Suppose one third of all families on the island of Sophia had zero income in a given year and the other two-thirds had the same positive income. Draw the Sophia Lorenz curve for this island's family income distribution. Also compute the Gini coefficient.

Suppose one third of all families on the island of Sophia had zero income in a given year and the other two-thirds had the same positive income. Draw the Sophia Lorenz curve for this island's family income distribution. Also compute the Gini coefficient.

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter18: Income Distribution And Poverty

Section: Chapter Questions

Problem 1QFR

See similar textbooks

Related questions

Q: Could you answer parts D-F please?

A: Nash equilibrium given to us that: Q*1 = (0.5a - c1)/1.5b Q*2 = (0.5a - c2)/1.5b

Q: Assume a patient has a particular disease. The quality weight (q) associated with the disease is…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: Buying and selling government securities to financial institutions is called: A. Open market…

A: Monetary policy is the policy used by the central bank of the country to control the money supply in…

Q: How can an effective lender of last resort prevent financial panics from developing? Why was the Fed…

A: A lender of last resort (LoLR) is a financial institution that provides liquidity or emergency…

Q: Can you assign numbers to each of these. This is all made up so you can use whatever values they…

A: An extensive-form game is a representation of various factors like the sequencing of the player's…

Q: Mary O’Leary’s company ships fine wool garments from County Cork, Ireland. Five years ago she…

A: EUAC refers to the equivalent uniform annual cost. It is the annual cost incurred by the owner of…

Q: If we assume imperfect asset substitutability, how does a sterilized foreign exchange intervention…

A: Imperfect asset substitutability is a situation in the international market when the central bank of…

Q: Suppose the price elasticity of demand for Valencia face-to-face and online classes is 3.83 and .72…

A: The price elasticity of demand shows the percentage change in quantity due to percentage change in…

Q: Should the government use monetary and fiscal policy in an effort to stabilize the economy? The…

A: Government policy is a declaration of the political initiatives, approaches, and objectives of the…

Q: PROBLEM (4) You have the Cobb-Douglas utility function u(x, y) = xy over apples (x) and plums (y)…

A: To construct a set of feasible set of bundle we need to keep both the budget income and weight…

Q: If a monopolist is producing electricity, then the monopolist will produce a quantity that is _____…

A: A monopolist will produce where MR = MC MR is the marginal revenue and will be defined as the…

Q: If consumers buy more than Q1, but insist on only buying Canadian-made goods, they will consume…

A: We have domestic market of canada. the equilibrium in marker takes place where Demand equals to the…

Q: Kim and Abby are sisters who share a room. Their room can easily get messy, and their parents are…

A: A "prisoner's dilemma" occurs when individuals always have an incentive to make decisions that are…

Q: 1. Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn…

A: Note: You have uploaded two questions at a time. Hence, we shall answer only the first one for you.…

Q: Draw a demand, marginal revenue and marginal cost curve for a monopoly firm. Be sure to label axes…

A: Monopoly usually refers to a market situation in which there is only a single seller/firm that deals…

Q: Benefit–cost analysis requires the monetization of all relevant benefits and costs of a proposed…

A: A technique for calculating the value that a person places on something is called contingent…

Q: Each firm has four alternative strategies, and a certain profit/payoff is associated with each…

A: Given, Two Players : Firm A and Firm BFirm A has four strategies : Increase Advertising, Decrease…

Q: To fight recession, the Fed will: (Select all that apply) A. Buy securities on the open market.…

A: The country's central bank use monetary policy to regulate the amount of money available in the…

Q: Most health-care spending is on hospitals and professional services. Describe the crux of the issue

A: The phrase "health care economics" refers to the many interrelated elements that interact to affect…

Q: Tradavia exports its world-famous giant sausages to Gourmland. If the price of a sausage is 8…

A: Exports are goods and services manufactured in one country and sold to purchasers in another. An…

Q: Would an increase in interest rates make the Shipping using an equation involving interest rates to…

A: Profit : Profit refers to all about that remains after all costs have been paid.These costs include…

Q: Gulliver tells the citizens of Lilliput that in a perfectly competitive market the following…

A: The amount of items that consumers are willing to purchase at a specific price and for a specific…

Q: A profit-maximizing monopolist would earn an economic profit of $ type your answer...

