Unit 5 – Market Failure and the Role of Government Income Inequality: The Lorenz Curve, The Gini Coefficient, Taxation.

Slides:

Advertisements

Similar presentations

Chapter 16 Economic Inequality

Advertisements

McGraw-Hill/Irwin Copyright  2006 by The McGraw-Hill Companies, Inc. All rights reserved. Who Gets What? The Distribution of Income Who Gets What? The.

Poverty, Inequality, and Development

Chapter 10. Lorenz Curve and Gini Coefficient Measure distribution of thing your interested in. E.g.   Share of largest firms in an oligopolistic industry,

19. Income Distribution and Poverty Income Inequality in the U.S. Poverty in the U.S. Income Inequality in the U.S. Poverty in the U.S.

Chapter 20 – Income distribution and poverty Income distribution in a market economy Determined by markets.

1 Labor Market Introductory Standard Analysis Introductory Standard Analysis Supply of labor Demand for labor Wages – real and nominal Market clears –

Definitions of Income Income Before Taxes (Money Income): Everything including government cash "transfers" from Social Security or SSI, welfare, unemployment,

18 Income Distribution and Poverty  How much inequality and poverty exist in our society?  What policies are used to fight poverty?  What are the problems.

Table 6.1 Share of Aggregate Income Received by Families by Each Income Quintile, 1929–2001 Income quintile Lowest

Chapter 20 – Income distribution and poverty. Income distribution in a market economy Determined by markets Affected by initial endowments Estate tax.

21 Taxes, Social Insurance, and Income Distribution  Addressing externalities  Providing public goods, maintaining common resources  Taxes, poverty,

Copyright 2008 The McGraw-Hill Companies Income Inequality and Poverty.

Chapter 14 Inequality in Earnings. Copyright © 2003 by Pearson Education, Inc.14-2 Figure 14.1 Earnings Distribution with Perfect Equality.

Chapter 15: Income Distribution

THEORY OF DISTRIBUTION OF INCOMES

Regarding the income distribution in the United States, we have: 0 of Too much inequality 2. Just the right amount of inequality 3. Not enough inequality.

Unit VIII Income Inequality. In this chapter, look for the answers to these questions:  How much inequality and poverty exist in our society?  What.

Types of Taxes personal income tax (all types of income) payroll tax (15.3 % of wage and salary income) corporate income tax (corporate profits) excise.

Chapter 33: Taxes: Equity versus Efficiency Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 13e.

Lecture 2 : Inequality. Today’s Topic’s Schiller’s major points Introduction to Census data.

Growth, Poverty, and Income Distribution Chapter 5.

McGraw-Hill/Irwin Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.

1 Chapter 12 Income Distribution, Poverty, and Discrimination Key Concepts Summary Practice Quiz Internet Exercises ©2000 South-Western College Publishing.

Copyright McGraw-Hill/Irwin, 2005 Facts About Income Inequality The Lorenz Curve Causes of Income Inequality Trends in Income Inequality Equality.

Chapter 17 The Distribution of Income McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

1 Chapter 12 Income Distribution, Poverty, and Discrimination Key Concepts Summary Practice Quiz Internet Exercises ©2002 South-Western College Publishing.

Chapter 20 Income Inequality, Poverty, and Discrimination

1 Chapter 12 Income Distribution, Poverty, and Discrimination Key Concepts Summary Practice Quiz Internet Exercises ©2002 South-Western College Publishing.

Copyright 2008 The McGraw-Hill Companies 20-1 Facts About Income Inequality Causes of Income Inequality Equality Versus Efficiency The Economics of Poverty.

Copyright McGraw-Hill/Irwin, 2002 Facts About Income Inequality The Lorenz Curve Causes of Income Inequality Trends in Income Inequality Equality.

Who Gets What? The Distribution of Income Ch. 11, p Describe the inequality in income and wealth in the U.S. and the world. Explain why wealth.

Chapter 10. Lorenz Curve and Gini Coefficient Measure distribution of thing your interested in. E.g.   Share of largest firms in an oligopolistic industry,

Poverty and the Distribution of Income

Currently, the wealthiest 5 percent of all U. S

ECONOMICS What Does It Mean To Me? Part VII: Issues and Policies in Microeconomics.

1 Chapter 10 Practice Quiz Tutorial Labor Markets and Income Distribution ©2004 South-Western.

Homework #3 Key Problems taken from the Chapter 5 problems.

Chapter 18Copyright ©2009 by South-Western, a division of Cengage Learning. All rights reserved 1 ECON Designed by Amy McGuire, B-books, Ltd. 18 CHAPTER.

