2) Table 1 below gives information regarding the distribution of household income in Wakanda, a small...

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2) Table 1 below gives information regarding the distribution of household income in Wakanda, a small nation with 100 inhabitants. Households grouped by income Table 1: Household income Percentage of total national income Lowest 20% Second lowest % Middle 20% Second highest 20% Highest 20% Total national income Group income in Wakandan Dollar 200.000 300.000 500.000 1.000.000 2.000.000 Cumulative percentage a) Copy and complete the table. [10 marks] b) Based on Table 1, plot the Lorenz curve for Wakanda. [10 marks] 3a) The government of Wakanda imposes a progressive income tax. Only those in the highest 20 percent income bracket pay the tax, and they must pay 30 percent of their income. From the tax receipts, the government gives 1/3 to the lowest 20 percent group, 1/3 to the next lowest, and 1/3 to the next lowest (the middle 20 percent group). If none of the groups in the economy change their behavior so that their incomes remain the same as those in Table 1 copy and complete Table 2 for the post-tax, post- transfer income distribution. [10 marks] 2) Table 1 below gives information regarding the distribution of household income in Wakanda, a small nation with 100 inhabitants. Households grouped by income Table 1: Household income Percentage of total national income Lowest 20% Second lowest % Middle 20% Second highest 20% Highest 20% Total national income Group income in Wakandan Dollar 200.000 300.000 500.000 1.000.000 2.000.000 Cumulative percentage a) Copy and complete the table. [10 marks] b) Based on Table 1, plot the Lorenz curve for Wakanda. [10 marks] 3a) The government of Wakanda imposes a progressive income tax. Only those in the highest 20 percent income bracket pay the tax, and they must pay 30 percent of their income. From the tax receipts, the government gives 1/3 to the lowest 20 percent group, 1/3 to the next lowest, and 1/3 to the next lowest (the middle 20 percent group). If none of the groups in the economy change their behavior so that their incomes remain the same as those in Table 1 copy and complete Table 2 for the post-tax, post- transfer income distribution. [10 marks]

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a Completing Table 1 Table 1 Household income Households grouped by income Group Income in Wakandan ... View the full answer