The following diagram shows the Lorenz curves for the factor (the market) income and the disposable income of the Netherlands in2010. The disposable income is the factor income plus any taxes and government transfers. A' is the area between the perfectequality line and the disposable income Lorenz curve, while B' is the area under the disposable income Lorenz curve. Based on thisinformation, which of the following statements are correct?0Cumulative share of income (%)100706050RRA00Disposable Gini coefficient 0.2560 70 80 90 10010 20 30 40Cumulative share of the populationfrom lowest to highest income (%)A. The Gini coefficient is the ratio A/B'.B. The Gini coefficient for the factor income is higher than that for the disposable income.C. The taxes and the transfers reduce income inequality in the Netherlands.D. After the taxes and the transfers, the poorest 50% of the population receive about 20% of the total income.

The Lorenz curve is a graphical representation of income or wealth distribution within a population.…

The following diagram shows the Lorenz curves for the factor (the market) income and the disposable income of the Netherlands in 2010. The disposable income is the factor income plus any taxes and government transfers. A' is the area between the perfect equality line and the disposable income Lorenz curve, while B' is the area under the disposable income Lorenz curve. Based on this information, which of the following statements are correct? Cumulative share of income (5) 100 90 Disposable Gin coefficient 0.25 60 pate income 10 20 30 40 50 60 70 80 90 100 Cumulative share of the population from lowest to highest income (%) A. The Gini coefficient is the ratio A/B. B. The Gini coefficient for the factor income is higher than that for the disposable income. C. The taxes and the transfers reduce income inequality in the Netherlands. D. After the taxes and the transfers, the poorest 50% of the population receive about 20% of the total income.

The following diagram shows the Lorenz curves for the factor (the market) income and the disposable income of the Netherlands in 2010. The disposable income is the factor income plus any taxes and government transfers. A' is the area between the perfect equality line and the disposable income Lorenz curve, while B' is the area under the disposable income Lorenz curve. Based on this information, which of the following statements are correct? Cumulative share of income (5) 100 90 Disposable Gin coefficient 0.25 60 pate income 10 20 30 40 50 60 70 80 90 100 Cumulative share of the population from lowest to highest income (%) A. The Gini coefficient is the ratio A/B. B. The Gini coefficient for the factor income is higher than that for the disposable income. C. The taxes and the transfers reduce income inequality in the Netherlands. D. After the taxes and the transfers, the poorest 50% of the population receive about 20% of the total 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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