intervention (Stiglitz ch.10; Gruber ch.2) How does the government intervene: some comparative data Effects of government interventions the importance of design features evaluating
More informationEconomic Development. Problem Set 1
Economic Development Problem Set 1 Sherif Khalifa DueTuesday,March,8th,2011 1. (a) What is the usual indicator of living standards? (b) How is it calculated? (c) What are the problems with this indicator?
More informationCASE FAIR OSTER PRINCIPLES OF MICROECONOMICS E L E V E N T H E D I T I O N. PEARSON 2014 Pearson Education, Inc.
PRINCIPLES OF MICROECONOMICS E L E V E N T H E D I T I O N CASE FAIR OSTER PEARSON Prepared by: Fernando Quijano w/shelly 1 of Tefft 11 2 of 30 Public Finance: The Economics of Taxation 19 CHAPTER OUTLINE
More informationChapter 12 TAXES AND TAX POLICY Principles of Economics in Context (Goodwin et al.)
Chapter 12 TAXES AND TAX POLICY Principles of Economics in Context (Goodwin et al.) Chapter Summary This chapter starts out with a theory of taxes using the supply-and-demand model. Referring back to the
More informationQuiz #1 Week 03/01/2009 to 03/07/2009
Quiz #1 Week 03/01/2009 to 03/07/2009 You have 25 minutes to answer the following 14 multiple choice questions. Record your answers in the bubble sheet. Your grade in this quiz will count for 1% of your
More informationFINAL EXAMINATION VERSION B
William M. Boal Signature: Printed name: FINAL EXAMINATION VERSION B INSTRUCTIONS: This exam is closed-book, closed-notes. Simple calculators are permitted, but graphing calculators, calculators with alphabetical
More informationMICROECONOMICS - CLUTCH CH. 6 - INTRODUCTION TO TAXES AND SUBSIDIES
!! www.clutchprep.com CONCEPT: INTRODUCING TAXES AND TAX INCIDENCE Taxes allow the government to provide public services. Taxes can either be imposed on the buyer or the seller of a good. The tax shifts
More informationCHAPTER 17: PUBLIC CHOICE THEORY AND THE ECONOMICS OF TAXATION
CHAPTER 17: PUBLIC CHOICE THEORY AND THE ECONOMICS OF TAXATION Introduction As we have seen, government plays an important role in addressing market failures. But it also plays a significant role in taxation
More informationINCOME INEQUALITY AND OTHER FORMS OF INEQUALITY. Sandip Sarkar & Balwant Singh Mehta. Institute for Human Development New Delhi
INCOME INEQUALITY AND OTHER FORMS OF INEQUALITY Sandip Sarkar & Balwant Singh Mehta Institute for Human Development New Delhi 1 WHAT IS INEQUALITY Inequality is multidimensional, if expressed between individuals,
More informationG.C.E. (A.L.) Support Seminar- 2016
G.C.E. (A.L.) Support Seminar- 2016 Economics I Two hours Instructions : Answer all the questions. In each of the questions 1 to 50, pick one of the alternatives from (1), (2), (3), (4) and (5), which
More informationPublic Finance: The Economics of Taxation. The Economics of Taxation. Taxes: Basic Concepts
C H A P T E R 16 Public Finance: The Economics of Taxation Prepared by: Fernando Quijano and Yvonn Quijano The Economics of Taxation The primary vehicle that the government uses to finance itself is taxation.
