PRIN OF MICROECONOMICS
2nd Edition
ISBN: 9780393914085
Author: coppock
Publisher: Norton, W. W. & Company, Inc.
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Question
Chapter 15, Problem 7SP
To determine
Determine the average output.
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Question 9
In Country X there are only two income levels: $10,000 and $40,000. Twenty million individuals earn the
low income and twenty million earn the high income. The Gini coefficient associated with this income
distribution is given by
0.70
0.30
0.35
0.65
Why is income inequality in America so pronounced? Consider education
Outsourcing, immigration, and the gains of the super-rich are the most common reasons for the income inequality in America. Tyler Cowen disagrees: The problem is largely the lack of education. To date, outsourcing is not yet
common enough to have much effect. Immigration doesn't account for much of the change in the wages paid to unskilled workers since 1950. Advances in technology raises the incomes of highly skilled workers. Inequality will be
reduced if more people undertake education.
Source: The New York Times, May 17, 2007
Immigrants to the United States include unskilled workers from Mexico and skilled workers from countries such as India and China. How would each of these types of immigrants influence the personal distribution of income?
Unskilled immigrant workers
and skilled immigrant workers
O A. increase the percentage of total income earned by the poorest 20 percent;
decrease the percentage of total…
Which one of the following is the most likely to be associated with an increase in the incidence of poverty?
A) The Gini coefficient falls substantially.
B) The number of single persons with children and of single pensioners has increased substantially.
C) The real income of those in the top 20% of income earners falls by 10%.
D) The number of people earning below the level of income support has decreased.
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- Indicators of income inequality and poverty Country Gini coefficient Australia Belgium Canada France Italy Japan Portugal Spain .336 259 .324 .293 .337 .329 .353 .317 Ratio of income at 90th percentile to 10th percentile 4.5 3.3 4.2 3.4 4.3 5.0 4.9 4.6 Poverty rates % households below 50% of average household income 14.6 9.4 12.0 7.2 11.4 15.7 11.9 14.0 Source: OECD 2011 The table shows some selected indicators on income inequality and poverty. Based on these data, which of the following statements are correct? Select one or more answers. Select one or more: The Gini coefficient for Canada means the bottom 10% of households have a greater total income than the bottom 10% of households in Italy. France has a lower overall level of income inequality than Japan. The ratio between households at the 90th percentile and households at the 10th percentile suggests inequality is greater in Australia than in Belgium. Spain has a lower poverty rate than Portugal.arrow_forwardThe income distribution for a certain country in 1996 was estimated by the function f(x) = 0.66x2 +0.34x. In 2000 the income distribution was estimated by the function f(x) = 0.3x 0.72x2 -0.02x3 a. Find the coefficient of inequality for each of the years 7. b. Which year had a more equitable income distribution? Why?arrow_forward
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