Answer to Question #95317 in Microeconomics for Kierra Jackson

Question #95317
Would increasing the equality of income in the country necessarily increase the total utility of the country? Explain.


(a) consider what different people use their money for: food, medical care on the one hand and luxuries on the other. Which gives more total utility? marginal utility?

(b) Read the posted readings before you answer this discussion question
Expert's answer

Yes; having a higher income means an increase in purchasing power.Equality of income increases the consumption of goods among the amount of utility increases as more of a good is consumed. People can only consume more is there have a higher disposable income. A persons level of total utility corresponds to the level of consumption, the more a person consumes the higher the total utility.

When there is income inequality a larger population is poor and the consumption rate is lower.Therefore equal income level will spark an increase in consumption and hence the total utility will rise.

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