More informationBC CAMPAIGN 2000 WHAT IS CHILD POVERTY? FACT SHEET #1 November 24, 2005
WHAT IS CHILD POVERTY? FACT SHEET #1 Poverty in Canada is measured by using Statistics Canada's Low Income Cut-Offs (LICOs). The cut-offs are based on the concept that people in poverty live in "straitened
More informationSTATUS OF WOMEN OFFICE. Socio-Demographic Profiles of Saskatchewan Women. Aboriginal Women
Socio-Demographic Profiles of Saskatchewan Women Aboriginal Women Aboriginal Women This statistical profile describes some of the social and economic characteristics of the growing population of Aboriginal
More informationCatalogue no XIE. Income in Canada. Statistics Canada. Statistique Canada
Catalogue no. 75-202-XIE Income in Canada 2000 Statistics Canada Statistique Canada How to obtain more information Specific inquiries about this product and related statistics or services should be directed
More informationPost-Secondary Education, Training and Labour Prepared November New Brunswick Minimum Wage Report
Post-Secondary Education, Training and Labour Prepared November 2018 2018 New Brunswick Minimum Wage Report Contents Section 1 Minimum Wage Rates in New Brunswick... 2 1.1 Recent History of Minimum Wage
More informationCHAPTER 9 DISTRIBUTION: EXCHANGE AND TRANSFER Microeconomics in Context (Goodwin, et al.), 2 nd Edition
CHAPTER 9 DISTRIBUTION: EXCHANGE AND TRANSFER Microeconomics in Context (Goodwin, et al.), 2 nd Edition Chapter Summary This chapter looks at the two ways in which resources are distributed in an economy:
More informationPoverty, Inequality and the Welfare State
Poverty, Inequality and the Welfare State Lectures 3 and 4 Le Grand, Propper and Smith (2008): Chp 9 Stiglitz (2000): Chp 14 Connolly and Munro (1999): Chp 14, 15, 16, 17 Outline Income and wealth defined
More informationFOCUS CCPA-NOVA SCOTIA. Cost of Poverty in Prince Edward Island 10 YEARS OF RAISING DEBATE AND PROPOSING POLICY ALTERNATIVES.
10 YEARS OF RAISING DEBATE AND PROPOSING POLICY ALTERNATIVES CCPA-NOVA SCOTIA FOCUS Cost of Poverty in Prince Edward Island Angella MacEwen There is obviously a moral imperative to end poverty, first and
More informationChapter 12: Design of the Tax System. Historical Context
Chapter 12: Design of the Tax System Purpose: Address the tax system and how the U.S. government raises and spends money along with the difficulty of making a tax system both efficient and equitable. Quick
More informationASSIGNMENT 1 ST SEMESTER : MACROECONOMICS (MAC) ECONOMICS 1 (ECO101) STUDY UNITS COVERED : STUDY UNITS 1 AND 2. DUE DATE : 3:00 p.m.
Page 1 of 15 ASSIGNMENT 1 ST SEMESTER : MACROECONOMICS (MAC) ECONOMICS 1 (ECO101) STUDY UNITS COVERED : STUDY UNITS 1 AND 2 DUE DATE : 3:00 p.m. 19 MARCH 2013 TOTAL MARKS : 100 INSTRUCTIONS TO CANDIDATES
More informationAssessing the distribution of impacts in global benefit-cost analysis
Assessing the distribution of impacts in global benefit-cost analysis Lisa A. Robinson & James K. Hammitt with supplement by Matthew D. Adler Harvard Center for Risk Analysis Outline BCA Separates analysis
More informationEconomics 448: Lecture 14 Measures of Inequality
Economics 448: Measures of Inequality 6 March 2014 1 2 The context Economic inequality: Preliminary observations 3 Inequality Economic growth affects the level of income, wealth, well being. Also want
More informationIncome Inequality and Poverty (Chapter 20 in Mankiw & Taylor; reading Chapter 19 will also help)
Income Inequality and Poverty (Chapter 20 in Mankiw & Taylor; reading Chapter 19 will also help) Before turning to money and inflation, we backtrack - at least in terms of the textbook - to consider income
More informationCASE FAIR OSTER PRINCIPLES OF MICROECONOMICS E L E V E N T H E D I T I O N. PEARSON 2012 Pearson Education, Inc. Publishing as Prentice Hall
PART III Market Imperfections and the Role of Government PRINCIPLES OF MICROECONOMICS E L E V E N T H E D I T I O N CASE FAIR OSTER PEARSON 2012 Pearson Education, Inc. Publishing as Prentice Hall Prepared
More informationPost-Secondary Education, Training and Labour August New Brunswick Minimum Wage Factsheet 2017
Post-Secondary Education, Training and Labour August 2017 New Brunswick Minimum Wage Factsheet 2017 Contents PART 1 - Minimum Wage Rates in New Brunswick... 3 1.1 Recent History of Minimum Wage in New
More informationEastern Mediterranean University Faculty of Business and Economics Department of Economics Fall Semester. ECON 101 Mid term Exam
Eastern Mediterranean University Faculty of Business and Economics Department of Economics 2014 15 Fall Semester ECON 101 Mid term Exam Suggested Solutions 28 November 2014 Duration: 90 minutes Name Surname:
