Lecture 17: Inequality, Poverty, Social Insurance, and Redistribution

These flashcards cover key vocabulary and concepts related to inequality, poverty, and social insurance based on lecture notes.

Income Inequality

The disparity in annual income earned by different groups in the population.

Inequality of Opportunity

The unequal chances for individuals to succeed economically based on factors such as family income or socio-economic background.

Permanent Income

An individual's average lifetime income, measuring consumption decisions over a lifetime rather than current income.

Intergenerational Mobility

The extent to which economic status of children is independent from their parents' economic status.

Means-tested

Programs that provide assistance based on an individual's income and wealth.

Social Safety Net

Government programs designed to provide financial assistance to individuals and families in need.

Diminishing Marginal Utility

The decrease in added satisfaction or utility from consuming additional units of a good or service as one has more.

Progressive Tax System

A tax system where the tax rate increases as the taxable amount increases.

Regressive Tax System

A tax system where the tax rate decreases as the amount subject to taxation increases, placing a higher burden on lower-income individuals.

Utility

A measure of a person's well-being or satisfaction, often referred to in terms of 'utils'.

Deadweight Loss (DWL)

The loss of economic efficiency that occurs when equilibrium for a good or service is not achieved or is not achievable.