b) Suppose one person in a population owns all the income and everyone else has none. Write down the equation of the Lorenz curve L(x) in this case (also known as perfectly unequal distribution).
Q: * 100% Country A Country B Cumulative Share of 100% Polulation The above graphs shows Lorenz curves…
A: A Lorenz curve is a graphical representation of income inequality or wealth inequality created by…
Q: The U.S. poverty rate for African Americans is substantially higher than that for Asians. True or…
A: Poverty refers to the situation of not having enough income of material possession to have a minimum…
Q: If government programs to assist the poor are successful at equalizing the income distribution, then…
A: Both Lorenz curve and Gini coefficient are measures of income inequality. They show income or wealth…
Q: Examine the Lorenz Curves for Japan and Portugal shown in Figure 5. Which of the following…
A: The X axis represents the percentage of households in the society and the Y axis represents the…
Q: Redistribution of income occurs through the federal income tax and government antipoverty programs.…
A: Redistribution of income: It means that the transfer of money from rich people to the people poor…
Q: In the figure above, which of the following is true? a. Distribution OYB is preferred to OZB, b.…
A: The above-mentioned graph is the Lorenz curve which represents the Gini coefficient that is a…
Q: Suppose a Lorenz curve for a particular country is f(x)=x^2for 0≤x≤1. What is the Gini index of…
A: Gini index (GI) can be calculated by using the following formula.
Q: Item#1 Draw the Lorenz curve and compute the Gini index of a group whose incomes are 25, 32, 60, 40,…
A: The provided data set is: 25, 32, 60, 40, 38, 50
Q: You have a very tiny, three person society with the following incomes: 1. 15,000 2. 30,000 3.…
A: No. of Persons Cumulative of persons Cumulative % of person Income Cumulative income Cumulative % of…
Q: Assume that the country has following data: Individual 2: Income Php 400,000; Individual 4: Income…
A: Lorenz Curve Lorenz Curve is a curve which is used to understand the distribution of wealth in a…
Q: The term obtained by dividing the area of inequality shown by a Lorenz curve by the area of the…
A: Gini Coefficient It is the area below the line of perfect equality minus the area below the Lorenz…
Q: Explain the Lorenz Curve.
A: A Lorenz curve may be a graphical representation of income inequality or wealth inequality developed…
Q: ordered from poorest to richest, and Y is the cumulative percentage of income, then equality of…
A: Lorenz curve is used to depict the distribution of income amongst the recipients in the form of a…
Q: A governmental agency determines that the Lorentz curves for the distribution of income for two…
A: The Lorenz curve is a way to measure income inequality. In this method, we arrange individuals of a…
Q: Using the Lorenz Curve, answer the following questions. . . Approximately what percentage of the…
A: A Lorenz curve shows the spread of distribution. It is used to show inequality of distribution. The…
Q: As income transfer programs accompanying the War on Poverty increased beginning in the latter half…
A: Income transfer program gives payment benefits to the people who position below certain level of…
Q: ) If a Lorenz curve is differentiable, the slope of the Lorenz curve can be used to analyse income…
A: A Lorenz curve is a graphical representation of a community's income or wealth distribution.Lorenz…
Q: Lorenz Curve. The income distribution of a certain country is given by 19 f(x) = x² + 1 X. 20 20 а.…
A: * ANSWER :- *(a)
Q: Below is a Lorenz Curve for a given country. Suppose its government establishes a 10% income tax on…
A: A Lorenz curve is a graphical representation of a community's income or wealth distribution.Lorenz…
Q: The area between the Lorenz curve of a country and the diagonal of perfect equality represents: ОА.…
A: In economics, Lorenz curve is an economic measure to graphically represent the inequality among…
Q: A group of 10 people have the following annual incomes: $24, 000, $18, 000, $50, 000, $100, 000,…
A: Solution: Writing the given incomes in increasing order. First quintile 10000 12000 Second…
Q: Below is the Lorenz curve of the country Laurania. Lorenz Curve of Laurania 100 100 Cumulative…
A: Gini coefficient is a measure of income inequality in a country.
Q: By finding the ___________, Gini Coefficient is determined/calculated. a. difference between the…
A: The correct answer is given in the second step.
Q: 100 Percent of Families Refer to the above graph. Venezuela has a very small number of extremely…
A: In US, inequality is greater that is why it is shown by Lorenz curve (C) . In US income difference…
Q: In the Lorenz curve, the final entry in the cumulative income column needs to be 0% 45% 100%…
A: Lorenz curve is a curve of distribution of income with an economy.
Q: The total income generated from all activities b. The degree of inequality in the distribution of…
A: Lorenze curve is the graph that showing percentage of country's income that is earn by a given…
Q: Suppose that the Lorenz Curve for country A is given by YA = x².2 and for country B is yB = 0.3x² +…
A: In this question the Lorentz curve is given for the two different countries, the Lorentz curve…
Q: Q3: Without doing additional calculations, explain what would happen to the shape of the Lorenz…
A: Given that:- Lorenz curve( Grey colored) of 2012 If:- First 15 % people are given cash assistance by…
Q: Below is a Lorenz Curve for a given country. Suppose its government cuts spending on Medicaid,…
A: Lorenz curve: It refers to the curve which shows the income inequality within the economy. It is a…
Q: QUESTION 43 The Gini coefficient can be approximated from the Lorenz curve by the g=A/(A+B), where A…
A: * SOLUTION :-
Q: Examine the Lorenz Curves for Germany and Singapore shown in Figure 5. Which of the following…
A: The Lorenz curve and Ginni coefficient are the measurements of the inequality in an economy. With…
Q: The closer the Lorenz curve for income is to the line of equality, the larger is the nation's total…
A: Lorenz curve is a line which shows income distortion of households which is on x axis and cumulative…
Q: Which of these is true of the Lorenz curve? The further away it is from the 45 degree line the more…
A: The curve that depicts the degree of wealth or income inequality in the economy is being known as…
Q: Q8.4) Formula for Gini Coefficient from Lorenz Curve A / A + B What does the A and B represent?
