Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 18, Problem 2.1P
To determine
Identify the higher Gini coefficient in Lorenz curves.
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Use the data from the table below to construct a Lorenz curve.
Income Shares in the United States
Lowest 20%
Second Lowest 20%
Third 20%
Fourth 20%
Highest 20%
5.2
10.3
15.3
22.4
46.9
5- Calculate Gini coefficient for a country with the following deciles in income share data:
Country X: 30 (richest quantile) 20
What is the area under the Lorenz Curve? Please show your diagram.
10 5 5 5
5 3
2
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Chapter 18 Solutions
Principles of Economics (12th Edition)
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- Canada had the following distribution of Income after taxes in 2006 Based on the information in the tables, which one is the correct Gini coefficient of income inequality? Deciles cumulative share of income Lorenz curve for after tax income in Canada 0% (2006) 1 0% 1 2 2%| 3 6% 0.8 4 11% 0.6 18% 0.4 26% 0.2 37% 50% 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 9 67% share of population 10 100% cumulative share of income equidistribution line O a. 0.47 O b. 0.43 O c. 0.42 O d. 0,44 O e. 0.23 O share of incomearrow_forward100% Cumulative percentage of income 90% -Jарan 80% --- Portugal 70% 60% 50% 40% 30% 20% 10% 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Cumulative percentage of households Figure 5 Lorenz curves for Japan and Portugal Examine the Lorenz Curves for Japan and Portugal shown in Figure 5. Which of the following statements are correct? Select one or more answers. Select one or more: O The top quintile (top 20%) of households in Portugal have a higher share of total income than the top quintile (top 20%) of households in Japan. The bottom decile (bottom 10%) of households in Japan have a lower share of total income than the bottom decile (bottom 10%) of households in Portugal. Portugal will have a lower Gini coefficient than Japan. Japan has a lower level of income inequality than Portugal.arrow_forwardCumulative percentage of income 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 0% -Germany ‒‒‒ 10% Singapore 20% 30% 40% 50% %09 70% 80% %06 100% Cumulative percentage of households Figure 5 Lorenz curves for Germany and Singapore Examine the Lorenz Curves for Germany and Singapore shown in Figure 5. Which of the following statements are correct? Select one or more answers. Select one or more: The bottom quintile (bottom 20%) of households have a higher share of total income in Singapore than Germany. The top quintile (top 20%) of households have a higher share of total income in Singapore than in Germany. Singapore will have a lower Gini coefficient than Germany. Germany has a lower level of income inequality than Singapore.arrow_forward
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