Calculate1) average incomes2) the Palma ratio (P10:P40) for each year to show that such urbanization combined with a persistent urban-rural income gap would be enough to create an inverted U-shape relationship (Kuznets Curve) between average income and inequality. Year1950197019902000Rural %0.950.810.530.25Urban %0.050.190.470.75TotalPopulation5000500050005000Rural IncomePer Person(Currency)19000190001900019000Urban IncomePer Person(Currency)47000470004700047000

Inequality means the difference in the share of income, between rich and poor, the difference…

Calculate 1) average incomes 2) the Palma ratio (P10:P40) for each year to show that such urbanization combined with a persistent urban-rural income gap would be enough to create an inverted U-shape relationship (Kuznets Curve) between average income and inequality.

Calculate 1) average incomes 2) the Palma ratio (P10:P40) for each year to show that such urbanization combined with a persistent urban-rural income gap would be enough to create an inverted U-shape relationship (Kuznets Curve) between average income and inequality.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Calculate

1) average incomes

2) the Palma ratio (P10:P40) for each year to show that such urbanization combined with a persistent urban-rural income gap would be enough to create an inverted U-shape relationship (Kuznets Curve) between average income and inequality.

Year
1950
1970
1990
2000
Rural %
0.95
0.81
0.53
0.25
Urban %
0.05
0.19
0.47
0.75
Total
Population
5000
5000
5000
5000
Rural Income
Per Person
(Currency)
19000
19000
19000
19000
Urban Income
Per Person
(Currency)
47000
47000
47000
47000

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