Homework #1
6) A) How does the provision of social security affect people incentive to save while they are working?
There is a benefit offset for people who retire early. At age 62, I will start getting Social Security benefits (in two months). I can work and earn up to $12,600.00 without a reduction in SS benefits.
On an actuarial basis, a person gets the same total amount of benefits if he retires early or after age 65. You just get lower payments, but for a longer period of time.
I retired early. So my SS benefits will be like a huge, tax free, pay raise for doing nothing.
If a person does experience a benefit reduction, he really do Explain whether each of the following government activities is motivated by esn't lose benefits!!!!!!!!! If you take your SS benefits at age 62, and if you earn more than the minimum allowed, you are paying Social Security taxes while you work. You work longer, pay more in and benefits ultimately increase.
B) how does the reduction in benefits associated with higher earning affect people incentive to work past age 65?
When the benefites are reduced (like an increase in the age you can start collecting ... or a decrease in the inflation adjustment) then the dependants of SS will find they do not have enough money to pay their bills. This will entice many to find employment to compensate for what they cannot purchase (medicines, rent, food, etc.
8) a concern about equality or a concern about efficiency in the case of efficiency discuss about efficiency in the case of efficiency
a. This shows the government's concern about efficiency. The market failure involved is due to market power where small group of persons or a single person influences market prices.
b. This shows the government's concern about equality.
c. This shows the government's concern about efficiency. The market failure involved is known as an