Using the figure below, calculate the gain from redistributing $25,000 from those earning $100,000 to those earning $50,000. Why do you think that this gain in well-being is smaller than the...

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Using the figure below, calculate the gain from redistributing $25,000 from those earning $100,000 to those earning $50,000. Why do you think that this gain in well-being is smaller than the redistribution in the example in the chapter, which redistributed from someone earning $200,000 to someone earning $20,000? What are some potential problems with this redistribution plan?



Answered 192 days AfterMay 24, 2022

Answer To: Using the figure below, calculate the gain from redistributing $25,000 from those earning $100,000...

Robert answered on Dec 02 2022
39 Votes
The answers are as follows:
With the redistribution plan, Darnell will take home an income of $ 900
00*(1-0.25) = $67,500
With the redistribution plan, Eleanor's total income (including the government payment received) is now $(29000+22500) = $ 51500.
Without a redistribution plan, total income in...
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