The following table summarizes the income distribution for the town of Perkopia, which has a population of 10,000 people. Every individual within an income group earns the same income, and the total annual income in the economy is $500,000,000. Suppose that in 2016, the poverty income threshold, or poverty line, is set at an annual income of $43,275 for an individual. Year Share of Total Income in Perkopia (Percent) Lowest Quintile Second Quintile Middle Quintile Fourth Quintile Highest Quintile 2006 3.0 7.6 14.0 21.7 53.7 2010 3.3 9.0 14.7 22.4 50.6 2016 3.9 9.5 15.0 22.7 48.9 2020 5.0 10.0 16.0 24.0 45.0 The data in the table suggest that there was income inequality from 2006 to 2020. Complete the following table to help you determine the poverty line in Perkopia in 2016. To do this, begin by determining the total income of all individuals in each quintile, using the fact that total annual income in the economy is $500,000,000. Next, determine the income of an individual in each quintile by dividing the total income of that quintile by the number of people in that quintile. (Hint: Recall that Perkopia has a population of 10,000 people.) Finally, determine whether the individual income for each quintile falls below the poverty income threshold, or poverty line, of $43,275. Quintile Share of Income in 2016 Total Income Individual Income Below Poverty Line? (Percent) (Dollars) (Dollars) Lowest 3.9 Second 9.5 Middle 15.0 Fourth 22.7 Highest 48.9 Using the information in the previous table, the fraction of the total population living below the poverty line of $43,275 in Perkopia in 2016 is . Suppose that the government introduces a welfare program in which any individual with an income of less than $43,275 per year receives a lump-sum transfer payment of $8,000 from the government. Assume that, in the short run, there is no change in labor-supply behavior among the people in Perkopia. In the year 2016, the fraction of the population living below the poverty line after the introduction of the welfare program in Perkopia is . Again, suppose the government introduces a welfare program in which any individual with an income of less than $43,275 receives a lump-sum transfer payment of $8,000 from the government. Rina, a resident of Perkopia who currently earns an income of $43,172, has the opportunity to work overtime and earn an additional $1,400 this year. Which of the following statements are correct? Check all that apply. The $8,000 in aid presents a disincentive for Rina to make more than $43,275 per year. Rina may accept the overtime if she feels that taking it will increase the chances of her receiving a significant promotion. Rina would gain more income by turning down the overtime than she would if she accepted the overtime.

The following table summarizes the income distribution for the town of Perkopia, which has a population of 10,000 people. Every individual within an income group earns the same income, and the total annual income in the economy is $500,000,000. Suppose that in 2016, the poverty income threshold, or poverty line, is set at an annual income of $43,275 for an individual. Year Share of Total Income in Perkopia (Percent) Lowest Quintile Second Quintile Middle Quintile Fourth Quintile Highest Quintile 2006 3.0 7.6 14.0 21.7 53.7 2010 3.3 9.0 14.7 22.4 50.6 2016 3.9 9.5 15.0 22.7 48.9 2020 5.0 10.0 16.0 24.0 45.0 The data in the table suggest that there was income inequality from 2006 to 2020. Complete the following table to help you determine the poverty line in Perkopia in 2016. To do this, begin by determining the total income of all individuals in each quintile, using the fact that total annual income in the economy is $500,000,000. Next, determine the income of an individual in each quintile by dividing the total income of that quintile by the number of people in that quintile. (Hint: Recall that Perkopia has a population of 10,000 people.) Finally, determine whether the individual income for each quintile falls below the poverty income threshold, or poverty line, of $43,275. Quintile Share of Income in 2016 Total Income Individual Income Below Poverty Line? (Percent) (Dollars) (Dollars) Lowest 3.9 Second 9.5 Middle 15.0 Fourth 22.7 Highest 48.9 Using the information in the previous table, the fraction of the total population living below the poverty line of $43,275 in Perkopia in 2016 is . Suppose that the government introduces a welfare program in which any individual with an income of less than $43,275 per year receives a lump-sum transfer payment of $8,000 from the government. Assume that, in the short run, there is no change in labor-supply behavior among the people in Perkopia. In the year 2016, the fraction of the population living below the poverty line after the introduction of the welfare program in Perkopia is . Again, suppose the government introduces a welfare program in which any individual with an income of less than $43,275 receives a lump-sum transfer payment of $8,000 from the government. Rina, a resident of Perkopia who currently earns an income of $43,172, has the opportunity to work overtime and earn an additional $1,400 this year. Which of the following statements are correct? Check all that apply. The $8,000 in aid presents a disincentive for Rina to make more than $43,275 per year. Rina may accept the overtime if she feels that taking it will increase the chances of her receiving a significant promotion. Rina would gain more income by turning down the overtime than she would if she accepted the overtime.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Related questions

Question

Year	Share of Total Income in Perkopia
(Percent)
Lowest Quintile	Second Quintile	Middle Quintile	Fourth Quintile	Highest Quintile
2006	3.0	7.6	14.0	21.7	53.7
2010	3.3	9.0	14.7	22.4	50.6
2016	3.9	9.5	15.0	22.7	48.9
2020	5.0	10.0	16.0	24.0	45.0

The data in the table suggest that there was income inequality from 2006 to 2020.

Complete the following table to help you determine the poverty line in Perkopia in 2016. To do this, begin by determining the total income of all individuals in each quintile, using the fact that total annual income in the economy is $500,000,000. Next, determine the income of an individual in each quintile by dividing the total income of that quintile by the number of people in that quintile. (Hint: Recall that Perkopia has a population of 10,000 people.) Finally, determine whether the individual income for each quintile falls below the poverty income threshold, or poverty line, of $43,275.

Quintile	Share of Income in 2016	Total Income	Below Poverty Line?
(Percent)	(Dollars)	(Dollars)
Lowest	3.9
Second	9.5
Middle	15.0
Fourth	22.7
Highest	48.9		Using the information in the previous table, the fraction of the total population living below the poverty line of $43,275 in Perkopia in 2016 is . Suppose that the government introduces a welfare program in which any individual with an income of less than $43,275 per year receives a lump-sum transfer payment of $8,000 from the government. Assume that, in the short run, there is no change in labor-supply behavior among the people in Perkopia. In the year 2016, the fraction of the population living below the poverty line after the introduction of the welfare program in Perkopia is . Again, suppose the government introduces a welfare program in which any individual with an income of less than $43,275 receives a lump-sum transfer payment of $8,000 from the government. Rina, a resident of Perkopia who currently earns an income of $43,172, has the opportunity to work overtime and earn an additional $1,400 this year. Which of the following statements are correct? Check all that apply. The $8,000 in aid presents a disincentive for Rina to make more than $43,275 per year. Rina may accept the overtime if she feels that taking it will increase the chances of her receiving a significant promotion. Rina would gain more income by turning down the overtime than she would if she accepted the overtime.

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