More informationCatalogue no XIE. Income in Canada. Statistics Canada. Statistique Canada
Catalogue no. 75-202-XIE Income in Canada 1999 Statistics Canada Statistique Canada How to obtain more information Specific inquiries about this product and related statistics or services should be directed
More informationGender and taxation WHO KNEW? CATHERINE NGINA MUTAVA
Gender and taxation WHO KNEW? CATHERINE NGINA MUTAVA Gender and taxation Gender Refers to the result of social relations that ascribe different roles, rights, responsibilities and obligations to males
More informationGenaral Certificate of Education (A/L) Series of Supplementary Seminars Revision Question Paper
Genaral Certificate of Education (A/L) Series of Supplementary Seminars - 2013 Revision Question Paper Economics I Time:- Two hours Preparation by the section of Commerce and Business studies in the Ministry
More informationECON 1100 Global Economics (Fall 2013) The Distribution Function of Government portions for Exam 3
ECON Global Economics (Fall 23) The Distribution Function of Government portions for Exam 3 Relevant Readings from the Required Textbooks: Economics Chapter 2, Income Distribution and Poverty Problems
More informationDEPARTMENT OF ECONOMICS THE UNIVERSITY OF NEW BRUNSWICK FREDERICTON, CANADA
FEDERAL INCOME TAX CUTS AND REGIONAL DISPARITIES by Maxime Fougere & G.C. Ruggeri Working Paper Series 2001-06 DEPARTMENT OF ECONOMICS THE UNIVERSITY OF NEW BRUNSWICK FREDERICTON, CANADA FEDERAL INCOME
More informationRedistributive Effects of Pension Reform in China
COMPONENT ONE Redistributive Effects of Pension Reform in China Li Shi and Zhu Mengbing China Institute for Income Distribution Beijing Normal University NOVEMBER 2017 CONTENTS 1. Introduction 4 2. The
More informationECON 340/ Zenginobuz Fall 2011 STUDY QUESTIONS FOR THE FINAL. x y z w u A u B
ECON 340/ Zenginobuz Fall 2011 STUDY QUESTIONS FOR THE FINAL 1. There are two agents, A and B. Consider the set X of feasible allocations which contains w, x, y, z. The utility that the two agents receive
More informationTHIRD EDITION. ECONOMICS and. MICROECONOMICS Paul Krugman Robin Wells. Chapter 18. The Economics of the Welfare State
THIRD EDITION ECONOMICS and MICROECONOMICS Paul Krugman Robin Wells Chapter 18 The Economics of the Welfare State WHAT YOU WILL LEARN IN THIS CHAPTER What the welfare state is and the rationale for it
More informationCambridge Assessment International Education Cambridge International General Certificate of Secondary Education. Published
Cambridge Assessment International Education Cambridge International General Certificate of Secondary Education ECONOMICS 0455/23 Paper 2 Structured Questions MARK SCHEME Maximum Mark: 90 Published This
More informationTopic 11: Measuring Inequality and Poverty
Topic 11: Measuring Inequality and Poverty Economic well-being (utility) is distributed unequally across the population because income and wealth are distributed unequally. Inequality is measured by the
More informationEdexcel Economics AS-level
Edexcel Economics AS-level Unit 1: Markets in Action Topic 4: Price Determination 4.4 Indirect taxes and subsidies Notes Indirect Taxes Indirect taxes are imposed by the government and they increase production
More informationMYTHS. The Truth about Poverty in Abbotsford
The Truth about Poverty in Abbotsford MYTHS Abbotsford has experienced tremendous growth in recent years. The population expanded by 7.2% between 2001 and 2006, higher than the provincial average. During
More informationExiting Poverty: Does Sex Matter?
Exiting Poverty: Does Sex Matter? LORI CURTIS AND KATE RYBCZYNSKI DEPARTMENT OF ECONOMICS UNIVERSITY OF WATERLOO CRDCN WEBINAR MARCH 8, 2016 Motivation Women face higher risk of long term poverty.(finnie
More informationPRACTICE QUESTIONS CHAPTER 5
CECN 104 PRACTICE QUESTIONS CHAPTER 5 1. Marginal utility is the: A. sensitivity of consumer purchases of a good to changes in the price of that good. B. change in total utility realized by consuming one
More informationPost-Secondary Education, Training and Labour Prepared May New Brunswick Minimum Wage Report
Post-Secondary Education, Training and Labour Prepared May 2018 2018 New Brunswick Minimum Wage Report Contents Section 1 Minimum Wage Rates in New Brunswick... 2 1.1 Recent History of Minimum Wage in
More informationCanada Social Report. Poverty Reduction Strategy Summary, Manitoba
Canada Social Report Poverty Reduction Strategy Summary, Manitoba Updated: This series summarizes the poverty reduction strategies now in place or in development in provinces and territories across Canada.
