The table below shows the share of income going to each quintile of the income distribution for a nation in 1950 and 2000. Use this data to calculate what the points on a Lorenz curve would be, and sketch the Lorenz curve. The purple line represents 1950. The green line represents 2000. Share of income received 1950 2000 Bottom 20% 10% 5% Bottom 40% 30% 15% Bottom 60% 50% 35% Bottom 80% 75% 60% All 100% |100% 100% Provide your answer below: 110 100 -90 -80 (90, f0) 70 (100, 70) -60 Perfect Equality (100,50) Year 2000 50 (80,50 Year 1950 40 (70, 30) 30 (50, 20) 20 (90, 20) 10 (60, 10) 100 Income Ouintiles 20 40 60 80 Cumulative Share of Income

The table below shows the share of income going to each quintile of the income distribution for a nation in 1950 and 2000. Use this data to calculate what the points on a Lorenz curve would be, and sketch the Lorenz curve. The purple line represents 1950. The green line represents 2000. Share of income received 1950 2000 Bottom 20% 10% 5% Bottom 40% 30% 15% Bottom 60% 50% 35% Bottom 80% 75% 60% All 100% |100% 100% Provide your answer below: 110 100 -90 -80 (90, f0) 70 (100, 70) -60 Perfect Equality (100,50) Year 2000 50 (80,50 Year 1950 40 (70, 30) 30 (50, 20) 20 (90, 20) 10 (60, 10) 100 Income Ouintiles 20 40 60 80 Cumulative Share of Income

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter15: Poverty And Economic Inequality

Section: Chapter Questions

Problem 7SCQ: Table 15.9 shows the share of income going to each quintile of the income distribution for the...

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Table 15.9 shows the share of income going to each quintile of the income distribution for the United Kingdom in 1979 and 1991. Use this data to calculate what the points on a Lorenz curve would be, and sketch the Lorenz curve. How did inequality in the United Kingdom shift over this time period? How can you see the patterns in the quintiles in the Lorenz curves?
What is measured on the two axes of a Lorenz curve?
Using two demand and supply diagrams, one for the low-wage labor market and one for the high-wage labor market, explain how information technology can increase income inequality if it is a complement to high-income workers like salespeople and managers, but a substitute for low-come workers like file clerks and telephone receptionists.
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Describe how a push for economic equality might reduce incentives to work and produce output. Then describe how a push for economic inequality might nut have such effects.
Explain what the long- and short-term consequences are of not promoting equality or working to reduce poverty.
What are some reasons why a certain degree of inequality of income would be expected in a market economy?
A group 0f 10 people have the following annual incomes: 24,000,18,000,50,000,100,000,12,000,36,000,80,000,10,000,24,000,16,000. Calculate the share of total income that each quintile receives from this income distribution. Do the top and bottom quintiles in this distribution have a greater or larger share of total income than the top and bottom quintiles of the U.S. income distribution?