Question

In country A, the poorest 20% of the population earn 10% of the income and in...

In country A, the poorest 20% of the population earn 10% of the income and in country B the poorest 20% of the population earn 15% of the income. Using what we talked about regarding the Gini coefficient, explain which country most likely has greater income inequality.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Inequaity of income is greater in Country A then Country B

Lorenz Cure and gini Coeffiecnt

Lorenz curve refers to the graphical method that show the representation of detee of income inequality of a country.

It plots te point of cumulative share of income arned by the poorest x% of the population in Y-axis , for all possible values of x. The 45° line shows the line of equality, when income is distribute equally among all individuals. If, income is not distributed equally, then the lower x% of individuals earn < x% of total income in the geographical boundary(Country), this implying that Lorenz curves typically lies below the 45° line.

For any query please comment and please upvote.thank you in advance.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1) Which of the following is true about income inequality? A) Inequality tends to be greatest...
1) Which of the following is true about income inequality? A) Inequality tends to be greatest in the poorest countries. B) Inequality is not an issue for developed countries. C) Inequality tends to get worse as a country develops. D) Inequality tends to diminish as the population increases 2) Poverty is most likely to decrease when A) Population increases regardless of what happens to economic growth. B) GDP increases regardless of what happens to population growth. C) Population growth exceeds...
Consider the following two earnings distributions for two countries (Country A and Country B). a) Calculate...
Consider the following two earnings distributions for two countries (Country A and Country B). a) Calculate the following for each country: i) the variance of earnings ii) the coefficient of variation for earnings iii) the 80-20 ratio iv) the area under the Lorenz Curve for earnings v) the Gini Coefficient for earnings. b) Comparing your answers in part a, which country has greater earnings inequality? Country A Country B Worker Earnings Worker Earnings 1 1 1 1 2 1 2...
The intensified globalization during the last 40 years has not been associated with widening inequality, but...
The intensified globalization during the last 40 years has not been associated with widening inequality, but has instead brought a moderate reduction of global income inequality because, as shown by empirical studies, the ratio of richest to poorest countries has fallen over time. the ratio of richest to poorest countries has not changed. the Gini Coefficient has declined after the 1970s. the Gini Coefficient has risen after the 1970s. Although the term sweatshop has no unique definition, most definitions are...
What are some reasons for income inequality? What can governments do to erode the degree of...
What are some reasons for income inequality? What can governments do to erode the degree of income inequality in Canada? What options can governments choice from related to taxation? What type of tax is likely to help those at the bottom end of the income scale most? Which one is least likely to assist the poorest members of society? Explain fully.
7- Suppose in a given country the population consists of 5 blue people and 5 green...
7- Suppose in a given country the population consists of 5 blue people and 5 green people. Each green person has an income of 1$ per year. Each blue person has an income of $3 per year. a. Draw the Lorenz curve. b. Calculate the Gini coefficient
Suppose there are two countries (a capital-abundant country and a labor-abundant country) and two goods (labor-intensive...
Suppose there are two countries (a capital-abundant country and a labor-abundant country) and two goods (labor-intensive good X and capital-intensive good Y). The two countries have identical demand for the two goods and are considering forming a free trade agreement. However, while this agreement received support from most voters in country A, many voters in country B were concerned that the agreement will likely widen income inequality in country B. Please identify which country is likely labor abundant and which...
1. The country of Dystopia is composed of 500 workers and 100 managers Workers earn $100...
1. The country of Dystopia is composed of 500 workers and 100 managers Workers earn $100 and pay $10 in taxes a day. Managers earn $1,000 a day in salary, bonuses and performance pay. They also own investments that accrue around $300 a day in dividends, interests and capital gains. Managers also pay around $200 a day in taxes. Dystopia provides free health care and housing to all its residents, of $40/day in value Part a) Calculate the net national...
Assume the income tax system for a country follows the basic rules: An individual can earn...
Assume the income tax system for a country follows the basic rules: An individual can earn up to £20,000 tax free, income between £20,000 and £35,000 is taxed at 20% and income over £35,000 is subject to 40% tax. a) Show how this is reflected in the budget line underlying a consumer's labour supply choice. b) Suppose the highest earner earns £50,000. Explain how a zero marginal tax rate applied to income above £50,000 would affect welfare in the population...
The U.S. current account deficit improved slightly from 2007 to 2010 because spending on imports fell...
The U.S. current account deficit improved slightly from 2007 to 2010 because spending on imports fell due to an overall fall in consumption. state, local, and federal government budget deficits increased. worldwide economic growth prompted U.S. exports. capital controls restricted capital inflow. Out of the following activities, which one is the TRUE statement? The free movement of financial capital is desirable for all countries. Foreign direct investment items have more liquidity than foreign portfolio investment items. In most of the...
Question33 Table 30 Country Gini Coefficient* Sweden 0.240 France 0.275 Italy 0.319 United Kingdom 0.324 Portugal...
Question33 Table 30 Country Gini Coefficient* Sweden 0.240 France 0.275 Italy 0.319 United Kingdom 0.324 Portugal 0.375 Latvia 0.387 Refer to Table 30. Which of the following statements is correct? Group of answer choices Portugal has a more equal distribution of income than United Kingdom. France has a more equal distribution of income than Italy. Sweden has the most unequal distribution of income. All of the above are correct. Question 35 Table 36 Quintile Shares of Income by Quintile, 1990...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT