The Costs and Benefits of Inequality (HSC SSCE Economics): Flashcards

Economic benefits but social costs

Marginal productivity (value person adds)

Incentive effects

High earners save larger; low earners save smaller proportion

Each extra unit gives less satisfaction

Buying expensive goods to display wealth, not utility

Significantly less income than society's average

Social class divisions, poverty, lower wellbeing

Inequality of opportunity; incomes don't reflect productivity

Structure society not knowing your position in it