More information5MARKET FAILURE (3.4) Inequality
MARKET FAILURE (3.4) 69 Inequality 70 MARKET FAILURE (3.4) BEFORE you start this unit (in pencil)... write the key idea of this unit in the centre of the page write what you know about this idea around
More informationSOLUTIONS TO TEXT PROBLEMS:
Chapter 8 /Application: The Costs of Taxation 159 B. Rank these taxes from smallest deadweight loss to largest deadweight loss. Lowest deadweight loss tax on children, very inelastic. Then tax on food.
More informationcontext about this report what is poverty?
Poverty Trends in London September 2015 table of contents 3 3 3 4 5 5 6 8 9 10 11 12 13 14 14 15 15 16 context about this report what is poverty? who is most likely experiencing poverty? how is ontario
More informationAssignment 1: Hand in only Answer. Last Name. First Name. Chapter
Assignment 1: Hand in only Answer Last Name First Name Chapter 3 1 11 21 2 12 22 3 13 23 4 14 24 5 15 25 6 16 7 17 8 18 9 19 10 20 Chapter 4 1 8 15 2 9 16 3 10 17 4 11 18 5 12 19 6 13 7 14 Chapter 3: Page
More informationIncome, pensions, spending and wealth
CHAPTER 18 Income, pensions, spending and wealth After four years of growth, the median after-tax income for Canadian families of two or more people remained virtually stable in 2008 at $63,900. The level
More informationECON 256: Poverty, Growth & Inequality. Jack Rossbach
ECON 256: Poverty, Growth & Inequality Jack Rossbach Measuring Poverty Many different definitions for Poverty Cannot afford 2,000 calories per day Do not have basic needs met: clean water, health care,
More informationECON 1001 B. Come to the PASS workshop with your mock exam complete. During the workshop you can work with other students to review your work.
It is most beneficial to you to write this mock midterm UNDER EXAM CONDITIONS. This means: Complete the midterm in _1.5 hour(s). Work on your own. Keep your notes and textbook closed. Attempt every question.
More informationCambridge International Examinations Cambridge International General Certificate of Secondary Education. Published
Cambridge International Examinations Cambridge International General Certificate of Secondary Education ECONOMICS 0455/23 Paper 2 Structured Questions May/June 2016 MARK SCHEME Maximum Mark: 90 Published
More informationBUDGET Québec and the Fight Against Poverty. Social Solidarity
BUDGET 2012-2013 Québec and the Fight Against Poverty Social Solidarity Paper inside pages 100% This document is printed on completely recycled paper, made in Québec, contaning 100% post-consumer fibre
More informationChanges in Economic Mobility
December 11 Changes in Economic Mobility Lin Xia SM 222 Prof. Shulamit Kahn Xia 2 EXECUTIVE SUMMARY Over years, income inequality has been one of the most continuously controversial topics. Most recent
More informationLecture 10. Welfare State Expenditure ANDREEA STOIAN, PHD DEPARTMENT OF FINANCE AND CEFIMO
Lecture 10 Welfare State Expenditure ANDREEA STOIAN, PHD PROFESSOR OF FINANCE DEPARTMENT OF FINANCE AND CEFIMO BUCHAREST UNIVERSITY OF ECONOMIC STUDIES Social welfare The level of well being of the society
More information2017 Alberta Labour Force Profiles Youth
2017 Alberta Labour Force Profiles Youth Highlights Population Statistics Labour Force Statistics 4 th highest proportion of youth in the working age population 1. 16.3% MB 2. 15.3% ON 2. 15.2% SK 4. 14.9%
More informationSocial Situation Monitor - Glossary
Social Situation Monitor - Glossary Active labour market policies Measures aimed at improving recipients prospects of finding gainful employment or increasing their earnings capacity or, in the case of
More informationLabor Markets, Poverty, and Income Distribution. Chapter 12. McGraw-Hill/Irwin. Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Labor Markets, Poverty, and Income Distribution Chapter 12 McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Learning Objectives 1. Understand the relationship between
More informationGOVERNMENT POLICIES AND POPULARITY: HONG KONG CASH HANDOUT
EMPIRICAL PROJECT 12 GOVERNMENT POLICIES AND POPULARITY: HONG KONG CASH HANDOUT LEARNING OBJECTIVES In this project you will: draw Lorenz curves assess the effect of a policy on income inequality convert
More informationLabor Markets, Poverty, and Income Distribution. Chapter 12. Learning Objectives
