2. Constructing a Lorenz curve from income shares dataThe following table shows the approximate income distribution for Peru, Bulgaria, and Lithuania in 2016. In particular, it shows the income shares ofeach fifth of the income distribution.Percentage Share, 2016Percentage of Families Peru BulgariaLithuaniaLowest fifth497Second-lowest fifth81412Middle fifth121716Second-highest fifthHighest fifth202222563843has the most total income.On the following graph, plot the Lorenz curves for the three countries. Plot Peru's Lorenz curve using the green points (triangle symbol), Bulgaria'sLorenz curve using the blue points (circle symbol), and Lithuania's Lorenz curve using the purple points (diamond symbol). Be sure to plot the firstpoint of each Lorenz curve at (0,0).Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.CUMULATIVE PERCENTAGE OF MONEY INCOMEgraph.)10020406080100CUMULATIVE PERCENTAGE OF FAMILIESPeruBulgariaLithuaniahas the most income inequality. (Hint: You may want to refer to the previous Lorenz curve

Peru is represented by green circles.Bulgaria is represented by blue diamonds.Lithuania is…

Answered: 2. Constructing a Lorenz curve from…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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question 1. It has been widely reported that income inequality within the US and other industrialized countries is growing. Yet one of the stylized facts is that capital does not seem to benefit from economic growth (as evidenced by the approximate constancy of the return to capital across time). If this is the think must be driving income inequality? case, what do you
Q2] Given is the data for Country A and B: Population Fraction Country A's Income Country B's Income bottom 25% 5 million 10 million 2nd 25% 10 million 15 million 3rd 25% 30 million 20 million top 25% 55 million 55 million a) Compute the cumulative income share and neatly plot (using Excel) the Lorenz curve for these two countries with labels. Feel free to use excel template that I have uploaded and copy paste the plot. b) Compute the Gini coefficient assuming the region beneath the two respective Lorenz curve is For country A = 0.2875 For country B = 0.3250

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