ECON MICRO (with MindTap, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
6th Edition
ISBN: 9781337408059
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 18, Problem 6P
To determine
The method for the official poverty level as calculated by the U.S. Department of Agriculture and the government assistance programs that the Census Bureau considers or ignores when calculating household income
Concept Introduction:
Official Poverty Level – It is an economic measure to find out whether the family or individual with certain income level qualifies for government assistance.
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economic
1. Income inequality and the poverty rate
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 earns the same income, and the total annual income in the economy is $500,000,000. Suppose that in 2012, the poverty line is set at
an annual income of $40,850 for an individual.
Year
1994
2000
2006
2012
Lowest Quintile
4.0
3.8
3.4
3.0
Share of Total Income in Perkopia
(Percent)
Middle Quintile Fourth Quintile
Second Quintile
10.0
9.7
8.8
8.2
The data in the table suggest that there was
16.5
15.0
14.8
14.0
23.0
22.5
22.0
21.8
Highest Quintile
46.5
49.0
51.0
53.0
income inequality from 1994 to 2012.
Complete the following table to help you determine the poverty rate in Perkopia in 2012. To do this, begin by determining the total income of all
individuals in each quintile using the fact that total annual income in the economy is $500,000,000. Next, determine the income of an individual…
5
Chapter 18 Solutions
ECON MICRO (with MindTap, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
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Similar questions
- 32arrow_forwardQuestion 15 Which of the below statements is INCORRECT with regard to poverty in the U.S.? The poverty threshold was created my Mollie Orshansky of the Social Security Administration, in the 1960s. The "poverty threshold," "poverty guidelines" and "poverty line" are identical numbers and are all used for exactly the same purpose. For the year 2021, a single individual making less than $12,880 in any of the 48 contiguous states, falls below the poverty line. For the year 2021, a four person family making less that $29,200 a year in any of the 48 contiguous states, falls below the poverty line.arrow_forwardurgentarrow_forward
- 10arrow_forwardAll of the following are sources of inequality in the distribution of personal income EXCEPT a. progressive income taxes b. discrimination in employment c. differences in personal motivation d. differences in educational level attained e. differences in abilitiesarrow_forwardAccess to Education and Poverty: 2005 Data FIGURE 2 College completion by income status and 8th grade test scores A top-scoring, low-income student has about the same chance of completing college as a low-scoring, high-Income student Percent completing college 80% 74% 70% Low score Middle score 60% High score 51% 50% 47% 40% 306 30% 2996 21% 20 10% 8% 396 Middle Income High Income Low Income Note: Low income is defined as the bottom 25%, middle income middle 50 and high income is top 25%. Source: Ehse Gould, "High-scoring, low-income students no more ikely to complete college than lowscoring, rich students,I *The Economik Policy tnstitute Biog, March 9, 2012. available at http//www.epi.org/blog/college graduation-scores-income levels/. See also Mary Ann Fox, Brooke A. Connolly, and Thomas D. $nyder, "Youth tndicators 2005: Trends in the Well-Being of American Youth." (Washington, DC US. Department of Education, 2005). * YouTube Q 3 4:41 / 5:01 CC According to a 2005 U.S. Department of…arrow_forward
- 1. Income inequality and the poverty rate 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 earns the same income, and the total annual income in the economy is $500,000,000. Suppose that in 2007, the poverty line is set at an annual income of $42,350 for an individual. Year Lowest Quintile Second Quintile 2001 2007 2013 2019 3.0 3.4 3.8 5.0 Share of Total Income in Perkopia (Percent) 8.6 9.4 9.7 11.0 The data in the table suggest that there was Middle Quintile Fourth Quintile 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 2001 to 2019. MacBook Pro Complete the following table to help you determine the poverty rate in Perkopia in 2007. To do this, begin by determining the total income of all individuals in each quintile using the fact that total annual income in the economy is $500,000,000. Next, determine the income of an…arrow_forwardQuestion 2 Consider an 8 person economy with the following income distribution: (.6,.6,.8,.8,2,2,6,6) The poverty line is 1 Calculate the level of poverty using P2 of the Foster-Greer-Thorbecke (FGT) Index.arrow_forwardWhat is net factor income from Abroad(NIFA).arrow_forward
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