In a certain country, the population consists of five blue people and five green people. Each...
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In a certain country, the population consists of five blue people and five green people. Each green person has an income of $2 per year. Each blue person has an income of $6 per year. a. Draw the Lorenz Curve for this country. b. On your diagram from Part a, indicate clearly which area you would divide by which other area to calculate the Gini Coefficient. C. Calculate the Gini Coefficient. Show your work. d. (Difficult) Consider a country with only two groups: the Poor and the Rich. The poor are x% of the population and rich are (1-x)% of the population. The poor earn y% of the country's total income. The rich earn (1-y)% of the country's total income. An economist said: "The Gini Coefficient of this country is: (x - y)." Is the economist correct? Explain. In a certain country, the population consists of five blue people and five green people. Each green person has an income of $2 per year. Each blue person has an income of $6 per year. a. Draw the Lorenz Curve for this country. b. On your diagram from Part a, indicate clearly which area you would divide by which other area to calculate the Gini Coefficient. C. Calculate the Gini Coefficient. Show your work. d. (Difficult) Consider a country with only two groups: the Poor and the Rich. The poor are x% of the population and rich are (1-x)% of the population. The poor earn y% of the country's total income. The rich earn (1-y)% of the country's total income. An economist said: "The Gini Coefficient of this country is: (x - y)." Is the economist correct? Explain.
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Answer rating: 100% (QA)
ANSWER Lorenz Curve for Income Distribution Heres how we can describe the Lorenz Curve and calculate the Gini Coefficient without an actual graph a Lo... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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