An economy has 5 households with annual income (alphabetical order): A - $40,000, B - 30,000, C - 60,000, D - 70,000, E - $50,000. 1. Fill in the following table by ranking households income from low to high. 1st 20% being lowest and 5th 20% the highest. 2. Complete the calculation of cumulative income. 3. To complete the Lorenz curve, we need the share of cumulative income in total income. The cumulative income of low 60% of households has how much share (percentage) in total income? 4. The top 20% household in this economy enjoys how much percentage of total income? Houscholds Rank Cumulative Income Income 1 20% 2nd 20% 3rd 20% 4th 20% sth 20%
An economy has 5 households with annual income (alphabetical order): A - $40,000, B - 30,000, C - 60,000, D - 70,000, E - $50,000. 1. Fill in the following table by ranking households income from low to high. 1st 20% being lowest and 5th 20% the highest. 2. Complete the calculation of cumulative income. 3. To complete the Lorenz curve, we need the share of cumulative income in total income. The cumulative income of low 60% of households has how much share (percentage) in total income? 4. The top 20% household in this economy enjoys how much percentage of total income? Houscholds Rank Cumulative Income Income 1 20% 2nd 20% 3rd 20% 4th 20% sth 20%
Chapter1: Making Economics Decisions
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
Transcribed Image Text:An economy has 5 households with annual income (alphabetical order): A - $40,000, B -
30,000, C - 60,000, D - 70,000, E - $50,000.
1. Fill in the following table by ranking households income from low to high. 1st 20% being lowest
and 5th 20% the highest.
2. Complete the calculation of cumulative income.
3. To complete the Lorenz curve, we need the share of cumulative income in total income. The
cumulative income of low 60% of households has how much share (percentage) in total income?
4. The top 20% household in this economy enjoys how much percentage of total income?
Houscholds
Income
Cumulative
Rank
Income
1st 20%
2nd 20%
3nd 20%
4th 20%
sth
20%
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