What is the relative income hypothesis

Reference no: EM13688664

Status

1. What is the relative income hypothesis?

2. Evaluate this statement: “Once income exceeds the subsistence level, individual perceptions of the adequacy of their economic performance depend almost solely on relative as opposed to absolute position.”

3. How does concern for status affect the traditional utility function? What might concerns regarding status “look like” in health care?

Wealth

1. What can we conclude from the discussion of the various studies of the relationship between health and distribution of income?

Concern for Others/Distribution

1. What challenges does “concern for others” present for the competitive model?

2. What is a free rider (and identify a health care example) and what is the significance for the competitive model?

3. What are different types of taxes and how do they help with addressing this externality?

Tastes

1. Discuss the traditional economic view of consumer tastes. What evidence is there for/against this view?

2. What is the significance of the Milgram study with respect to the issue of consumer tastes?

Reference no: EM13688664

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