The Economic Way of Thinking 13th Edition by David Prychitko, Peter Boettke, Paul Heyne

Exercise 15

In each of the cases described here, an increase in the family's monetary income puts all members of the original family into families with lower incomes. Explain how this occurs. Does it imply that the individuals involved are worse off? What important questions does it raise about the interpretation of family-income data?
(a) An elderly couple living with their married son receives an increase in Social Security benefits that permits the couple to obtain their own apartment.
(b) Two married people who fight constantly and stay together only because they can't afford to maintain two homes, separate with great relief when both receive promotions and raises, each taking one of the children.
(c) The husband of an orthopedic surgeon quits his job to stay home, tend the house, and give the children better care when his wife's practice begins to earn a very large income.