EC120 Lecture Notes - Lecture 24: Consumption Smoothing, In Kind, Economic Mobility
30
EC120 Full Course Notes
Verified Note
30 documents
Document Summary
Efficiency and equity: market economies maximize efficiency: Society getting the most it can from scarce resources: equity is not necessarily a feature of market economies: Distributing economic prosperity fairly among members of society. Labour markets, efficiency, and equity: competitive labour markets: Employees paid the value of their marginal product: income from labour varies significantly: Discrimination: labour income is the primary income source for most canadians. Income quintiles: common descriptive approach to income inequality is income quintiles: Share of income going to different groups: in canada: Taxes and transfers: governments collect taxes from individuals and firms: Progressive taxes where higher income groups pay higher percentage of income as taxes: governments transfer money to individuals and firms: Progressive transfers are more to poorer quintiles: income distribution slightly more equitable after taxes and transfers: Top 20% receive 44% of income after transfers. Bottom 20% receive 5% of income after transfers.