A: A monopoly is a market structure where there is only one firm in the market for a good or service.…

Q: Exercise 3: A perfect competition firm has a demand equaltion of P=8 ($) and total cost equation of…

A: Given: Demand equation: P=8TC=Q2+2Q+4 The TR and the MR equations will be estimated as follows: TR =…

Q: Consider a small town with two competing restaurants: Doug’s Diner and Betty’s Bistro. There is 1000…

A: Nash equilibrium has been attained in the game when no player, not even one who is aware of the…

Q: 10. Questionable business practices according to antitrust agencies Complete the following table by…

A: Price, which represents the value given to a commodity or service, is established by a challenging…

Q: Population Sample 35 30 24 32 32 28 35 34 24 24 26 29 32 35 32 37 35 31 20 Using sample data…

A: Mean is the sum of all observations divided by the total number of observations. The mathematic…

Q: If a bond with a normal value (N) of £100 and a coupon of 2.5% can be bought a a market price (P) of…

A: Given bond value = 100 Euros Counpon rate = 2.5 % = 2.5 % of 100 = 2.5 Euros Market price of bond =…

Q: Define the term "game theory" in context of economics. Can you please provide it in detail.…

A: Game theory refers to a theoretical foundation for conceptualizing social situations with competing…

Q: Company C is planning to undertake a project requiring initial investment of P105 million. The…

A: Payback period shows the time taken to recover the initial investment. The formula used to…

Q: Which one of the following pairs of companies is operating in an oligopoly market? O a. Pepsi and…

A: When there are only a few businesses selling products that may be identical or different, the market…

Q: In 20 years, P1,000,000 is acquired from an investment paying 12% compounded continuously, how much…

A: Present value is the value of investment in today's dollar. Future value is the value of investment…

Q: If the multiplier in a closed economy with government is 2.5 and government spending increases by…

A: Government spending refers to the expenditure taken by the government on developmental and…

Q: Problem II Q1. If adopting a single price strategy (same price to all buyers), what price will be…

A: Monopoly is a type of market when there is just one manufacturer of the good and lots of customers.…

Q: The biological relationship between the growth for the fish population and the size of the fish…

A: The term "sustainability" refers to the process of reaching current objectives without negatively…

Q: If the U.S. Congress passes legislation to raise taxes to control inflation, what kind of policy is…

A: Fiscal policy is the policy used to change the aggregate demand by the change in government spending…

Q: 2. Find the present worth of a future payment of P100,000 to be made in 10 years with an interest…

A: Introduction: Present value: The amount of money that usually should be invested in order to realize…

Q: 6. The level of a consumer's marginal utility for good x is indicated by the equation MUX = 4XY³…

A: A phrase used to assess the value or worth of an item or service is utility.Utility is more exactly…

Q: Differentiate geographical pricing from psychological pricing.

A: Pricing is the process of determining a manufacturer's worth in exchange for their goods and…

Q: When a Mexican company purchases a U.S.-made computer, the Mexican company pays for it with a. U.S.…

A: The US dollar has been used worldwide to facilitate trade. Global trade has been conducted in the…

Q: A price-taking firm's variable cost function is VC = 20³, where Q is its output per week. It has a…

A: A variable cost is a corporate expense that changes with respect to how much an organization…

Q: After careful consideration of the single factor identified in the model above, the researchers were…

A: The regression model analyzes how the independent variable is explained by the independent variable.…

Q: QUESTION 23 In a game, a dominant strategy is O a. a strategy that must appear in every game. b. a…

A: In economics, game theory refers to the study of how the interdependent actions of economic agents…

Q: QUESTION 17 Whenever marginal revenues are higher than marginal costs, a. a firm should stop its…

A: The goal of every successful business is to maximize profits, and this is accomplished through a…

Q: 1. Examples of the principle of diminishing marginal utility include all of the following EXCEPT: A.…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Suppose that one day of labor in each country produces the following quantities of fish and cheese:…

A: Comparative advantage is an economy's ability to produce a specific product or service at a lower…

Q: ATC AVC

A: A monopoly is a market structure where there is only one firm in the market for a good or service.…

Q: The table below shows revenue data for different firms producing airplanes. Use the given…

A: Concentration ratio is used to measure the concentration of market power in the market. The higher…

Q: Define the term "gini index" in the context of economics.

