Economics for Managers.ppt

IV Governments * The red line shows how market incomes translate into income after redistribution with a negative income tax gives a guaranteed annual income of G and decreases benefits at the same rate as the tax rate on incomes. Households with market incomes below B, the break-even income, receive net benefits. Those with market incomes above B pay net taxes. IV Governments * Marginal social cost (MSC)= marginal private cost (MPC) + incidental cost (positive or negative) that is born by others. Can we calculate or estimate those incidental costs? Production -- smoke spews into the air,