a)
The farther the Lorenz curve moves away from the perfect equality line the more is the inequality.
Higher number will show more inequality.
b)
The area below the line of equality=0.5
Gini coefficient = ( area between line of perfect equality and the lorenz curve ) ÷ (area below line of equality)
Gini coefficient ranges from zero to one where zero means no inequality and one means perfect inequality
So the higher the number more will be the inequality
1) Figure 2 below is an image of a Lorenz curve. a. (4) When the Lorenz...
1) Figure 2 below is an image of a Lorenz curve. a. (4) When the Lorenz curve sags lower, does that mean the economy is more equal or more unequal? b. (6) Explain how to use the information in Figure 2 to calculate the Gini coefficient. i. What is the typical range for Gini coefficients? ii. What does a high number indicate? 100 Perfect Equality Line Percentage of Income Lorenz Curve 100 Percentage of Population Figure 2 2) (10) Describe...
1) Figure 2 below is an image of a Lorenz curve. a. (4) When the Lorenz curve sags lower, does that mean the economy is more equal or more unequal? b. (6) Explain how to use the information in Figure 2 to calculate the Gini coefficient 1. What is the typical range for Gini coefficients? ii. What does a high number indicate? 100 Perfect Equality Line Percentage of income Lorenz Curve 100 Percentage of Population Figure 2 2) (10) Describe...
Problem 4 Economic Inequality (20 points) 1) Figure 2 below is an image of a Lorenz curve. a. (4) When the Lorenz curve sags lower, does that mean the economy is more equal or more unequal? b. (6) Explain how to use the information in Figure 2 to calculate the Gini coefficient. i. What is the typical range for Gini coefficients? ii. What does a high number indicate? 100 Perfect Equality Line Percentage of Income Lorenz Curve Percentage of Population...
1) Figure 2 below is an image of a Lorenz curve. a. When the Lorenz curve sags lower, does that mean the economy is more equal or more unequal? b. Explain how to use the information in Figure 2 to calculate the Gini coefficient. i. What is the typical range for Gini coefficients? ii. What does a high number indicate? 2) (10) Describe the inequality in income and wealth between countries, and explain whether each has grown or shrank over the past 50 years. Why...
Problem 4 Economic Inequality (20 points) 1) Figure 2 below is an image of a Lorenz curve. a. (4) When the Lorenz curve sags lower, does that mean the economy is more equal or more unequal? b. (6) Explain how to use the information in Figure 2 to calculate the Gini coefficient. i. What is the typical range for Gini coefficients? ii. What does a high number indicate? Figure 2 2) (10) Describe the inequality in income and wealth between...
Problem 4 Economic Inequality (20 points) 1) Figure 2 below is an image of a Lorenz curve. a. (4) When the Lorenz curve sags lower, does that mean the economy is more equal or more unequal? b. (6) Explain how to use the information in Figure 2 to calculate the Gini coefficient i. What is the typical range for Gini coefficients? ii. What does a high number indicate? 100 Perfect Equality Line Percentage of income Lorenz Curve 100 Percentage of...
I need help with this question please! - 4 marks) In economics, a population's Lorenz curve L(2) gives the percentage (as a decimal) of the country's distribution of wealth among the lowest earning percentage 2 (as a decimal between 0 and 1; e.g., 35% means x = 0.35) of the population. As an example, if L(0.4) = 0.1, then this means that the lowest earning 40% of households have only 10% of the entire economy's wealth. The line y =...
QUESTION 1 Between 1774 and 1973, the distribution of wealth in the United States became more equal as measured by the Gini coefficient slightly more unequal as measured by the Gini coefficient perfectly unequal perfectly equal QUESTION 2 When the Gini coefficient increases, income inequality increases income equality increases the slope of the Lorenz curve increases everyone is made better off QUESTION 3 An income distribution becomes more unequal as the Lorenz curve moves toward the bottom right corner of...
1. What is the environmental Kuznets curve? What factors may make it reasonable? In what cases does it seem incredible? 2. What is the relationship between a Lorenz curve and a Gini coefficient? Give some examples of how Lorenz curves and Gini coefficients can be used as summary measures of equality and inequality in a nation’s distribution of income.
You learned that a Lorenz Curve shows the cumulative share of population on the horizontal axis and the cumulative percentage of total income received on the vertical axis. Based on the figure below answer the following: a) What the perfect equality line means? b) What do 1980 and 2011 Lorenz Curves tell us regarding the evolution of the US income distribution? JUSTIFY your answer! 100% 80% Perfect equality 60% Cumulative Share of Income 40% 1980 20% 2011 0 0 100...