Q3: Without doing additional calculations, explainwhat would happen to the shape of the Lorenz curveand inequality in 2012 if households in and below the15th percentile received cash transfers from thegovernment. 1201008060402020406080100120Share of Pd Horizontal (Value) AxisPerfect equality line- Cumulative share of income in 2011 (%)- Cumulative share of income in 2012 (%)Cumulitive Share of Income

Given that:- Lorenz curve( Grey colored) of 2012 If:- First 15 % people are given cash assistance by…

Q3: Without doing additional calculations, explain what would happen to the shape of the Lorenz curve and inequality in 2012 if households in and below the 15th percentile received cash transfers from the government.

Q3: Without doing additional calculations, explain what would happen to the shape of the Lorenz curve and inequality in 2012 if households in and below the 15th percentile received cash transfers from the government.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter17: Income, Poverty, And Health Care

Section: Chapter Questions

Problem 2P

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Question

Q3: Without doing additional calculations, explain
what would happen to the shape of the Lorenz curve
and inequality in 2012 if households in and below the
15th percentile received cash transfers from the
government.

120
100
80
60
40
20
20
40
60
80
100
120
Share of Pd Horizontal (Value) Axis
Perfect equality line
- Cumulative share of income in 2011 (%)
- Cumulative share of income in 2012 (%)
Cumulitive Share of Income

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