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© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
The Utility Possibilities Frontier
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
Wages and Salaries
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
Wages and Salaries
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
Income from Property
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
Income from Government
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
The Distribution of Income
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
Income Inequality in the United States
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
Money Income
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
Changes in the Distribution of Income
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
The Lorenz Curve
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
The Lorenz Curve
• If income is equally
distributed, there is no
shaded area.
• More unequal
distributions of income
produce Lorenz Curves
that are farther from the
45-degree line.
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
The Gini Coefficient
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
Differences Between African-American
Households, White Households, and Single-
Person Households
Distribution of Money Income of Households, 1997 (Percentages)
AFRICAN-
ALL AMERICAN WHITE HISPANIC ONE-PERSON
HOUSEHOLDS HOUSEHOLDS HOUSEHOLDS HOUSEHOLDS HOUSEHOLDS
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
Poverty
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
Poverty in the United States
Since 1960
Percentage of Persons in Poverty by Demographic Group, 1964 - 1997
OFFICIAL OFFICIAL ADJUSTED FOR
MEASURE MEASURE IN-KIND TRANSFERS
1964 1964 AT MARKET VALUE, 1997a
All 19.0 13.3 10.0
White 14.9 11.0 8.4
African-American 49.6 26.5 19.3
Hispanic NA 27.1 19.6
Female householder –
no husband present 45.9 35.1 NA
Elderly (65+) 28.5 10.5 NA
Children under 18 20.7 19.9 NA
Includes food, housing, and medical benefits.
a
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
The Distribution of Wealth
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
The Distribution of Wealth
Source: James Poterba, “Stock Market Wealth and Consumption,” Journal of Economic Perspectives, 14(2), 99 – 118 , Spring 2000.
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
The Redistribution Debate
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
The Redistribution Debate
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
The Redistribution Debate
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
The Redistribution Debate
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
The Redistribution Debate
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
The Works of Karl Marx
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
The Works of Karl Marx
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
Redistribution Programs and Policies
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
Expenditure Programs
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
Expenditure Programs
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
Expenditure Programs
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair
Expenditure Programs
© 2002 Prentice Hall Business Publishing Principles of Economics, 6/e Karl Case, Ray Fair