CONNECT F/MICROECONOMICS
21st Edition
ISBN: 2810022151240
Author: McConnell
Publisher: MCG
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Question
Chapter 23, Problem 1RQ
To determine
Relation between the Gini ratio and the distribution of income.
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Which would be evidence of an increase in income inequality over time in the United
States?
O a decrease in the percentage of total personal income received by the highest quintile
O an increase in the percentage of total personal income received by the highest quintile
O an increase in the percentage of total personal income received by the four lowest quintiles
O an increase in the percentage of total personal income received by the lowest quintile
The government announces programs designed to reduce the share of income going to the top quintile from 60% to 20%.
You predict that the most likely result is that:
O mean household income will fall, because the highest income earners will earn less and work less.
median household income will rise, because some of the 40% of redistributed income will be transferred to the third
quintile.
after redistribution, each quintile will receive 20% of total wealth.
O the lowest quintile will receive the 40% taken from the top quintile and switch places.
QUESTION 22
P
COUNTRY 1
25
20
15
10
5
d1 Q
0
0 3 6 9 1215182124
s1
IP
INTERNATIONAL MARKET
25
20-
15
10-
LO
P
5
S2
P
0
0 3 6 9 1215182124Q
25
20-
S1 15
IP
10
D2 5
D1 0
COUNTRY 2
⠀⠀
22. What is the net welfare gain from trade to the economy of country 1? (hint: the formula for calculating the area of a triangle is 1/2 times the base times the height)
a) 3
b) 6
c) 9
d) 13.5
e) 18
s2
IP
d2
0 3 6 9 1215182124Q
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Similar questions
- Assume there are two countries: South Korea and the United States. South Korea grows at 4 and the United States grows at 1. For the sake of simplicity, assume they both start from the same fictional income level, 10,000. What will the incomes of the United States and South Korea he in 20 years? By how many multiples will each countrys income grow in 20 years?arrow_forward%24 A household with income that is two-thirds of the poverty threshold has ratio of income to poverty of O 0.67. O 1.50. O 3.20. O0.23. Unit 7- Chapter 1..xlsx 0Unit 7- Chapter 1..xlsx Topic 2 (2).docx Topic 2 (1).docx 11:07 PM 73 F ENG 自 ins prt sc delete f12 pue LL3 114 SI unu backspace -> bock 7. 5. 55 enter () H. pause * shift ctrlarrow_forwardAs income transfer programs accompanying the War on Poverty increased beginning in the latter half of the 1960s, what happened to poverty in the United States? Check all that apply. O The adjusted poverty rate has declined rapidly and is now less than half of the official poverty rate. O The poverty rate declined substantially in the period before the War on Poverty, but not in the period after the start of the War on Poverty. O In 2018, the adjusted poverty rate was only 4 percentage points lower than the official rate in 1970. O The War on Poverty has been largely ineffective in reducing the rate of poverty in the United States.arrow_forward
- No written by hand solution Suppose there are two sectors, call them A [agriculture] and M [manufacturing]. People earn say $5 an hour in agriculture and $10 an hour in manufacturing. Suppose we are interested in the share of the bottom 40% and the richest 20%. Let x be the share of people in manufacturing. Derive a formula that gives you the shares of income earned by the lowest 40% of the population and the richest 20% of the population as a function of x. This is a connection between structural transformation and the behavior of inequality.arrow_forwardIts on the picturearrow_forwardOnly after When neither country specializes, the total production of cornarrow_forward
- 4. Suppose country A has the following cumulative distribution of income: Cumulative Cumulative Percent of Percent of Families Total Income 20 5 40 15 50 27 60 30 80 50 90 70 95 82 Compute the quintile shares. What is the share of total income of the top 10 percent of families and of the top 5 percent of families?arrow_forwardWhich of the following statements is most inaccurate? O a. Redistribution policies bring about a Pareto improvement in the economy. b. Technology, biology, economic institutions, and people's preferences are all important determinants of economic outcomes. O c. Substantive judgement of fairness involves the evaluation of the final outcome such as freedom or happiness. O d. Procedural judgement of fairness involves the evaluation of the rules and institutions that brought about the final outcome. e. Inequality does not necessarily mean injustice.arrow_forwardSuppose there exist two imaginary countries, Yosemite and Sequoia. Their labor forces are each capable of supplying four million hours per day that can be used to produce pistachios, chinos, or some combination of the two. The following table shows the amount of pistachios or chinos that can be produced by one hour of labor. Country Yosemite Sequoia Pistachios (Pounds per hour of labor) 8 LO 5 Chinos (Pairs per hour of labor) 16 20arrow_forward
- 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. Jarrow_forward1. Try to describe the global economic crisis on world trade and commodity prices because of the COVID and use the Stopler-Samuelson theorem to predict the effect on income distribution in Australia. It should be imagined Australia is a specific factor economy with 'mining' in Queensland and Western Australia on the one hand, and a sector included manufacturing, agriculture and services in the other states. Assume that there is mobile labour between these two sectors, that there is no unemployment, and that Australia is a price taker for its exports.arrow_forwardWhich statement is true? The fewest number of people in the United States are in the middle class. O The least number of people in the United States are in the working class. O The greatest number of people in the United States are in the working class. The largest number of people in the United States are in the middle class.arrow_forward
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