| What is Income and Wealth? | -Income is the Amount of Money brought in over a Set Period of Time
-Wealth is the Value of Money of Assets Held - Homes, Cars, Land and Shares |
| How can Inequality be caused by? | -Wage Differentials
-Discrimination
-Regressive Taxes
-Born into a Poor Family [NOT 100%] |
| What is the Idea between Poor Families never being able to Improve? | -Inequality means that there is a Resources Access Imbalance - People will Low Income or Wealth can't Afford Vital Resources, like Education
-This means those People will have the Low Income or Wealth as they are Unable to get a Good Job, from a Lack of Education |
| How can Market Failure lead to Inequality in Wealth and Income? | -Free Market has led to an Unfair Distribution of Income and Wealth - Capitalism [This is because Entrepreneurs can Thrive with little Government Intervention meaning creating Inequality]
-This is a Normative Statement as Ultimately its the Person's Views on if Inequality is just Meant to Happen, of if its Disgusting that it Happens [Value Judgement] |
| How can Inequality lead to Market Failure? | -Resources will be Unable to be Allocated Efficiently as some People, due to Inequality, may be Unable to get Merit Goods that they Need, despite a Clear Demand for Such [Socially Optimal Level would Account this] |
| What can the Government do about Inequality? What Problems arise from the Intervention? | -Government might aim to Tax more the Rich more, and Dish it out to the Poor. How Intense the Distribution is depends on their Value Judgements
-But this may Reduce the Inventive for Firms and Entrepreneurs to Work Hard, meaning Efficiency may Fall |
