Question

microeconomics pramotes disparities in income distribution even when resources are optimally utilized substantiate this observation​

Answer 1

Answer:

Answer

In the market economies, resources are optimally utilised because every producer focuses on maximisation of output per unit of input. But, disparities in income distribution are highly pronounced because:

(i) Resources are allocated to the production of those goods which yield high profits. As a result, goods are produced largely for richer section of the society and the poor suffer deprivation.

(ii) In the market economies, jobs are outsourced to those economies where labour cost is low. This causes a cut in domestic employment. Accordingly, wage component of GDP tends to shrink even when profits tend to shrink even when profits tends to rise.

Answer 2

Answer:

Market economies promote disparities in income distribution even when resources are optimally utilised. Substantiate this observation. ... Products on which the returns are high get more resources. It means that the more goods are being produced for the rich or elite class of the society.