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Complete Principles of Economics I/Microeconomics Notes Part 13 - Got 93% in the course!

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Department
Economics
Course
ECON 1131
Professor
All Professors
Semester
Fall

Description
Microeconomics Notes: Chapter 20 Keely Henesey Facts About Income Inequality: −  Monopolistic Competition :  Causes of Income Inequality: − Market System  ▯permissive of high degrees of income inequality because it rewards  individuals based on the contributions they make, or resources they own, in producing  society’s output − Ability  ▯differing mental, physical, and aesthetic talents − Education/Training  ▯differ in develop­/refinement of capabilities thru. education o Differences may be a matter of choice or involuntary (can’t afford education) o On­the­Job Training  ▯without this, income won’t increase over time  Often workers with more advanced education are selected for jobs with  more training [magnifies education­based income differences] − Discrimination  ▯can cause income inequality, but isn’t seen as a dominant factor because  income distributions within minority groups are similar to those of whites o By containing certain groups to low­pay occupation, labor supply increases  relative to demand, and wages/income will decrease o CONVERSELY… labor supply is artificially reduced in higher­pay occupations  populated by “preferred” workers, raising their wages/income − Preferences & Risks  ▯differences in preferences for market work vs. leisure, market work   vs. household work, types of occupation, and willingness to assume risk − Unequal Distribution of Wealth  ▯U
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