Labor Markets, Poverty, and Income Distribution Chapter 12 McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Learning Objectives 1. Understand the relationship between
More informationBC CAMPAIGN FACT SHEETS
2006 FACT SHEETS Fact Sheet #1 - What is Child Poverty? Fact Sheet #2 - BC Had the Worst Record Three Years in a Row Fact Sheet #3 - Child Poverty over the Years Fact Sheet #4 - Child Poverty by Family
More informationTHE IMPACT OF REFORMING ENERGY SUBSIDIES, CASH TRANSFERS, AND TAXES ON INEQUALITY AND POVERTY IN GHANA AND TANZANIA
THE IMPACT OF REFORMING ENERGY SUBSIDIES, CASH TRANSFERS, AND TAXES ON INEQUALITY AND POVERTY IN GHANA AND TANZANIA Stephen D. Younger Working Paper 55 November 2016 (Revised June 2017) 1 The CEQ Working
More informationCHAPTER 2 FOUNDATIONS OF MODERN TRADE THEORY: COMPARATIVE ADVANTAGE
CHAPTER 2 FOUNDATIONS OF MODERN TRADE THEORY: COMPARATIVE ADVANTAGE MULTIPLE CHOICE 1. The mercantilists would have objected to: a. Export promotion policies initiated by the government b. The use of tariffs
More informationUnderstanding Economics
Understanding Economics 4th edition by Mark Lovewell, Khoa Nguyen and Brennan Thompson Understanding Economics 4 th edition by Mark Lovewell, Khoa Nguyen and Brennan Thompson Chapter 8 Measures of Economic
More informationEconomics 2002 HIGHER SCHOOL CERTIFICATE EXAMINATION. Total marks 100. Section I. Pages 2 8
2002 HIGHER SCHOOL CERTIFICATE EXAMINATION Economics Total marks 100 Section I Pages 2 8 General Instructions Reading time 5 minutes Working time 3 hours Write using black or blue pen Board-approved calculators
More informationLabour Market Challenges: Turkey
Labour Market Challenges: Turkey Conference Presentation «Boosting the social dimension in the Western Balkans and Turkey» Hakan Ercan Middle East Technical University, Ankara 31.01.2018 Belgrade 1 Growth
More informationWelfare Rates Need To Be Raised
Welfare Rates Need To Be Raised In 2002 the BC government introduced new welfare policies that have significantly reduced income assistance rates and increased the barriers to getting assistance. These
More informationThe Martikainen Employment Model
The Martikainen Employment Model Full employment in Finland Full employment is possible if, unlike at present, employers can also employ people at significantly lower labour costs. If this were so, the
More informationUnit 1. a PPC after more efficient methods of farming are used. O Cotton
Micro-Macro Mix Multidisciplinary question-answer, integrating micro & macro economics Unit 1 1. nly wheat and cotton are grown in an economy. More efficient farming methods are adopted by all the farmers.
More informationHow does social mobility in the United States compare to that in Britain? Why do you think this is so? References. Multiple Choice
1. Award: 10.00 points How does social mobility in the United States compare to that in Britain? Why do you think this is so? There is less social mobility in the United States than in Great Britain. This
More informationSection A: Multiple Choice Indicate the option that correctly completes the statement. (1 mark each = 6 marks)
CIA4U Economics Factor Markets and Income Distribution Practice Test NOTE: The real test will have more multiple-choice questions, but fewer questions from the remaining sections. Section A: Multiple Choice
More informationCONSUMPTION POVERTY IN THE REPUBLIC OF KOSOVO April 2017
CONSUMPTION POVERTY IN THE REPUBLIC OF KOSOVO 2012-2015 April 2017 The World Bank Europe and Central Asia Region Poverty Reduction and Economic Management Unit www.worldbank.org Kosovo Agency of Statistics
More informationPractice Questions and Answers from Lesson I-8: Taxes. Practice Questions and Answers from Lesson I-8: Taxes
Practice Questions and Answers from Lesson I-8: Taxes The following questions practice these skills: Compute the effects of an excise tax on price, quantity, and tax revenue. Show how the tax burden is
More informationCal Poly Pomona, EC Bruce Brown Midterm II, February 22, 2001 (please clearly print your family name with all capital letters)
Cal Poly Pomona, EC 201 - Bruce Brown NAME Midterm II, February 22, 2001 (please clearly print your family name with all capital letters) - Mark your answers on this exam (only this exam will be returned,
