The following table summarizes the income distribution for the town of Perkopia, which has a population of 10,000 people. Every individual within anincome group earns the same income, and the total annual income in the economy is $500,000,000. Suppose that in 2006, the poverty line is set atan annual income of $42,350 for an individual.Year2000200620122018Lowest Quintile3.03.43.85.0Share of Total Income in Perkopia(Percent)Middle Quintile Fourth QuintileSecond Quintile8.69.49.711.0The data in the table suggest that there was14.014.615.215.521.922.422.925.0Highest Quintile52.550.248.443.5income inequality from 2000 to 2018. Complete the following table to help you determine the poverty rate in Perkopia in 2006. To do this, begin by determining the total income of allindividuals in each quintile using the fact that total annual income in the economy is $500,000,000. Next, determine the income of an individual ineach quintile by dividing the total income of that quintile by the number of people in that quintile. (Hint: Recall that Perkopia has a population of10,000 people.) Finally, determine whether the individual income for each quintile falls below the poverty line of $42,350.Individual Income(Dollars)QuintileLowestSecondMiddleFourthHighestShare of Income in 2006(Percent)3.49.414.622.450.2Total Income(Dollars)Using the information in the previous table, the poverty rate in Perkopia in 2006 isSuppose that the government introduces a welfare program in which any individual with an income of less than $42,350 per year receives a lump-sumtransfer payment of $2,000 from the government. Assume that, in the short run, there is no change in labor-supply behavior among the people inPerkopia.In the year 2006, the poverty rate after the introduction of the welfare program in Perkopia isBelow Poverty Line?Again, suppose the government introduces a welfare program in which any individual with an income of less than $42,350 receives a lump-sumtransfer payment of $2,000 from the government. Lorenzo, a resident of Perkopia who currently earns an income of $41,884, has the opportunity towork overtime and earn an additional $1,900 this year.Which of the following statements are correct? Check all that apply.The $2,000 in aid creates a disincentive for Lorenzo to earn more than $42,350 per year.Lorenzo would gain more income by turning down the overtime than he would if he accepted the overtime.

Poverty line is the threshold or the minimum level of income considered adequate for meeting the…

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 ears the same income, and the total annual income in the economy is $500,000,000. Suppose that in 2006, the poverty line is set at an annual income of $42,350 for an individual. Year Lowest Quintile Second Quintile 2000 2006 2012 2018 3.0 3.4 3.8 5.0 Share of Total Income in Perkopia (Percent) Middle Quintile Fourth Quintile 8.6 9.4 9.7 11.0 The data in the table suggest that there was 14.0 14.6 15.2 15.5 21.9 22.4 22.9 25.0 Highest Quintile 52.5 50.2 48.4 43.5 income inequality from 2000 to 2018.

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 ears the same income, and the total annual income in the economy is $500,000,000. Suppose that in 2006, the poverty line is set at an annual income of $42,350 for an individual. Year Lowest Quintile Second Quintile 2000 2006 2012 2018 3.0 3.4 3.8 5.0 Share of Total Income in Perkopia (Percent) Middle Quintile Fourth Quintile 8.6 9.4 9.7 11.0 The data in the table suggest that there was 14.0 14.6 15.2 15.5 21.9 22.4 22.9 25.0 Highest Quintile 52.5 50.2 48.4 43.5 income inequality from 2000 to 2018.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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