Measurement of income distribution. Income distribution Income distribution refers to the way the nation’s “income cake” is divided or shared between.

McGraw-Hill/Irwin Copyright  2008 by The McGraw-Hill Companies, Inc. All rights reserved. Who Gets What? The Distribution of Income Who Gets What? The.

 Goal of Equity in Income distribution: is to have a more equitable (fairer) distribution of income. That means productive income is divided among the.

INCOME REDISTRIBUTION PROBABLY MOST CONTROVERSIAL OF GOVERNMENT FUNCTIONS TRANSFERRING INCOME AND RESOURCES FROM SOME HOUSEHOLDS TO OTHER HOUSEHOLDS INVOLVES.

Chapter 27 Income Inequality and Poverty. Facts Income Inequality Income Inequality million (14.3%) in poverty million (14.3%) in.

Income Inequality, Poverty, and Discrimination Chapter 20 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

Market Failures and the Role of the Government

Market Failures 1. Review 1.Define Market Failure. 2.Identify the three market failures we have learned so far in this unit. 3.Explain why are public.

Market Failures 1. Review 1.Define Market Failure. 2.Identify the four market failures we have learned in this unit. 3.Explain why are public goods a.

Chapter 21 Income Inequality, Poverty, and Discrimination Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution.

 Income: the acquisition of economic resources over time (earned income and unearned income, factor income and transfer payments).  Equality of Income.

AP Economics Mr. Bernstein Module 78: Income Distribution and Income Inequality December 2015.

1 Chapter 12 Tutorial Income Distribution, Poverty, and Discrimination ©2000 South-Western College Publishing.

Chapter 21 Income Inequality, Poverty, and Discrimination Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution.

1 Net Worth over $2.3 billion Copyright ACDC Leadership 2015.

Market Failures 1. Market Failure #4 Unfair Distribution of Wealth 2 Net Worth over $2.3 billion.

Market Failures 1. Review 1.Identify the three of the four market failures we have learned in this unit. 2.Explain why are public goods a market failure.

Measure distribution of thing your interested in. E.g.  Share of largest firms in an oligopolistic industry, e.g share of top eight, sixteen etc  distribution.

McGraw-Hill/Irwin Copyright  2008 by The McGraw-Hill Companies, Inc. All rights reserved. Who Gets What? The Distribution of Income Who Gets What? The.

McGraw-Hill/Irwin Chapter 11: Income Inequality and Poverty Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Taxing Questions!. Questions Taxation 1.) Distinguish between direct and indirect taxes, and provide examples of each. 2.) Define and explain,

21 C H A P T E R INCOME INEQUALITY AND POVERTY.

20a – Income Inequality This web quiz may appear as two pages on tablets and laptops. I recommend that you view it as one page by clicking on the open.

Chapter 5 (pp 99-end) Public Goods and Externalities

32 Income Inequality and Poverty.

Role of Government and Market Failures

Market Failures and the Role of the Government

Chapter 5 (pp 99-end) Public Goods and Externalities

Market Failures and the Role of the Government

Why are some people rich and some people poor?

Chapter 12 Income Distribution, Poverty, and Discrimination

Presentation transcript:

Unit 5 – Market Failure and the Role of Government Income Inequality: The Lorenz Curve, The Gini Coefficient, Taxation

Essential Questions 1.How do we measure income inequality? 2.How do we demonstrate income inequality graphically? 3.Should the government do anything to address income inequality? If so, what?

Percentage of Income Percentage of Families The Lorenz Curve Income Distribution Quintile% of Total Income Lowest 20%4.2 Second 20%9.7 Third 20%15.4 Fourth 20%22.9 Highest 20%

Percentage of Income Percentage of Families The Lorenz Curve Income Distribution Quintile% of Total Income Lowest 20%4.2 Second 20%9.7 Third 20%15.4 Fourth 20%22.9 Highest 20%47.7 Lowest 20%1 Second 20%3 Third 20%5 Fourth 20%11 Highest 20%

Percentage of Income Percentage of Families The Gini Coefficient = Area between the curves ÷ Total Area under diagonal line = Total Equality 1 = Total Inequality

Inequality and Government Redistribution – How can the government decrease inequality? 1.Progressive Income Taxes – Tax rates increase as income rises. Federal income tax works like this. 2.Estate and Gift Taxes – Taxes are taken when money is inherited or given between family members. 3.Government Transfers – Cash transfer payments like Social Security and unemployment payments. Non-cash transfers like Medicaid and food stamps.