MICROECONOMICS
11th Edition
ISBN: 9781266686764
Author: Colander
Publisher: MCG
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Chapter 18.1, Problem 1Q
To determine
The axis of the Lorenz curve.
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Chapter 18 Solutions
MICROECONOMICS
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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- What is the Lorenz curve and what does it illustrate? Are incomes distributed equally? What would happen if incomes were equal? Why do you think income distribution is so unequal? Identify and explain three reasons.arrow_forwardA Lorenz curve is a graph whose axes measure the: a. total amount of income in dollars on one axis and the total number of individuals or families receiving that income or a lower one on the other. b. percentage of people (10 percent, 20 percent, etc.) on one axis and the percentage of total income received by the lowest 10 percent, the lowest 20 percent, etc., on the other. c. number of individuals or families receiving a certain income on one axis and the percentage of the total population represented by that number on the other. d. number of individuals or families in different occupations on one axis and the median income received in that occupation on the other. e. income classes (e.g., $0 to $1999 and $2000 to $3999) on one axis and the percentage of individuals or families in each such income class on the other.arrow_forward10) What does a Lorenz curve show? Show a Lorenz curve for a country like the USA where there is a difference between income of the population.arrow_forward
- If a country had perfect income equality what would the Lorenz curve look like?arrow_forwardThe graph shows a Lorenz curve for an economy with a total income of 30000; Share of Income A B = C DE I 20% 40% 60% 80% 100% suppose that A=100%, b=48%, c=23%, D=9% and E=2% Percentile How much income is earned by each quintile? (Just enter the number without $ sign) Hint: You know the total income in this economy (30000) you need to use this number in your calculations Quintile 1 (poorest) = type your answer... Quintile 2 = type your answer... type your answer... Quintile 3 Quintile 4 =arrow_forwardBelow is a Lorenz Curve for a given country. Suppose its government establishes a 10% income tax on persons earning more than $500,000/year and uses the proceeds to subsidize secondary education. Show how the tax would affect income inequality by drawing the new Lorenz Curve.arrow_forward
- Using the Lorenz Curve, answer the following questions. . . Approximately what percentage of the income does the richest 20% of Country B earn? Approximately what percentage of the income does the poorest 20% of Country A earn? If the government of Country B decreased the progressivity of income taxes, would its Lorenz Curve move closer to the 45-degree reference line, closer to Country A's Lorenz Curve, or not move at all?arrow_forwardI need help with the first three sections please.arrow_forwardHow comprehensive income is measured according to Haig Simon's definition?arrow_forward
- Answer this question under 100 words and draw a Lorenz graph to explain it. In the Financial Times’ article “How the pandemic is worsening inequality” (31 Dec 2020) we can read: “About 600m people work globally in the hardest-hit sectors such as hospitality and retail [...]. In addition, the informal economy has been hard-hit – and that is where some of the world’s most vulnerable workers are employed. [...] At the height of the pandemic-induced surge in unemployment, joblessness among people aged 15 to 24 in OECD countries was 7.5 percentage points higher than the start of this year, whereas among those aged 25 and over it rose by 3.2 percentage points. Pandemic-induced job losses have potentially long-lasting consequences: people who start their career during a recession experience lower earnings for a decade after graduation. [...] Around the world, relatively privileged workers have avoided the worst of the pandemic’s economic impact. Up to 40 per cent of those in the ILO’s top…arrow_forward1arrow_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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