1. Income inequality and the poverty rateThe following table summarizes the income distribution for the town of Perkopia, which has a population of 10,000 people. Every individual within anincome group earns the same income, and the total annual income in the economy is $500,000,000. Suppose that in 2019, the poverty line is set atan annual income of $40,850 for an individual.AShare of Total Income in Perkopia(Percent)Year Lowest QuintileSecond QuintileMiddle Quintile Fourth QuintileHighest Quintile20014.010.016.523.046.520073.89.715.022.549.020133.48.814.822.051.020193.08.214.021.853.0The data in the table suggest that there wasincome inequality from 2001 to 2019. Complete the following table to help you determine the poverty rate in Perkopia in 2019. To do this, begin by determining the total income of allindividuals in each quintile using the fact that total annual income in the economy is $500,000,000. Next, determine the income of an individual ineach quintile by dividing the total income of that quintile by the number of people in that quintile. (Hint: Recall that Perkopia has a population of10,000 people.) Finally, determine whether the individual income for each quintile falls below the poverty line of $40,850.Share of Income in 2019(Percent)Total Income(Dollars)QuintileIndividual Income(Dollars)Below Poverty Line?Lowest3.0Second8.2Middle14.0Fourth21.8Highest53.0Using the information in this table, the poverty rate in Perkopia in 2019 isSuppose that the government introduces a welfare program in which any individual with an income of less than $40,850 per year receives a lump-sumtransfer payment of $3,000 from the government. Assume that, in the short run, there is no change in labor-supply behavior among the people inPerkopia.In the year 2019, the poverty rate after the introduction of the welfare program in Perkopia isAgain, suppose the government introduces a welfare program in which any individual with an income of less than $40,850 receives a lump-sumtransfer payment of $3,000 from the government. Deborah, a resident of Perkopia who currently earns an income of $40,050, has the opportunity towork overtime and earn an additional $1,500 this year.Which of the following statements are correct? Check all that apply.Deborah would gain more income by turning down the overtime than she would if she accepted the overtime.The $3,000 in aid presents a disincentive for Deborah to make more than $40,850 per year.Deborah may accept the overtime if she feels that taking it will increase the chances of her receiving a significant promotion.二二二二二

1. Income inequality and the poverty rate The following table summarizes the income distribution for the town of Perkopia, which has a population of 10,000 people. Every individual within an income group earns the same income, and the total annual income in the economy is $500,000,000. Suppose that in 2019, the poverty line is set at an annual income of $40,850 for an individual. Share of Total Income in Perkopia (Percent) Year Lowest Quintile Second Quintile Middle Quintile Fourth Quintile Highest Quintile 2001 4.0 10.0 16.5 23.0 46.5 2007 3.8 9.7 15.0 22.5 49.0 2013 3.4 8.8 14.8 22.0 51.0 2019 3.0 8.2 14.0 21.8 53.0 The data in the table suggest that there was income inequality from 2001 to 2019.

1. Income inequality and the poverty rate The following table summarizes the income distribution for the town of Perkopia, which has a population of 10,000 people. Every individual within an income group earns the same income, and the total annual income in the economy is $500,000,000. Suppose that in 2019, the poverty line is set at an annual income of $40,850 for an individual. Share of Total Income in Perkopia (Percent) Year Lowest Quintile Second Quintile Middle Quintile Fourth Quintile Highest Quintile 2001 4.0 10.0 16.5 23.0 46.5 2007 3.8 9.7 15.0 22.5 49.0 2013 3.4 8.8 14.8 22.0 51.0 2019 3.0 8.2 14.0 21.8 53.0 The data in the table suggest that there was income inequality from 2001 to 2019.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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If an economy's income is completely equally distributed, then the value of its Gini coefficient is income is completely unequally distributed, then the value of its Gini coefficient is 0; infinity 0; 1 1;0 infinity ; 0 If an economy's Suppose the Gini coefficient in Canada is 0.05, and the Gini coefficient in the United States is 0.42. Which country's income distribution is more evenly distributed? Canada Canada and the United States have the same income distribution. the United States More information is needed to answer this question.
1. An economy's Lorenz Curve reveals that an economy's highest income quintile has 65% of the economy's income while the lowest income quintile only has 5% of the economy's income. Solely based on the Lorenz Curve, is this distribution of income fair? Why or why not? 2. To combat income inequality and to generate increased tax revenues to fund expenditures, government officials decide to aggressively increase how progressive income taxes are, so much so that the top income earners are marginally taxed 90% of their income (and while this marginal tax rate may seem oppressive, these top income earners still have more than enough income to satisfy all of their needs and all but the most extravagant of wants - basically, these earners have more than enough money). Argue why this tax policy is a fair approach to fund government expenditures. Why might this tax policy fail to achieve its objectives (tax revenues would actually decline as a result)?
33. Which is not a exclusion in gross income * a. United States Veterans Administration (USVA) b. Social Security Systems (SSS) benefits under RA 8282 c. GSIS benefits under RA 8291 including retirement gratuity received by government officials and employees d. Philhealth proceeds under RA 9192
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Wealth, earnings, and disposable income are just three of several ways of looking at inequality. Imagine a household that earns $80,000 per year from labor. In that year, it also receives an income of $3,000 from investments, pays $12,000 in tax, and receives $7,000 in transfers from the state. Which of the following is its market income and its disposable income? O $83,000; $71,000. O $83,000 $78,000. O $80,000; $68,000. O $80,000; $75,000. J
4. Redistributive philosophies and incentives Consider a society consisting of two people. Raphael earns an income of $90,000 per year and Susan earns an income of $35,000 per year. The government is considering a redistribution plan that would impose a 20% tax on Raphael's income and give the revenue to Susan. Without any incentive distortion, Raphael would retain $72,000 and Susan would end up with $53,000. However, let us assume that since Raphael will not receive all the income he earns, he decides to work less and earn an income of only $80,000, of which 20% x $80,000 = $16,000 will be owed in taxes. With the redistribution plan, Raphael will take home an income of S The $16,000 that Raphael pays in taxes will be transferred by the government to Susan. Let us assume that since Susan now receives payment from the government, she will not work as many hours and will earn an income from work of only $34,000 instead of her initial $35,000. With the redistribution plan, Susan's total…
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Abraham. Income level $10,000 $50,000 $100,000 Refer to the table above. Abraham faces a a) progressive Ob) proportional Oc) regressive $5,000 $10,000 $15,000 Taxes Paid Brenda $1,000 $5,000 $10,000 tax system. Caitlyn $1,000 $10,000 $30,000
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BUS202 CH15 01 How do Economists define Poverty? 1. Economist define the concept of poverty as an economic state where an individual or household level of income is below a level of annual income necessary to provide a minimum or basic standard of living. 2. The poverty rate is directly rélated to how income is distributed within a society. Per capita income in 2015 and 2016 is estimated at $56,850 and $62,606, respectively. 3. A minimum standard of living refers to the ability of an individual to acquire food, clothing and housing at an adequate level to avoid economic distress. 4. The U.S. government economists evaluate the cost to individuals and households to acquire food, clothing, and housing to maintain a minimum healthy lifestyle. 5. The bench market for the income level necessary to maintain a basic standard of living is based on USDA Research that uses a baseline cost estimate associated with maintaining a healthy diet of 1800 to 2300 calories per day. ¢ YouTube Q [3 5:09 /…
TRUE or FALSE 64. Public policy is essential in solving poverty at the local and national levels. 65. Solving poverty has to be done from macroeconomic and microeconomic levels. 66. The Kuznets Curve is a graphical presentation of the relationship between the Gini coefficient and GNI per capita
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