Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
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Question
Chapter 12, Problem 4SQ
To determine
The line of perfect equality.
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Explain the concepts of the ‘Lorenz curve’ and ‘Gini coefficient’. In answering this question, explain the difference between a flatter Lorenz curve and a bent concave Lorenz curve (i.e., pointing to the right of a diagram).
(b) Explain the trade-off between equity and efficiency in the implementation of a poverty reduction policy.
If an economy has perfect equality (everyone earns the same income), the Lorenz curve for that economy will be
Question 21 options:
A horizontal line.
A vertical line.
A diagonal line.
A curved line.
The farther the Lorenz curve from the line of perfect equality, the lower is the income inequality.
True or false?
Chapter 12 Solutions
Economics For Today
Ch. 12.2 - Prob. 1YTECh. 12.2 - Prob. 2YTECh. 12.5 - Prob. 1.1YTECh. 12.5 - Prob. 2.1YTECh. 12 - Prob. 1SQPCh. 12 - Prob. 2SQPCh. 12 - Prob. 3SQPCh. 12 - Prob. 4SQPCh. 12 - Prob. 5SQPCh. 12 - Prob. 6SQP
Ch. 12 - Prob. 7SQPCh. 12 - Prob. 8SQPCh. 12 - Prob. 9SQPCh. 12 - Prob. 10SQPCh. 12 - Prob. 11SQPCh. 12 - Prob. 1SQCh. 12 - Prob. 2SQCh. 12 - Prob. 3SQCh. 12 - Prob. 4SQCh. 12 - Prob. 5SQCh. 12 - Prob. 6SQCh. 12 - Prob. 7SQCh. 12 - Prob. 8SQCh. 12 - Prob. 9SQCh. 12 - Prob. 10SQCh. 12 - Prob. 11SQCh. 12 - Prob. 12SQCh. 12 - Prob. 13SQCh. 12 - Prob. 14SQCh. 12 - Prob. 15SQCh. 12 - Prob. 16SQCh. 12 - Prob. 17SQCh. 12 - Prob. 18SQCh. 12 - Prob. 19SQCh. 12 - Prob. 20SQ
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Similar questions
- If a country had perfect income equality what would the Lorenz curve look like?arrow_forwardTable 15.9 shows the share of income going to each quintile of the income distribution for the United Kingdom in 1979 and 1991. Use this data to calculate what the points on a Lorenz curve would be, and sketch the Lorenz curve. How did inequality in the United Kingdom shift over this time period? How can you see the patterns in the quintiles in the Lorenz curves?arrow_forwardRedistribution of income occurs through the federal income tax and government antipoverty programs. Explain whether or not this level of redistribution is appropriate and whether more redistribution should occur.arrow_forward
- To reduce income inequality, should the marginal tax rates on the top 1 be increased?arrow_forwardDescribe how a push for economic equality might reduce incentives to work and produce output. Then describe how a push for economic inequality might nut have such effects.arrow_forwardExplain a situation using the supply and demand for skilled labor 111 which the increased number of college graduates leads to depressed wages. Given the rising cost of going to college, explain why a college education will or will not increase income inequality.arrow_forward
- The Lorenz curve demonstrates inequality visually, in that the _______ linear the curve, the _______ inequality exists. Multiple Choice more; less more; more less; less None of these are true.arrow_forward1. When Lorenz curves are __________. a. more curved the greater is the degree of income inequality b. less curved the greater is the degree of income inequality c. used in calculating Gini coefficients d. first and third option are correct 2. As the Lorenz Curve gets closer to the line of absolute equality, the ________. a. the higher is the degree of income equality b. the lower is the degree of income inequality c. the lower is the degree of income equality d. the higher is the degree of income inequalityarrow_forwardAs the Lorenz Curve gets closer to the line of absolute equality, the ________. a. the higher is the degree of income equality b. the lower is the degree of income inequality c. the lower is the degree of income equality d. the higher is the degree of income inequalityarrow_forward
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