In this exercise, you will evaluate Lorenz curves, Gini indices, and Social Welfare for a ten person community. I encourage you to solve this problem using a spreadsheet software (i.e. Excel) and submit results by printing to a PDF or taking screenshots.

(a) Plot the Lorenz curves associated with the income distributions D1 = (2,4,6,8,10,12,14,16,18,20) and D2 = (2,3,5,9,11,12,15,17,19,20). Can you identify the more equal of these two distributions based on Lorenz curves alone?

(b) Compute Gini indices for each distribution. Can you identify the more equal distribution based in Gini indices?

(c) For each distribution, evaluate the social welfare functions: W1 = _i Income_i , W2 = _i ln(Income_i), and W3 = min_i(Income_i).

Which income distribution does each function prefer?

please let me know if any clarification needed. Thanks in advance.