A: Gini's Coefficient is represented on scale of 0 to 1. It shows the income inequality within the…
Q: A reduction in the redistribution of income: Multiple Choice results in more income inequality.…
A: Inequality refers to the income gap between the people living in a society. One of the measures to…
Q: True or False (and explain): When the Lorenz Curve is a straight diagonal line (at 45 degrees), we…
A:
Q: If an economy has perfect equality (everyone earns the same income), the Lorenz curve for that…
A: Lorenz curve:- A Lorenz curve is a graph the shows the allocation of money or wealth within a…
Q: A Gini coefficient of 0.15 would indicate that a society’s distribution of income is: A.…
A: The Lorenz Curve is a representation of the distribution of a metric – consumption, wages,…
Q: Draw the Lorenz curve and compute the Gini index of a group whose annual incomes (in thousands of…
A: Gini coefficient is a statistical tool to measure income inequality within a nation. Its value…
Q: Use the data from the table below to construct a Lorenz curve. Income Shares in the United States…
A: Cumulative % of income Cumulative %of person 20% 5.2 20% 10.3 20% 15.3 20% 22.4 20&…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
- By finding the ___________, Gini Coefficient is determined/calculated. a. difference between the richest and poorest of the population b. area between a Lorenz curve and the line of absolute equality c. percentage of the population living on more than $1 a day d. proportion of the population with more than a primary education e. percentage of the population living on less than $1 a dayWhich of the following statements regarding the Gini coefficient are correct? A. It is the measure of the average difference in income between every pair of individuals in the population. B. It can be calculated exactly as g=A/(A+B), where A is the area between the Lorenz curve and the 45-degree line, and A + B is the area under the 45-degree line. C. The fraction A/(A+B) is an accurate approximation when the population is small. D. If 50% of a large population owned 2% of the wealth each, then the Gini coefficient equals 0.6.A Gini coefficient of 0.15 would indicate that a society’s distribution of income is: A. PERFECTLY EQUAL B. RELATIVELY EQUAL C. MODERATELY UNEQUAL D. VERY UNEQUAL E. THE MOST UNEQUAL POSSIBLE
- Suppose a Lorenz curve for a particular country is f(x)=x^2for 0≤x≤1. What is the Gini index of income concentration for this country? Give your answer to the nearest integerNo written by hand solution Consider a 100-person economy, where half of the population receives 20% of the total income and the other half the remaining 80%. Using the Lorenz-curve approximation, what is the Gini coefficient in this economy (please use the comma to seprare decimals, such as: x,y)?Suppose that the Gini coefficient for Niger is 0.23 and the Gini coefficient for Canada is 0.34. From this, it is possible to conclude that these countries have…[Select one] different levels of absolute poverty. different Pigou-Dalton transfers. different levels of severe poverty. different Lorenz curves.
- Find the Gini index for the given Lorenz curve. L(x) = 0.7x + 0.3x2The term obtained by dividing the area of inequality shown by a Lorenz curve by the area of the right-triangle formed by the axes and the diagonal (the line of equality).True or false: An increase in the share of income earned by the top half of the income distribution implies that the bottom half’s share and per capita income both decreased. (Be sure to address both “share” and “per capita income.”).
- The Lorenz curve is used to show which of the following? a. The total income generated from all activities b. The degree of inequality in the distribution of income within a country c. The progressivity of the income-tax structure within a country d. The extent of wage differences among workers in similar occupations e. The change in the poverty rate within a country over timeThe 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. f(x) = x2.1 Current Lorenz curve g(x) = 0.6x+0.4x2 Projected Lorenz curve after changes in tax laws Find the Gini index of income concentration for each Lorenz curve. Will the proposed changes provide a more equitable income distribution? Explain. Identify the integrand for the computation of the current and projected Gini indices. The current Gini index is given by 2 ∫ 0 1 ....... dx and the projected Gini index is given by 2 ∫ 0 1 ...... dx.Questions Explain three methods of measuring the income inequality of a nation? 1.kuznet ratio 2. Lorenz curve 3. Gini coefficient As in the case of income distribution, calculation of wealth distribution is done by different entities using different measurements, resulting in a disparity in outcomes. In fact, commonly, wealthis narrowly defined as financial wealth—namely, cash on handand the money value of tangible and nonliquid assets. Even justthe market valuation of financial portfolios is commonly used todefine financial wealth. However, some may extend the definitionto include the value of income streams and insurance rights that,for the most part, cannot be transacted or encumbered. Theseinclude Medicare, Medicaid, and Social Security. When suchtransfers and public assistance are included, the poor and manyelderly could benefit, reducing the wealth disparity (Galbraith2016). To obtain net wealth, the value of the debts are subtractedsubtracted from the value of the assets.…