Economics (MindTap Course List)
Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 28, Problem 1WNG
To determine

Draw a Lorenz curve.

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The table shows after-tax income shares in Canada in 1986 and 2015. After-tax income After-tax income 1986 2015 (percent of total) Households Lowest 20 percent Second 20 percent Middle 20 percent Fourth 20 percent Highest 20 percent 5 11 18 25 41 7 13 18 23 39 Draw a point to show the income earned by the lowest 20 percent of households in 1986. Draw a point to show the income earned by the lowest 60 percent of households in 1986. Draw a Lorenz curve that is consistent with the two points you've plotted. Canadian after-tax income is distributed equally in 2015 than in 1986. 100- 90- 80- 70- 60+ 50- 40- 30+ 20- 10- 04 Cumulative percentage of income 10 20 30 40 50 60 70 80 90 100 Cumulative percentage of households >>> Draw only the objects specified in the question.
Below is a Lorenz Curve for a given country.  Suppose its government cuts spending on Medicaid, Supplemental Nutrition Assistance Program and other aids to the poor.  Show how the spending cuts would affect income inequality by drawing the new Lorenz Curve.
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. 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 G
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