inequality

Question 1

what is income?

Answer 1

a flow concept

Question 2

what is wealth?

Answer 2

a stock concept

Question 3

define inequality ?

Answer 3

the size of the gap between the rich and poor

Question 4

define progressive tax?

Answer 4

where higher earners pay a higher percentage of income as tax

Question 5

what is an example of a progressive tax?

Answer 5

income tax

Question 6

what is an example of a regressive tax?

Answer 6

VAT / demerit goods- alcohol

Question 7

define allocative efficiency ?

Answer 7

where demand and allocation of resources match consumer preference

Question 8

name 4 sources of inequality

Answer 8

1. education - qualifications
2. geographical location - mobility
3. inheritance
4. access to merit goods - healthcare

Question 9

what does a gini coefficient of 1 represent ?

Answer 9

perfect inequality

Question 10

what number as a gini coefficient represents perfect equality ?

Answer 10

0

Question 11

how do you work out the gini coefficient from the lorenz curve?

Answer 11

A / A+B

Question 12

what does the 45 degree line represent on the lorenz curve diagram ?

Answer 12

perfect equality

Question 13

what are the axis on the lorenz curve ?

Answer 13

x axis - % population

y axis - % income

Question 14

what is the gini index in the US?

Answer 14

over 40%

Question 15

what is the gini index in Sweden ?

Answer 15

25%

Question 16

what was the average income for the richest 5th of households in 2011-2012? and how much greater is it than the poorest 5th?

Answer 16

£78,300

14x greater

Question 17

what has happened to the number of billionaires since 2009?

Answer 17

they have doubled

Question 18

how has the use of food banks risen since 2009?

Answer 18

increased by 3500%

from 26,000 to 1 million

Question 19

what is one solution for a gap in wages ?

Answer 19

Universal Basic Income

national minimum wage

Question 20

evaluation to increasing progressive tax?

Answer 20

tax evasion

Question 21

evaluation to the monetary benefits made by government intervention?

Answer 21

over reliance - poverty trap = where there is a disincentive for people to find work due to a potential loss of benefits

Question 22

what is the current minimum wage ?

Answer 22

25+ = £8.72

Question 23

reasons for gender inequality ?

Answer 23

discrimination
child care costs
trends and role models

Question 24

benefits of UBI ?

Answer 24

• eliminates the stigma around claiming benefits
• provides financial stability in the gig economy
• employment mobility - go into social work
• reduced absolute poverty

Question 25

drawbacks of UBI ?

Answer 25

• can be used to fund de-merit goods
• higher tax to fund UBI
• opportunity cost for the government (government spending)

Question 26

define universal basic income ?

Answer 26

when all adults receive a no strings attached amount of money from the state to cover the basic cost of living regardless of their wealth or income