1. What goods or services do you and your family receive without directly paying for them? How do these goods affect the distribution of economic welfare?
2. Why are incomes distributed so unevenly? Identify and explain three major causes of inequality.
3. Do inequalities stimulate productivity? In what ways? Provide two specific examples.
4. What loopholes reduced President Obama's 2010 tax bill (see News, p. 413)? What's the purpose of those loopholes?
5. How might a flat tax affect efficiency? Fairness?
6. If a new tax system encouraged more output but also cre- ated greater inequality, would it be desirable?