A: A population's income distribution is measured by the Gini index, often known as the Gini…

Q: Direction: Write T if the statement is correct, and F if the statement is incorrect. _____ 7.…

A: introduction International trade as a concept holds great importance in economics. International…

Question

Suppose one third of all families on the island of Sophia had zero income in a given
year and the other two-thirds had the same positive income. Draw the Sophia
Lorenz curve for this island's family income distribution. Also compute the Gini
coefficient.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Drawing a Lorenz curve

VIEW

Finding Gini coefficient

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

What is a "quintile"? Provide and explain one example of how this concept is used in the discussion of income distribution.
A group of 10 golfing buddies have the following annual incomes: Income $32, 000 $12, 000 $56, 000 $120, 000 $10, 000 $38, 000 $70, 000 $16, 000 $20, 000 $24, 000 What is the total amount of income comprising the lowest quintile of this income distribution? Provide your answer below:
Calculate the new Gini Coefficient for Algura when income changes as follows:
A governmental agency determines that the Lorentz curves for the distribution of income for two occupations: dentist and teacher in a certain state are given by the following functions in the picture. For which profession is the distribution of income more fairly distributed.
Suppose a single parent can work up to 16 hours per day at a wage rate of$10 per hour. Various income maintenance programs have been developed to assurea minimum level of income for low-income families. Aid to Families withDependent Children (AFDC) was established with the Social SecurityAct of 1935. The family was given an income subsidy depending on family size. Under this program, the family’s benefi t was reduced by $1 forevery dollar earned. Suppose the maximum daily subsidy for the singleparent described in this problem is $40.a. Draw the daily budget constraint without program participation forthe single parent described in this problem.b. On the same graph, draw the daily budget constraint under AFDC forthe single parent described in this problem.c. What effect does this program have on the incentive to work? Explain.
A group of 10 old college friends have the following annual incomes: Income $32, 000 $12, 000 $56, 000 $120, 000 $10, 000 $38, 000 $70, 000 $16, 000 $20, 000 $24, 000 What is the total income received by the top quintile of this income distribution? Provide your answer below:
A group of 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?
One proposal for reforming the welfare system is to create a negative income tax. Under the negative income tax, each person is entitled to a grant of G dollars permonth. For every dollar the person earns, the grant is reduced by t dollars. a. Suppose G = 200 and t = 0.40. Consider an individual whose hourly wage = $10. There are 30 days in a month, so the total allotment of T = 720. Sketch the budgetconstraint before and after the introduction of the negative income tax. b. Would people work more or less with the implementation of this system? c. What if t = 100%? Explain!
The breakeven level of income is the O Level of income above which a person loses all welfare benefits. O Lowest level of income at which in-kind benefits are no longer necessary. O Amount of income a person must have to reach the poverty line. O Level of income at which an individual household begins to have some discretionary income.
If C=0.8Y, I-bar=260, G-bar=200, TR-bar=150, T=0.2Y, X-bar=320 and M=0.1Y, the equilibrium level of income is 1957 900 1800 1425 414
Explain very briefly what you understand from income effect and substitutioneffects of change in income tax rates
The table below presents the system in the country of Boonton. The numbers indicate the percentage of income in that bracket that is taxed. For example, someone making $13,000 would be taxed 23% of that amount. Income Earned Tax % applied to that Income Under $15,000 23 $15,001 - $30,000 24 $30,001 - $45,000 25 $45,001 - $60,000 27 If a household in Boonton currently makes $20000, how much do they owe in taxes?