MICROECONOMICS (LL)-W/ACCESS >CUSTOM<
11th Edition
ISBN: 9781264207718
Author: Colander
Publisher: MCG CUSTOM
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Question
Chapter 18, Problem 2QAP
(a)
To determine
The wealth distribution of Americans.
(b)
To determine
Role of government in wealth distribution.
(c)
To determine
Teachings of both testaments regarding the private individual’s behavior.
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Students have asked these similar questions
4. a. Draw, on the same graph, a Lorenz curve representing
Perfect income equality
Perfect income inequality
i.
ii.
ii.
A typical rich country with a lot of redistribution
A typical middle-income country with little redistribution
b. Consider a country that makes its social support programs (like “food stamps",
insurance, or programs that provide goods like housing or health care to the poor) more
generous, while taxing the rich more in order to fund the programs. How will that economy's
Lorenz curve change?
c. Suppose a country becomes richer, such that over 10 years, every person's income exactly
doubles. What happens to that economy's Lorenz curve?
iv.
unemployment
=
The $1.4 billion trick to make us accept income inequality
Lotteries take money from the poor and redistribute it unequally. The poor, the uneducated, and minorities play the lottery
the most, and it takes a big chunk of their income.
Source: The Huffington Post, January 12, 2016
If the news clip is correct, how does a lottery change the distribution of income? Draw two Lorenz curves to illustrate your
answer.
CID
Lotteries result in the distribution of income
OA. becoming more unequal
OB. becoming more equal
OC. remaining unchanged
Draw the Lorenz curve in a country that does not have lotteries. Label it Before.
Draw the Lorenz curve for the country after the introduction of lotteries. Label it After.
>>> To reposition the label click on the cross by the label box and drag it.
Cumulative percentage of income
100-
80-
60-
0
20
40
60
80
100
Cumulative percentage of households
>>> Draw only the objects specified in the question.
40-
20-
1. Describe how each of these changes is likely to affect poverty and inequality:
a. Incomes rise for low-income and high-income workers, but rise more for the high-income earners
b. Incomes fall for low-income and high-income workers, but fall more for high-income earners.
2. Based on the theory of rational ignorance, what should we expect to happen to voter turnout as the Internet makes information easier to obtain?
3. What is the cost of voting in an election?
4. What is the main factor preventing a large community from influencing policy in the same way as a special interest group?
5. How does the TANF attempt to loosen the poverty trap?
Chapter 18 Solutions
MICROECONOMICS (LL)-W/ACCESS >CUSTOM<
Ch. 18.1 - Prob. 1QCh. 18.1 - Prob. 2QCh. 18.1 - Prob. 3QCh. 18.1 - Prob. 4QCh. 18.1 - Prob. 5QCh. 18.1 - Prob. 6QCh. 18.1 - Prob. 7QCh. 18.1 - Prob. 8QCh. 18.1 - Prob. 9QCh. 18.1 - Prob. 10Q
Ch. 18 - Prob. 1QECh. 18 - Prob. 2QECh. 18 - Prob. 3QECh. 18 - Prob. 4QECh. 18 - Prob. 5QECh. 18 - Prob. 6QECh. 18 - Prob. 7QECh. 18 - Prob. 8QECh. 18 - Prob. 9QECh. 18 - Prob. 10QECh. 18 - Prob. 11QECh. 18 - Prob. 12QECh. 18 - Prob. 13QECh. 18 - Prob. 1QAPCh. 18 - Prob. 2QAPCh. 18 - Prob. 3QAPCh. 18 - Prob. 4QAPCh. 18 - Prob. 5QAPCh. 18 - Prob. 1IPCh. 18 - Prob. 2IPCh. 18 - Prob. 3IPCh. 18 - Prob. 4IPCh. 18 - Prob. 5IPCh. 18 - Prob. 6IPCh. 18 - Prob. 7IPCh. 18 - Prob. 8IPCh. 18 - Prob. 9IP
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Similar questions
- What are some reasons why a certain degree of inequality of income would be expected in a market economy?arrow_forwardDescribe how a push for economic equality might reduce incentives to work and produce output. Then describe how a push for economic inequality might nut have such effects.arrow_forwardWhat is measured on the two axes of a Lorenz curve?arrow_forward
- To reduce income inequality, should the marginal tax rates on the top 1 be increased?arrow_forwardIf a family of three earned 20,000, would they be able to make ends meet given the official poverty threshold?arrow_forwardExplain what the long- and short-term consequences are of not promoting equality or working to reduce poverty.arrow_forward
- What is the difference between poverty and income inequality?arrow_forwardHow does a society or a country make the decision about the tradeoff between equality and economic output? Hint: Think about the political system.arrow_forwardIdentify some public policies that can reduce the level of economic inequality.arrow_forward
- 3. There are three agents, a, b, and c. Person a receives $500 in income, b receives $400, and c gets $100. How much income of the total income does the poorest 1/3 receive? How much does the bottom 2/3 receive? Graph the Lorenz Curve. Calculate area B. Calculate area A. What is the gini coefficient? Use a graph like the one below to draw a picture of the Lorenz curve and help in calculating areas A and B.arrow_forwardAre poverty rates rising or decreasing in the US? How has the gap between the rich and poor increased? references?arrow_forwardThe $1.4 billion trick to make us accept income inequality Lotteries take money from the poor and redistribute it unequally. The poor, the uneducated, and minorities play the lottery the most, and it takes a big chunk of their income Source: The Huffington Post, January 12, 2016 If the news clip is correct, how does a lottery change the distribution of income? Draw two Lorenz curves to illustrate your answer. Lotteries result in the distribution of income Draw the Lorenz curve in a country that does not have lotteries. Label it Before Draw the Lorenz curve for the country after the introduction of lotteries. Label it After >>> To reposition the label click on the cross by the label box and dragging it 100 80 60 40- 20 Cumulative percentage of income 100 20 40 60 00 Cumulative percentage of households >>>Draw only the objects specified in the question Garrow_forward
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