More informationINTRODUCTION THE PUBLIC SECTOR MARKET FAILURE INTRODUCTION MARKET FAILURE MARKET FAILURE
Chapter 4 THE PUBLIC SECTOR INTRODUCTION The market can determine WHAT goods to produce, HOW, and for WHOM. Market outcomes may not necessarily be most desirable by policy makers. Government intervention
More informationFoundations of Economics 5 th Edition, AP Edition 2011
A Correlation of 5 th Edition, AP Edition 2011 Advanced Placement Microeconomics and Macroeconomics Topics AP is a trademark registered and/or owned by the College Board, which was not involved in the
More informationUnemployment. Labour force. Measurement of unemployment
Unemployment Unemployment is calculated by measuring level of unemployment or by taking rate of unemployment. Level of unemployment is calculated by subtracting people who are on job from participating
More informationCIE Economics A-level
CIE Economics A-level Topic 4: The Macroeconomy d) Employment and unemployment Notes Size and components of labour force The working age population is between the ages of 18 and 65 who are actively looking
More informationTHREE WORLDS THEORY G L O B A L S T R A T I F I C A T I O N
THREE WORLDS THEORY G L O B A L S T R A T I F I C A T I O N OUTLINE Wealth and Poverty in Global Perspective Problems in Studying Global Inequality Classification of Economies by Income Measuring Global
More informationLow Income Lines and Financial Security in Retirement
Low Income Lines and Financial Security in Retirement In Support of the New Veterans Charter Review Mary Beth MacLean, Health Economist, Research Directorate Teresa Pound, Senior Policy Advisor, Strategic
More informationLetter STUDENT NUMBER ECONOMICS. Written examination. Thursday 27 October 2016
Victorian Certificate of Education 2016 SUPERVISOR TO ATTACH PROCESSING LABEL HERE Letter STUDENT NUMBER ECONOMICS Written examination Thursday 27 October 2016 Reading time: 2.00 pm to 2.15 pm (15 minutes)
More informationPOVERTY PROFILE UPDATE FOR
POVERTY PROFILE UPDATE FOR 1991 National Council of Welfare Jeanne Mance Building OTTAWA K1A 0K9 613 957-2961 Winter 1993 POVERTY IN CANADA IN 1991 The pages that follow contain selected poverty statistics
More informationAutomated labor market diagnostics for low and middle income countries
Poverty Reduction Group Poverty Reduction and Economic Management (PREM) World Bank ADePT: Labor Version 1.0 Automated labor market diagnostics for low and middle income countries User s Guide: Definitions
More informationUNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS General Certificate of Education Ordinary Level
UNIVERSITY F MRIGE INTERNTINL EXMINTINS General ertificate of Education rdinary Level *9195660245* ENMIS 2281/12 Paper 1 Multiple hoice ctober/november 2013 dditional Materials: RE THESE INSTRUTINS FIRST
More informationPoverty, Inequality, and Development
Poverty, Inequality, and Development Outline: Poverty, Inequality, and Development Measurement of Poverty and Inequality Economic characteristics of poverty groups Why is inequality a problem? Relationship
More informationIntermediate Macroeconomic Theory. Costas Azariadis. Costas Azariadis. Lecture 3: Productivity and Labor
Lecture 3: Productivity and Labor 1. THE ISSUES a)productivity most important determinant of living standards in the long run 2008 U.S. GDP per worker employed (current $) $100,000 per worker per year
More informationFoundations of Economics 5 th Edition, AP*Edition 2011
A Correlation of 5 th Edition, AP*Edition 2011 To the Advanced Placement Topics Microeconomics and Macroeconomics *Advanced Placement, Advanced Placement Program, AP, and Pre-AP are registered trademarks
More informationSTUDENT BUDGET CONSULTATION
STUDENT BUDGET CONSULTATION The Student Budget Consultation is a project of This project is supported by DEBT & DEFICIT Students want to reduce the debt 66% of students agree that reducing the debt should
More informationFinal Term Papers. Fall 2009 ECO401. (Group is not responsible for any solved content) Subscribe to VU SMS Alert Service
Fall 2009 ECO401 (Group is not responsible for any solved content) Subscribe to VU SMS Alert Service To Join Simply send following detail to bilal.zaheem@gmail.com Full Name Master Program (MBA, MIT or
More information