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The table shows the distribution of market income in an economy and the income after tax and benefits Households Lowest 20 percent Second 20 percent Thad 20 percent Fourth 20 percent Highest 20 percent Market income millions of dollars) 5 10 20 25 Income after tax and benefits 40 13 14 16 20 27 Draw the Lorenz curve for income before taxes and benefits. Pass the curve through the points when the cumulative percentages of households are 0,40, 80, and 100 percent. Draw a point to show the cumulative percentage of income received by the lowest 80 percent of households Label it Before. Draw the Lorenz curve for income after taxes and benefits. Pass the curve through the point when the cumulative percentages of households are 0, 40, 80, 100 percent Draw a point to show the cumulative percentage of income received by the lowest 80 percent of households Label it After 2001 904 BO 704 00- 504 404 30 Cumulative percentage of income equally 30 30 30 40 50 60 70000 100 Cumdave percentage of households Draw only the objects specited in the question ROO

The table shows the distribution of market income in an economy and the income after tax and benefits Households Lowest 20 percent Second 20 percent Thad 20 percent Fourth 20 percent Highest 20 percent Market income millions of dollars) 5 10 20 25 Income after tax and benefits 40 13 14 16 20 27 Draw the Lorenz curve for income before taxes and benefits. Pass the curve through the points when the cumulative percentages of households are 0,40, 80, and 100 percent. Draw a point to show the cumulative percentage of income received by the lowest 80 percent of households Label it Before. Draw the Lorenz curve for income after taxes and benefits. Pass the curve through the point when the cumulative percentages of households are 0, 40, 80, 100 percent Draw a point to show the cumulative percentage of income received by the lowest 80 percent of households Label it After 2001 904 BO 704 00- 504 404 30 Cumulative percentage of income equally 30 30 30 40 50 60 70000 100 Cumdave percentage of households Draw only the objects specited in the question ROO

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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I dont understand how to calculate and graph the second curve for income after taxes and benefits.

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The table shows the distribution of market income in an economy and the income after tax and benefits Households Lowest 20 percent Second 20 percent Third 20 percent Fourth 20 percent Highest 20 percent Market income Income after tax and benefits (millions of dollars) 5 10 20 25 40 13 14 16 20 27 Draw the Lorenz curve for income before taxes and benefits. Pass the curve through the points when the cumulative percentages of households are 0, 40, 80, and 100 percent. Draw a point to show the cumulative percentage of income received by the lowest 80 percent of households. Label it Before. Draw the Lorenz curve for income after taxes and benefits. Pass the curve through the point when the cumulative percentages of households are 0, 40, 80, 100 percent Draw a point to show the cumulative percentage of income received by the lowest 80 percent of households. Label it After 200 904 80+ 70 00- 50 404 30 204 104 Cumulative percentage of income Line of equally 630 20 30 40 50 60 20 000 200 Cumadative percentage of households Draw only the objects specited in the question SSE C
Transcribed Image Text:The table shows the distribution of market income in an economy and the income after tax and benefits Households Lowest 20 percent Second 20 percent Third 20 percent Fourth 20 percent Highest 20 percent Market income Income after tax and benefits (millions of dollars) 5 10 20 25 40 13 14 16 20 27 Draw the Lorenz curve for income before taxes and benefits. Pass the curve through the points when the cumulative percentages of households are 0, 40, 80, and 100 percent. Draw a point to show the cumulative percentage of income received by the lowest 80 percent of households. Label it Before. Draw the Lorenz curve for income after taxes and benefits. Pass the curve through the point when the cumulative percentages of households are 0, 40, 80, 100 percent Draw a point to show the cumulative percentage of income received by the lowest 80 percent of households. Label it After 200 904 80+ 70 00- 50 404 30 204 104 Cumulative percentage of income Line of equally 630 20 30 40 50 60 20 000 200 Cumadative percentage of households Draw only the objects specited in the question SSE C
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