4)r Consider an economy with 4 individuals: 2 of them are high school graduates and the other 2 individuals are college graduates. Assume that high school graduates earn $3 and $5 per hour while college graduates earn $7 and $9 per hour respectively. If we use variance as a measure of inequality, what is between group inequality, within group inequality and total income inequality in this economy? (Individuals are grouped with respect to their education level) Interpret the results.

4)r Consider an economy with 4 individuals: 2 of them are high school graduates and the other 2 individuals are college graduates. Assume that high school graduates earn $3 and $5 per hour while college graduates earn $7 and $9 per hour respectively. If we use variance as a measure of inequality, what is between group inequality, within group inequality and total income inequality in this economy? (Individuals are grouped with respect to their education level) Interpret the results.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter20: Income Inequality And Poverty

Section: Chapter Questions

Problem 2CQQ

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