Why does redistribution, so that the distribution of income is equal, bring about less total output?
A) No one can determine marginal benefit or marginal cost as a result.
B) Because the marginal benefit and marginal cost of work have been equally increased.
C) The premise of the question is incorrect because an equal distribution of income would increase rather than decrease the total amount produced.
D) Those in political power will likely receive a larger income.
E) Incentives to work are reduced.

Question

Quizplus · Accepted Answer

Redistribution can reduce incentives to work because individuals may not see the benefit of working harder if their income is going to be redistributed regardless. This can result in less total output as less effort is put forth in the production process.

Why Does Redistribution, So That the Distribution of Income Is