Suppose a hypothetical economy consists of 20 nonunionized private sector workers who have the following annual earnings: $18,000, $9,000, $82,000, $12,000, $13,000, $76,000, $61,000, $14,000, $22,000, $23,000, $21,000, $46,000, $59,000, $26,000, $27,000, $37,000, $6,000, $41,000, $3,000, and $24,000.
a. Using annual earnings ranges of $10,000 (that is, 0 $10,000, $10,000–$20,000, and so forth), construct a histogram (absolute frequency distribution) of this economy’s distribution of personal earnings. What is the mode of the histogram? What is the average (mean) level of earnings? What is the median level of earnings? Characterize the distribution as being normal, skewed leftward, or skewed rightward. Explain.
b. Construct a Lorenz curve showing the quintile distribution of earnings for this economy.