Explain why the poverty gap ratio is the better target measure of poverty than the head- count ratio. Use diagrams to substantiate your answer. l
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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. CID Lotteries result in the distribution of income OA. becoming more unequal OB. becoming more equal OC. remaining unchanged 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 drag it. Cumulative percentage of income 100- 80- 60- 0 20 40 60 80 100 Cumulative percentage of households >>> Draw only the objects specified in the question. 40- 20-In DevEconLand, there are 10 people. Four of them earn $1/day each, two earn $3/day each and the remaining four earn $4/day each. If the poverty line is defined as $2/day, what is the headcount ratio, the total poverty gap ratio and the total poverty gap squared ratio respectively? Select one: a. 1/5, 1/5 and 1/10 respectively. b. 1/5, 2/5 and 1/5 respectively. c. 2/5, 1/5 and 1/10 respectively. d. None of the above.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
- How has assortative mating contributed to growing inequality? Taxes redistribute income from the poor to the rich O People marry someone similar to them, creating some households with many resources and others with few O Groups with political clout convince the government to implement exclusive institutions O New technologies like the internet create opportunities for the people with skills to use themCurrently, in the United States, poverty rates are comparatively low Group of answer choices for the elderly for the well-educated for whites and for all those in the other answers for the male-headed householdsQ5. Poverty measures a. The Poverty Gap Index or Normalized Poverty Gap is the Average Poverty Gap divided by the poverty line. Show that the poverty gap index is the FGT index with a = 1 b. A population that has a greater share of extreme poor among the poor will have a higher P2, even if it has the same headcount ratio and poverty gap index as another population. Explain. c. Consider a population with four individuals with incomes y₁ = {7, 3, 8, 4} and a poverty yi line yp 5. Calculate Po, P₁, and P2. = d. What is the Multidimensional Poverty Index (MPI) and how is it a more improved measure of poverty?
- A5. Suppose that the initial rural distribution of income is (1, 2, 3, 4) while the initial urban distribution is (3, 4). The poverty line is 2, so the overall poverty rate (headcount index) is 1/3. Now imagine that all of the rural poor move to urban areas and each of them gains 20% in real income. Verify that the overall poverty rate falls to 1/6, yet the urban poverty rate rises from zero to 1/4.Poverty is measured by the number of people who fall below a certain level of income—called the poverty line—that defines the income one needs for a basic standard of living. The official definition of the poverty line traces back to Group of answer choices A)The Great Depression B)Mollie Orshansky, whose idea was to define a poverty line based on the cost of a healthy diet. C)1953 and the ability to pay for housing and food. D)The 1965 cost of providing food, housing, and transportation.Consider the Lorenz curves for income for Deneb and Elnath as shown in this figure: Lorenz curves for Deneb and Elnath cumullative income share (%) 8 8 2 2 2 2 2 2 2 2 100 90 80 70 60 40 30 Lorenz curve for Elnath 0 0 10 20 30 40 50 60 70 80 90 100 income percentiles Lorenz curve for Deneb [If the image above doesn't appear click here to open it in a new tab.] Which of the following statements is true? [Hint: You do not need to calculate any areas to answer this question correctly!] The relative income inequalities of Deneb and Elnath cannot be determined from the information given. Income inequality is more extreme in Deneb than it is in Elnath. Deneb and Elnath have the same degree of income inequality. Income inequality is more extreme in Elnath than it is in Deneb.
- The graph attached shows the Lorenz curves of two different countries stylistically called ‘red’ and ‘green’. The two countries report equal Gini coefficients indicating equal measures of income inequality. However, several experts argue that the green country is less unequal than the red country. Explain the criteria used to make such an argument.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 /…Need instant.absuletly upvote.