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Income distribution. The government of a small country is planning sweeping changes in the tax structure in order to provide a more equitable distribution of income. The Lorenz curves for the current income distribution and for the projected income distribution after enactment of the tax changes are as follows:
Find the Gini index of income concentration for each Lorenz curve. Will the proposed changes provide a more equitable income distribution? Explain.
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- TABLE 1: An economist at Nedbank ran a study of the relationship between FTSE/JSE All Shares index retu (JALSH) and consumer price index (CPI) from 2006 to 2017, the data collected is shown in the Tal below. FTSE/JSE All Shares index return (JALSH) and consumer price index (CPI) from 2006 to 2017. CPI (X) 4.7 7.1 11.5 7.1 4.3 5.0 5.6 5.7 6.1 4.6 6.4 5.3 Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Question 1 Use Table 1 above to answer this question JALSH (Y) 0.41 0.19 -0.23 0.32 0.19 0.03 0.27 0.21 0.11 0.05 0.00 0.21 Q.1.1 The estimated regression equation with dependent variable FTSE/JSE All Shares index return (JALSH) and independent variable consumer price index (CPI) was Q.1.1.1 Calculate Bo JALSH, =B₁ + B₂CPI¡arrow_forwardThe amount of time adults spend watching television is closely monitored by firms because this helps to determine advertising pricing for commercials. Complete parts (a) through (d). (a) Do you think the variable "weekly time spent watching television" would be normally distributed? If not, what shape would you expect the variable to have? A. The variable "weekly time spent watching television" is likely normally distributed. B. The variable "weekly time spent watching television" is likely skewed right, not normally distributed. C. The variable "weekly time spent watching television" is likely symmetric, but not normally distributed. D. The variable "weekly time spent watching television" is likely skewed left, not normally distributed. E. The variable "weekly time spent watching television" is likely uniform, not normally distributed. (b) According to a certain survey, adults spend 2.35 hours per day watching television on a weekday. Assume that the standard deviation for "time spent…arrow_forwardKeynesian consumption function expresses consumption as a function of disposable income.Specifically, it statesConst = B0 + B1 YDt + Ut,where: Const: aggregate personal consumer expenditures (PCE) in year t.YDt: Disposable income in year t.B1 is called the marginal propensity to consumer (MPC). Economists have found that the value ofMPC differs in the short run and the long run. Economists also found that in the long run the properform of the consumption function is:Const = B1 YDt + utUsing the “Consumption fn Data” file posted on part 2 of this question, estimate the consumption function in theU.S. You need to run two regressions:• Using 1960 to 1980 data (include all 1960 and 1980 data in the regression), estimate theshort run consumption function in the U.S.• Using all the data set, estimate the long run consumption function in the U.S.Part 1 of 2arrow_forward
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- (a) Make a scatter diagram of the data. (b) Use the regression feature of a calculator to find the best-fitting linear function for the data. Graph the function with the data. (c) Repeat part (b) for a cubic function. (d) Estimate the minimum sight distance for a car traveling 68 mph using the functions from parts (b) and (c). (e) By comparing the graphs of the functions in parts (b) and (c) with the data, decide which function best fits the given data.arrow_forwardA perishable dairy product is ordered daily at a particular supermarket. The product costs $1.16 per unit and sells for $1.75 per unit. If units are unsold at the end of the day, the supplier takes them back at a rebate of $1 per unit. Assume that daily demand is approximately normally distributed with = 150 and = 30. (a) What is your recommended daily order quantity for the supermarket? (You may need to use the appropriate appendix table or technology to answer this question. Round your answer to the nearest integer.) Q* = (b) What is the probability that the supermarket will sell all the units it orders? (Round your answer to four decimal places.) P(stockout) = (c) In problems such as these, why would the supplier offer a rebate as high as $1? For example, why not offer a nominal rebate? Find the recommended order quantity at 25¢ per unit. (Round your answer to the nearest integer.) Q* = What happens to the supermarket order quantity as the rebate is reduced? The higher rebate…arrow_forwardinitial Investmen 11. The minimum wage has been rising steadily since 1970. The line y = 0.14x +1.83 models the minimum wage for x years past 1970. and means that for every year past 1970, the a) The slope of this equation is minimum wage has increased b) What was the minimum wage in 1970? c) According to the trend line equation, the minimum wage in 1987 wasarrow_forward
- The amount of time adults spend watching television is closely monitored by firms because this helps to determine advertising pricing for commercials. Complete parts (a) through (d). (a) Do you think the variable "weekly time spent watching television" would be normally distributed? If not, what shape would you expect the variable to have? OA. The variable "weekly time spent watching television" is likely normally distributed. OB. The variable "weekly time spent watching television" is likely uniform, not normally distributed. OC. The variable "weekly time spent watching television" is likely skewed right, not normally distributed. O D. The variable "weekly time spent watching television" is likely skewed left, not normally distributed. O E. The variable "weekly time spent watching television" is likely symmetric, but not normally distributed. C (b) According to a certain survey, adults spend 2.45 hours per day watching television on a weekday. Assume that the standard deviation for…arrow_forwardThe manufacturer's suggested retail price (MSRP) for a particular car is $24,555, and it is expected to be worth $13,459 in 4 years. (a) Find a linear depreciation function for this car. (b) Estimate the value of the car 7 years from now. (c) At what rate is the car depreciating? (a) What is the linear depreciation function for this car? f(x)= (Simplify your answer. Do not include the $ symbol in your answer.) (b) What is the estimated value of the car 7 years from now? $ (c) At what rate is the car depreciating? The car is decreasing in value an average of $ a year.arrow_forward1.2. In order to prepare the dataset for modelling, it became clear that RATIO repeats with similar values. The analyst decided to regard them also as categorical variables. Amend the dataset fully in order to build a regression model. Use an ascending order in the coding structure. 1.3. Show the new amended data set and formulate the regression model that must be estimated. Apply all the changes done to the dataset in Question 1.2 and give the regression function. 1.4. The estimated response function is obtained using the coding structure of Question 1.2. Ŷ = 1.34 + 0.034X₁ + 0.049 X₂ -0.041 X3 + 0.029X4 +0.011 X5 +0.08X6. Explain the regression coefficients b₁, b, and b. 1.5. Find the fitted response function for the rotational METHOD of farming on a farm with RATIO of 0.8. 1.6. Refer to Question 1.5. The analyst has a suspicion that there is interaction between the size and the age of the farm if the method of farming is rotational and the field/land ratio is 0.8. Give the response…arrow_forward
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