Inequalities in the Distribution of Income and Wealth

beth2384
Mind Map by , created almost 6 years ago

A Levels Economics (Unit 1, 4 Market Failure) Mind Map on Inequalities in the Distribution of Income and Wealth, created by beth2384 on 01/03/2014.

66
1
0
Tags
beth2384
Created by beth2384 almost 6 years ago
IB Economics SL: Microeconomics
Han Zhang
HSC Economics
lydia le
IB Economics SL: Macroeconomics
Han Zhang
Forces and Acceleration
Adam Collinge
The Strange Case of Dr. Jekyll and Mr. Hyde
K d
Economics - unit 1
Amardeep Kumar
Using GoConqr to study Economics
Sarah Egan
Economics
Emily Fenton
AN ECONOMIC OVERVIEW OF IRELAND AND THE WORLD 2015/16
John O'Driscoll
AS Economics Key Terms
Fred Clayton
Inequalities in the Distribution of Income and Wealth
1 INCOME= a flow of earnings to a factor of production over a period of time, e.g. wages (hourly/weekly) or salaries (monthly/yearly)
1.1 Someone with a particular sporting talent, e.g. a racing cyclist, could command a high income
2 WEALTH= a stock of owned assets, e.g. housing property or a portfolio of shares
2.1 The main source of wealth in the UK is still through inheritance
3 In a free market economy, an individual's ability to consume goods and services depends on INCOME and WEALTH
3.1 An unequal distribution of income and wealth may result in an unsatisfactory allocation of resources, this may be judged as unfair or inequitable
3.1.1 The relatively poor don't have access to the range of goods and services consumed by 'average' citizens
3.1.1.1 High inequality may also lead to alienation and encourage crime with wider negative consequences for society
3.1.1.1.1 A lack of fairness or equity in the distribution of income and wealth can be seen as a failure in the free market
3.1.1.1.1.1 The government aims to close the gap between rich and poor and make things more equal
4 When discussing inequality and poverty we can't escape making value judgements and normative statements
4.1 What constitutes 'unacceptable' distribution of income and what the governement should do about this is a political issue; people will have varying views
4.1.1 There is evidence however that high and rising levels of inequality of income and wealth can lead to negative social consequences i.e. external costs that affect the whole of society

Media attachments