a. Draw a Lorenz curve for an economy comprising of unemployed (with zero income), workers and employers that serves as a representation of South Africa b. Use this Lorenz curve to explain how growth that reduces unemployment affects income inequality. c. Use the Lorenz curve from (a) to illustrate and discuss how the implementation of a Basic Income Grant (a payment of a fixed amount of income to every person) financed through taxation may affect inequality of disposable income.

a. Draw a Lorenz curve for an economy comprising of unemployed (with zero income), workers and employers that serves as a representation of South Africa b. Use this Lorenz curve to explain how growth that reduces unemployment affects income inequality. c. Use the Lorenz curve from (a) to illustrate and discuss how the implementation of a Basic Income Grant (a payment of a fixed amount of income to every person) financed through taxation may affect inequality of disposable income.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter20: Income Inequality And Poverty

Section: Chapter Questions

Problem 5PA

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