For questions 4 -6: Consider an economy with 1000 residents, and-the following income distribution: each person in the- bottom quartile of the income distribution earns $10,000; each person in the middle two quartiles earns $40,000; and each- person in the top quartile of the income distribution earns $160,000. Suppose the bottom quartile pays no taxes, the middle two quartiles pay 15 percent-of its income in taxes, and the top quartile pays 30 percent of its income in taxes. Two-thirds- of all tax money is redistributed equally to all citizens in the form of military defense, government pensions (social security), roads/highways, ete. The remaining one-third of tax money is disturbed entirely to the poorest quartile. 4. Without government tax and redistribution, the Gini coefficient associated with this income distribution is A. 0.327e B. 0.412-e C. 0.425e D. 0.450- 5. The total tax collected is A. $9 millione B. $15 millione C. $21 millione D. $30 millione 6. With government tax and redistribution, the Gini coefficient associated with this income distribution is A. 0.163e C. 0.246e D. 0.145e B. 0.152e
For questions 4 -6: Consider an economy with 1000 residents, and-the following income distribution: each person in the- bottom quartile of the income distribution earns $10,000; each person in the middle two quartiles earns $40,000; and each- person in the top quartile of the income distribution earns $160,000. Suppose the bottom quartile pays no taxes, the middle two quartiles pay 15 percent-of its income in taxes, and the top quartile pays 30 percent of its income in taxes. Two-thirds- of all tax money is redistributed equally to all citizens in the form of military defense, government pensions (social security), roads/highways, ete. The remaining one-third of tax money is disturbed entirely to the poorest quartile. 4. Without government tax and redistribution, the Gini coefficient associated with this income distribution is A. 0.327e B. 0.412-e C. 0.425e D. 0.450- 5. The total tax collected is A. $9 millione B. $15 millione C. $21 millione D. $30 millione 6. With government tax and redistribution, the Gini coefficient associated with this income distribution is A. 0.163e C. 0.246e D. 0.145e B. 0.152e
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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