EBK FOUNDATIONS OF ECONOMICS
8th Edition
ISBN: 8220103632225
Author: PARKIN
Publisher: PEARSON
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Chapter 20, Problem 9SPPA
To determine
Degree of income inequality.
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2. Constructing a Lorenz curve from income shares data
The following table shows the approximate income distribution for Colombia, Ukraine, and Turkey in 2011. In particular, it shows the income shares of
each quintile of the income distribution.
Income Group
Lowest quintile
Second quintile
Third quintile
Fourth quintile
Highest quintile
Percentage of Total Income, 2011
Turkey
Colombia Ukraine
2
9
5
6
14
10
17
14
21
50
18
63
22
38
has the most total income.
On the following graph, plot the Lorenz curves for the three countries. Plot Colombia's Lorenz curve using the green points (triangle symbol), Ukraine's
Lorenz curve using the blue points (circle symbol), and Turkey's Lorenz curve using the purple points (diamond symbol)
Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.
What is the difference between income inequality and wealth inequality? Can a household with a high income have a low amount of wealth and vice versa? How?
Chapter 20 Solutions
EBK FOUNDATIONS OF ECONOMICS
Ch. 20 - Prob. 1SPPACh. 20 - Prob. 2SPPACh. 20 - Prob. 3SPPACh. 20 - Prob. 4SPPACh. 20 - Prob. 5SPPACh. 20 - Prob. 6SPPACh. 20 - Prob. 7SPPACh. 20 - Prob. 8SPPACh. 20 - Prob. 9SPPACh. 20 - Prob. 1IAPA
Ch. 20 - Prob. 2IAPACh. 20 - Prob. 3IAPACh. 20 - Prob. 4IAPACh. 20 - Prob. 5IAPACh. 20 - Prob. 6IAPACh. 20 - Prob. 7IAPACh. 20 - Prob. 8IAPACh. 20 - Prob. 9IAPACh. 20 - Prob. 10IAPACh. 20 - Prob. 11IAPACh. 20 - Prob. 1MCQCh. 20 - Prob. 2MCQCh. 20 - Prob. 3MCQCh. 20 - Prob. 4MCQCh. 20 - Prob. 5MCQCh. 20 - Prob. 6MCQCh. 20 - Prob. 7MCQ
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Similar questions
- What goods and services would you include in an estimate of the basic necessities for a family of four?arrow_forwardWho is included in the top income quintile?arrow_forwardWhy is there reluctance on the part of some in the United States to redistribute income so that greater equality can be achieved?arrow_forward
- Using two demand and supply diagrams, one for the low-wage labor market and one for the high-wage labor market, explain how information technology can increase income inequality if it is a complement to high-income workers like salespeople and managers, but a substitute for low-come workers like file clerks and telephone receptionists.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_forwardSuppose each family in the United States earned an equal money income. What would be the effect?arrow_forward
- Discuss income inequality, measurement and causes.arrow_forwardBriefly discuss the major causes of income inequality. What factors have contributed to greater income inequality since 1970?arrow_forwardWhat does the following measure? The percentage of people with an income below a certain level? O Income inequality Wealth inequality O The Gini index The poverty ratearrow_forward
- What is the difference between income inequality and wealth inequality? Why does this matter?arrow_forwardThe following table shows the approximate income distribution for Peru, Bulgaria, and Lithuania in 2016. In particular, it shows the income shares of each fifth of the income distribution. Percentage Share, 2016 Percentage of Families Peru Bulgaria Lithuania Lowest fifth 4 9 7 Second-lowest fifth 8 14 12 Middle fifth 12 17 16 Second-highest fifth Highest fifth 20 22 22 56 38 43 has the most total income. On the following graph, plot the Lorenz curves for the three countries. Plot Peru's Lorenz curve using the green points (triangle symbol), Bulgaria's Lorenz curve using the blue points (circle symbol), and Lithuania's Lorenz curve using the purple points (diamond symbol). Be sure to plot the first point of each Lorenz curve at (0,0). Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. CUMULATIVE PERCENTAGE OF MONEY INCOME graph.) 20 100 20 40 60 80 100 CUMULATIVE PERCENTAGE OF FAMILIES Peru Bulgaria Lithuania…arrow_forward2. Constructing a Lorenz curve from income shares data The following table shows the approximate income distribution for Peru, Bulgaria, and Lithuania in 2016. In particular, it shows the income shares of each fifth of the income distribution. Percentage Share, 2016 Percentage of Families Peru Bulgaria Lithuania Lowest fifth 4 9 7 Second-lowest fifth 8 14 12 Middle fifth 12 17 16 Second-highest fifth Highest fifth 20 22 22 56 38 43 has the most total income. On the following graph, plot the Lorenz curves for the three countries. Plot Peru's Lorenz curve using the green points (triangle symbol), Bulgaria's Lorenz curve using the blue points (circle symbol), and Lithuania's Lorenz curve using the purple points (diamond symbol). Be sure to plot the first point of each Lorenz curve at (0,0). Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. CUMULATIVE PERCENTAGE OF MONEY INCOME graph.) 100 20 40 60 80 100…arrow_forward
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