Bringing water from people who are not thirsty to people who are thirsty using a leaky bucket is an illustration of ________.

Question

Quizplus · Accepted Answer

The illustration of bringing water from people who are not thirsty to people who are thirsty using a leaky bucket is an example of the efficiency costs involved in the redistribution of income. The leaky bucket represents the inefficiency involved in redistributing income from those who have it to those who do not. The water represents the resources being transferred, and the fact that the bucket is leaky represents the loss of resources that occur during the transfer. In this case, resources are being transferred from those who do not need them to those who do, but because of the leaky bucket, some resources are lost along the way, making the transfer less efficient.

Bringing Water from People Who Are Not Thirsty to People