Which of the following is NOT correct regarding the theories of income distribut
ID: 1208496 • Letter: W
Question
Which of the following is NOT correct regarding the theories of income distribution?
Dealing with how income should be distributed is a positive economic issue.
Dealing with how income ought to be distributed is a normative issue.
The egalitarian principle of income distribution is "to each exactly the same."
The productivity standard for the distribution of income is stated "to each according to what they produce."
private costs are less than social costs.
private costs equal social costs.
an external benefit exists.
private costs are greater than social costs.
The official poverty level is based on
after-tax income, and includes both cash and in-kind government subsidies.
pretax income, and includes cash subsidies but does not include in-kind subsidies such as food stamps.
total net worth.
wages and salaries, plus any unreported amounts of income from the underground economy.
The official poverty rate in the United States includes
over 35 percent of the population.
between 20 to 25 percent of the population.
less than 5 percent of the population.
between 10 and 15 percent of the population.
Dealing with how income should be distributed is a positive economic issue.
Dealing with how income ought to be distributed is a normative issue.
The egalitarian principle of income distribution is "to each exactly the same."
The productivity standard for the distribution of income is stated "to each according to what they produce."
Explanation / Answer
Correct Answer:
Dealing with how income should be distributed is a positive economic issue
Explanation:
Positive economics only answers “what is” problems . It does not say that “what should be”. It is answered by normative economics. In a given scenario also, positive economics explains that, the how income is distributed. But, it will not say that, how it should be distributed.
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