In a town, a few households own most of the firms, while the other households own no firms. The money the firms receive from sales is greater than their costs of production.
Why can this pattern of ownership make household incomes more unequal?
Firm owners receive the total value of their firms as household income each year, unlike households without firms.
Firm owners receive all of the firms' sales revenue as household income, while households without firms receive none.
Firm owners keep the profit left after production costs are paid, an income that households without firms do not receive.
Firm owners are paid wages for owning the firms even when they do no work, unlike households without firms.
64 exam-style questions on OCR GCSE Economics 3.3 Fair distribution of income, covering 3.3.1 Distribution of income and wealth, 3.3.2 Calculate income and wealth, and 3.3.3 Causes and consequences of income differences. Each one has a worked solution and a mark scheme showing where the marks go.