Week 2 *

Actively earnt income

  • Wages / pay / salary £££


Passive income

  • Rent

  • Dividends

  • Asset generated


Factor

  • Capital (K)

  • Land (T)

  • Labour (L)


Remuneration

  • Profit (π\pi )

  • Rent (t)

  • Wages (W )


Types of wealth ££

  • Personally acquired, consequence of someone actions

  • Inherited

  • Gift from a forebears


Marginal Productivity ( derive from John Bates Clark ) $

  • Modern economic concept

  • Wages = marginal productivity of labour


Consequences of economic inequality

  • Life expectancy, health , political, social

  • Treatment/responsibility

  • Gender, geographical, ethnic , age disabilities , health issues


Economic research

  • Economic inequality makes all of these evils worse

  • The research shows that in highly unequal societies even the better off have a poorer quality of life than they would in more equal ones.”


Gross Domestic Product ——→ ←—————-

  • GDP - measure quantify economic growth

  • Indicator of living standards

  • 3 ways to measure - output/income/expenditure methods


Improvements

  • Development is only occurring if there is a clear improvement in living standards of the mass of people and a reduction in poverty

  • Rawls Criterion - opt for the state of maximises the utility of the person in the worst position

Next Steps



Definitions

  • Numerations