Question

The following table summarizes the income distribution for the town of Perkopia, which has a population of 10,000 people. Every individual within an income group earns the same income, and the total annual income in the economy is $500,000,000. Suppose that in 2000, the poverty income threshold, or poverty line, is set at an annual income of $12,700 for an individual Share of Total Income in Perkopia (Percent) Year Lowest Quintile Second Quintile Middle Quintile Fourth Quintile Highest Quintile 1994 2000 2006 2012 8.1 9.0 9.5 10.0 14.0 14.8 15.4 16.5 21.5 22.0 22.7 24.0 53.4 50.8 48.6 45.5 3.0 3.4 4.0 The data in the table suggest that there was ▼ income inequality from 1994 to 2012 Complete the following table to help you determine the poverty rate in Perkopia in 2000. To do this, begin by determining the total income of all individuals in each quintile, using the fact that total annual income in the economy is $500,000,000. Next, determine the income of an individual in each quintile by dividing the total income of that quintile by the number of people in that quintile. (Hint: Recall that Perkopia has a population of 10,000 people.) Finally, determine whether the individual income for each quintile falls below the poverty income threshold, or poverty line, of $12,700

Answer 1

Answer:

A decimal Reason: - Lowest quintile has more share and richest quintile has lessor shore Poverty rate is 20% The Poverty rate, after (8500 + 4000 < 12700) welfare is will 20% 1) maria would gain. True [12199 + 4000 > 12199 + 1500] 2) The $4000 ..... True [From (1)] 3) Maria may.... True [If he gets more than $ 12700 rightarrow 4000 after promotion then way not]