Microeconomics: Principles, Problems, & Policies, 20th Edition

Published by McGraw-Hill Education
ISBN 10: 0077660811
ISBN 13: 978-0-07766-081-9

Chapter 21 - Income Inequality, Poverty, and Discrimination - Review Questions: 3

Answer

a. In absolute dollar amounts, the entire distribution of income has been moving upward. d. The relative distribution of income has become less equal. g. The rich are getting richer faster than the poor are getting richer.

Work Step by Step

a. It can be observed that the earnings of both Monique and James increased in the period given. Thus the entire distribution of income has moved upwards in absolute dollar terms. d. The percentage difference between the incomes of the two members increased from 50% to 66.66%. Hence the relative distribution of income has become less equal g. It is also observed that though the incomes of both the members increased, the richer of both i.e., Monique got richer faster than James. Monique's increase in income is 300% while that of James is 200%.
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