Use the figure below, interpreting the red Lorenz curve, it can be concluded that incomes in this nation are: Percentage of income 100 80 60 40 20 O 20 Lorenz Curve b A 40 60 Percentage of households O unequal, with income inequitably distributed among household groups. O equal, with income equally distributed among all household groups. unequal, with income equally distributed among all household groups. O equal, with income inequitably distributed among all household groups. 80 P B 100

Use the figure below, interpreting the red Lorenz curve, it can be concluded that incomes in this nation are: Percentage of income 100 80 60 40 20 O 20 Lorenz Curve b A 40 60 Percentage of households O unequal, with income inequitably distributed among household groups. O equal, with income equally distributed among all household groups. unequal, with income equally distributed among all household groups. O equal, with income inequitably distributed among all household groups. 80 P B 100

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Percent of Percent of income income Alpha Beta Household percentage Lowest 20 percent Second 20 percent Third 20 percent Fourth 20 percent Highest 20 percent 9. 10 5 12 10 29 20 40 60 68. The above table shows the distribution of income in two countries, Alpha and Beta. Based on these distributions of income a. Country Beta has more equal distribution than does Country Alpha b. Both countries have equal distributions because 100 percent of the incomes are accounted for c. The Lorenz curve for country Beta is closer to the line of equality d. Country Alpha has a more equal distribution of income than does Country Beta e. It is impossible to answer the question without more information
For the United States in 2016, a Gini coefficient of 0.415 suggests that: O A. the United States has almost achieved income equality. B. the average household income is $41,500. C. relative to Sweden, Denmark, and Japan, the United States has comparatively high levels of income inequality. OD. 41.5% of US households live in poverty
What role might discrimination play in accounting for income inequality? Draw a curve that shows what happens if this group of workers is discriminated against. Label it. Draw a point to indicate the new equilibrium wage rate and employment level. Choose the correct statement. O A. Discrimination causes the wage differences between white men and white women. O B. Wage differences between different groups as a result of discrimination can act as an incentive to encourage people who are prejudiced to buy from the people against whom they are prejudiced. O C. Discrimination causes the wage differences between black men and white men. O D. Economists agree that prejudice causes all wage differentials between different groups of people. 80- 70- 60- 50 40- 30- 20- 10- Wage rate (thousands of dollars per year) 40 0+ 0.0 $2.0 2.0 Workers (thousands) >>> Draw only the objects specified in the question. 1.0 S 3.0 VMP Q 4.0
The tables show the (approximate) distributions of money income in the United States and Canada United States Cumulative percentage of Households Income Lowest 40 Lowest BO 12 50 Canada Cumulative percentage of Households Income Lowest 40 16 Lowest Bo 56 Draw the line of equality Draw the Lorenz curve for the United States Draw a point to show the cumulative percentage of income received by the lowest 80 percent of households. Label it U.S. Draw the Lorenz curve for Canada. Draw a point to show the cumulative percentage of income received by the lowest 40 percent of households Labelit Canada Based on this data, which country has the more unequal distribution? OA. Canada B. The United States OC. It is impossible to tell without more information OD. Neither. They have the same degree of inequality 100 90- 00 70- 60- 60- 40- 30- 20 10 Cumulative percentage of income 10 20 30 40 50 60 70 80 90 100 Cumulative percentage of households >>>Draw only the objects specified in the question. G
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)?
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?
Wealth, earnings, and disposable income are just three of several ways of looking at inequality. Imagine a household that earns $80,000 per year from labor. In that year, it also receives an income of $3,000 from investments, pays $12,000 in tax, and receives $7,000 in transfers from the state. Which of the following is its market income and its disposable income? O $83,000; $71,000. O $83,000 $78,000. O $80,000; $68,000. O $80,000; $75,000. J
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
Draw the Lorenz curve and compute the Gini index of a group whose annual incomes (in thousands of dollars) are given by the following frequency table. Value Frequency 30 2 50 4 60 5 90 4 100 3 120 2
a) With the following data draw a Lorenz Curve, putting labels on the graph and writing out data point values. Explain what the Lorenz Curve illustrates, and what the results mean. b) Now explain how one gets the Gini Coefficient from the Lorenz Curve, and what information the coefficient provides.
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