The following table summarizes the income distribution for the town of Perkopia, which has a population of 10,000 people. Every individual within an income group earns the same income, and the total annual income in the economy is $500,000,000. Suppose that in 2004, the poverty line is set at an annual income of $27,400 for an individual.

The data in the table suggest that there was ....................... income inequality from 1998 to 2016.
Complete the following table to help you determine the poverty rate in Perkopia in 2004. To do this, begin by determining the total income of all individuals in each quintile using the fact that total annual income in the economy is $500,000,000. Next, determine the income of an individual in each quintile by dividing the total income of that quintile by the number of people in that quintile. Finally, determine whether the individual income for each quintile falls below the poverty line of $24,400.

Using the information in the previous table, the poverty rate in Perkopia in 2004 is ............
Suppose that the government introduces a welfare program in which any individual with an Income of less than $27,400 per year receives a lump-sum transfer payment of $10,000 from the government. Assume that, in the short run, there is no change in labor-supply behavior among the people in perrkopia.
In the year 2004, the poverty rate after the introduction of the welfare program in Perkopia is .............
Again, suppose the government introduces a welfare program in which any individual with an Income of less than $27,400 receives a lump-sum transfer payment of $10,000 from the government. Sean, a resident of Perkopia who currently earns an income of $26,942, has the opportunity to work overtime, and earn an additional $1,100 this year.
Which of the following statements are correct? Check all that apply.
€¢ Sean would gain more income by turning down the overtime than he would if he accepted the overtime.
€¢ Sean may accept the overtime if he feels that taking it will increase the chances of his receiving a significant promotion.
€¢ The $10,000 in aid presents a disincentive for Sean to make more than $27,400 per year.

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Share of Total Income in Perkopia (Percent) Middle Quintile Second Quintile Fourth Quintite Lowest Quintile Year Highest Quintile 24.0 1998 5.0 16.0 :1.0 44.0 15.2 2004 48.6 3.8 9.9 22.5 9.2 14.8 22.0 2010 3.5 50.5 2016 53.1 3.2 14.0 8.2 21.5 Share of Income in 2004 (Percent) Total Income (Dollars) Individual Income Quintile (Dollars) Below Poverty Line? Lowest 3.8 Second 9.9 Middle :5.2 Fourth 22.5 Highest 48.6