Refer to the figure given below. A Lorenz Curve On the Lorenz curve shown in the diagram, 100- O A. the richest 20 percent of families earn over 60 percent of total income. O B. the poorest 20 percent of families earn almost 60 percent of total 80- income. OC. perfect equality of income distribution occurs. 60- O D. the richest 20 percent of families earn almost 40 percent of total income. O E. the functional distribution of income is shown. 40- 20- A 20 Cumulative percentage of families 40 60 80 100 ..... Cumulative percentage of family income

Refer to the figure given below. A Lorenz Curve On the Lorenz curve shown in the diagram, 100- O A. the richest 20 percent of families earn over 60 percent of total income. O B. the poorest 20 percent of families earn almost 60 percent of total 80- income. OC. perfect equality of income distribution occurs. 60- O D. the richest 20 percent of families earn almost 40 percent of total income. O E. the functional distribution of income is shown. 40- 20- A 20 Cumulative percentage of families 40 60 80 100 ..... Cumulative percentage of family income

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If the Gini coefficient of a nation in 1980 was 0.50 and in 2020 it was 0.40, the nation's O income inequality is less in 2020 O income inequality is more in 2020 O tax system is less progressive in 2020 O tax system is more progressive in 2020
1. An economy's Lorenz Curve reveals that an economy's highest income quintile has 65% of the economy's income while the lowest income quintile only has 5% of the economy's income. Solely based on the Lorenz Curve, is this distribution of income fair? Why or why not? 2. To combat income inequality and to generate increased tax revenues to fund expenditures, government officials decide to aggressively increase how progressive income taxes are, so much so that the top income earners are marginally taxed 90% of their income (and while this marginal tax rate may seem oppressive, these top income earners still have more than enough income to satisfy all of their needs and all but the most extravagant of wants - basically, these earners have more than enough money). Argue why this tax policy is a fair approach to fund government expenditures. Why might this tax policy fail to achieve its objectives (tax revenues would actually decline as a result)?
Ey) 0% Cumulative share of people Multiple Choice O Which of the following statements is true? 1. The midpoint of each line demonstrates the area with least inequality. II. Curve A demonstrates a more equal society than curve B. III. On both curves, individuals in the 99th percentile of the income distribution earn more than 1 percent of the total income. I only Il and Ill only I and Ill only 0% I, II, and Ill 100% Proy 12 of 25 # Movt Help Save
Suppose that the economy of Loserville has the following distribution of income: first quintile 15% of aggregate income second quintile 20% of aggregate income third quintile 20% of aggregate income fourth quintile 20% of aggregate income fifth quintile 25% of aggregate income a. From the information provided, please derive a Lorenz Curve for Loserville. Show graphically. b. From the Lorenz Curve you have drawn, find the Gini Coefficient. c. How does Loserville compare to the United States economy?
Using the above Lorenz Curve, if Economy A decreased the progressivity of income taxes, then Economy A's Lorenz Curve would shift closer to the 45-degree reference line. shift closer to Economy B's Lorenz Curve. not shift at all
Question 27 When the government places a tax on the producer of a good or service O both the supply and demand curves for the good or service shifts to the left. the supply curve for the good or service shifts to the right. O the demand curve for the good or service shifts to the right. the supply curve for the good or service shifts to the left. the demand curve for the good or service shifts to the left.
Using the above Lorenz Curve, answer the following questions. . . Approximately what percentage of the income does the richest 20% of Country A earn? Approximately what percentage of the income does the poorest 20% of Country B earn? If the government of Country B increased the progressivity of income taxes, would its Lorenz Curve move closer to the 45-degree reference line, closer to Country A's Lorenz Curve, or not move at all?
K A Lorenz curve plots the A. percentage of total income received by each quintile against the percentage of households in the quintile OB. trend in the cumulative percentage of income received by each quintile against trend in the number of households O C. average income received by each quintile against the number of households in the quintile O D. cumulative percentage of income against the cumulative percentage of households Next
K In recent years, as the gap between the rich and the poor has increased, the Lorenz curve has O A. shifted away from the line of equality OB. shifted closer to the line of equality O c. not changed, but there has been a movement down along it O D. not changed, but there has been a movement up along it Ne