Question

1. A group of 10 golfing buddies have the following annual incomes: $32,000, $12,000, $56,000, $120,000, $10,000, $38,000, $70,000, $16,000, $20,000, $24,000. The share of income received by the bottom quintile of this income distribution is ________.

A. 3.5%

B. 7.5%

C. 9.5%

D. 5.5%

2. A source of income inequality is ________.

A. wealth distribution

B. increased demand for low-skilled workers

C. family structure

Answer 1

1.Ans: D) 5.5%

Explanation:

Ascending order of income : $10,000 , $12,000 , $16,000 , $20,000 , $24,000 ,$32,000 , $38,000 , $56,000 , $70,000 and $120,000

The sum of this income = $10,000 +  $12,000 + $16,000 + $20,000 + $24,000 + $32,000 + $38,000 + $56,000 + $70,000 +  $120,000

=$398,000

First quintile is also called bottom quintile ( 0 - 20%)

Bottom quintile = (First or bottom  quintile’s sum / the data-set sum ) * 100

={( 10,000 + 12,000) / 398,000 } *100

= (22,000 / 398,000 ) * 100

=0.0552 * 100

= 5.52 or 5.5 %

2.Ans: A) wealth distribution