8. Four students have yearly incomes of $5,000, $15,000, $20,000, and $60,000. a. Make a table of the Lorenz Curve and use the Trapezoidal Rule with 4 trapezoids to find the area under the Lorenz Curve. Your answer should be correct to 2 places after the decimal point. The area under the Lorenz Curve is b. Use the results of Part a to find the Gini Index. Your answer should be correct to 2 places after the decimal point. The Gini Index is

8. Four students have yearly incomes of $5,000, $15,000, $20,000, and $60,000. a. Make a table of the Lorenz Curve and use the Trapezoidal Rule with 4 trapezoids to find the area under the Lorenz Curve. Your answer should be correct to 2 places after the decimal point. The area under the Lorenz Curve is b. Use the results of Part a to find the Gini Index. Your answer should be correct to 2 places after the decimal point. The Gini Index is

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The $1.4 billion trick to make us accept income inequality Lotteries take money from the poor and redistribute it unequally. The poor, the uneducated, and minorities play the lottery the most, and it takes a big chunk of their income Source: The Huffington Post, January 12, 2016 If the news clip is correct, how does a lottery change the distribution of income? Draw two Lorenz curves to illustrate your answer. Lotteries result in the distribution of income Draw the Lorenz curve in a country that does not have lotteries. Label it Before Draw the Lorenz curve for the country after the introduction of lotteries. Label it After >>> To reposition the label click on the cross by the label box and dragging it 100 80 60 40- 20 Cumulative percentage of income 100 20 40 60 00 Cumulative percentage of households >>>Draw only the objects specified in the question G
Suppose there are 3 households in each society. This table shows income for poor, middle, and rich household, average income for all households, and the Gini coefficient for 4 societies. Based on this table, which of the following is true? (Select all that apply.) Society A Society B Society C Society D оооо Household Income Poor Middle Household Household 20,000 15,000 25,000 30,000 40,000 40,000 40,000 40,000 Rich Household 75,000 100,000 200,000 10,000,000 Society D has the most unequal income distribution. Society A has the most equal income distribution. Society D has the highest overall average income. Society A has the lowest overall average income. Average Income 45,000 51,667 88,333 3,356,667 Gini coefficient .27 .37 .44 .66
Question One The figure below shows three alternative distributions of land ownership in a village with people and 100 hectares of land. a. Draw the Lorenz curves for each case. 10 points b. For cases I and III, calculate the Girl 10 points c For case il, show on the Lorenz curve diagram how the Gini coefficient can be calculated. 5 points Question One The figure below shows three alternative distributions of land ownership in a village with 10 people and 100 hectares of land. a. Draw the Lorenz curves for each case. b. For cases I and III, calculate the Gini c. For case II, show on the Lorenz curve diagram how the Gini coefficient can be calculate 80 people own nothing 20 people own 5 hectares each 40 people own nothing 40 people own 20 people own 1 hectare each 3 hectares each 100 people own 1 hectare each
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 /…
Suppose the teacher for your course, "Principles of Economics" is a libertarian and adheres strictly by its principles in running your economics class. What policies would you expect your teacher to institute? Policies a Libertarian Would Enforce Policies a Libertarian Would Not Enforce The teacher, seeing grade inequality, decides to give points from the best student's test to the worst's students test. The teacher decides to give everyone in the class an A. The teacher punishing a student for cheating on her income equality and poverty homework assignment. Grade the class on a curve to ensure even grade distribution. When proctoring a test, your teacher requires all students to be given the test face down and all turn over your tests at the same time so that no one has a time advantage.
a) With the following data draw a Lorenz Curve, putting labels on the graph and writing out data point values. Explain what the Lorenz Curve illustrates, and what the results mean. b) Now explain how one gets the Gini Coefficient from the Lorenz Curve, and what information the coefficient provides.
Using the above Lorenz Curve, answer the following questions. . . Approximately what percentage of the income does the richest 20% of Country A earn? Approximately what percentage of the income does the poorest 20% of Country B earn? If the government of Country B increased the progressivity of income taxes, would its Lorenz Curve move closer to the 45-degree reference line, closer to Country A's Lorenz Curve, or not move at all?
Use the data from the table below to construct a Lorenz curve. Income Shares in the United States Lowest 20% Second Lowest 20% Third 20% Fourth 20% Highest 20% 5.2 10.3 15.3 22.4 46.9
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