Income and Wealth

Question 1

Why are women facing inequality when it comes to wages?

Answer 1

Women can get pregnant, take maternity leave off
Tend to have shorter careers for that reason
Tend to have lower paid jobs eg. cleaning, services (retail)
Sexism/Discrimination

Question 2

How can income inequality be reduced?

Answer 2

Tighter restrictions on taxation/increase tax
Invest in education so more skilled workforce
Increase minimum wage
More benefits

Question 3

Why shouldn’t inequality be removed completely?

Answer 3

No motivation for workers to earn more money if all earning the same
Unfair to more skilled workers

Question 4

What is Income?

Answer 4

A flow of money measured over a period of time

Question 5

What is Wealth?

Answer 5

Stock of assets measured at a point in time

Question 6

What are sources of income for households?

Answer 6

Benefits
Wages
Dividends (from enterprise)
Rent (from land/property)
Interest (from savings)

Question 7

What are Assets a household may own?

Answer 7

Land/property
Cash
Shares
Fixtures and Fittings
Bonds
Electricals
Vehicles?

Question 8

Why might increased household income lead to increased wealth?

Answer 8

Increased Household Income -> Increased Discretionary Income -> High Marginal Propensity to save -> Consumers seek return on spare cash so put into assets

Question 9

What might the oppurtunity cost for household increasing their stock of assets (wealth) be?

Answer 9

Increase stock of assets -> Less income for current spending -> OC = loss of enjoyment from goods/services given up