Microeconomics (MindTap Course List)
10th Edition
ISBN: 9781285859484
Author: William Boyes, Michael Melvin
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 19, Problem 14E
To determine
To explain:
The relationship between the Lorenz curve and Gini coefficient.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
What is the relation between Health and Inequality?
The data in the table below shows the income of some random people in Massachusetts. If these were the only people in
Massachusetts what is the average (absolute) difference in income among all the pairs?
nаme
Pre-tax income
Mayor Wu
$20
Tom Brady
$120
Matt Damon
$60
QUESTION 12
(continued) What is the Gini coefficient for Massachusetts?
What is the relationship between health and health economics?
Chapter 19 Solutions
Microeconomics (MindTap Course List)
Knowledge Booster
Similar questions
- Refer to the graph to answer this question. Explain the Lorenz Curve.arrow_forwardConsider an illustrative economy with the following five incomes: {10, 15, 25, 45, 50}. Calculate the Gini coefficient. Construct a table with the values for the Lorenz curve (use 20%, 40%, 60%, 80%, 100% thresholds)arrow_forwardIn the below graph, the white area in the upper left hand side represents 50% of the total area of the rectangle, the shaded area represents 27% of the area of the rectangle, and the white area in the lower right hand side represents 23% of the area in the rectangle. Based on this information, what is the Gini coefficient? Show your work.arrow_forward
- What are the purpose of individual enterepreneur? What are the few advantage or merits of individual enterepreneur?arrow_forwardAnswer this question under 100 words and draw a Lorenz graph to explain it. In the Financial Times’ article “How the pandemic is worsening inequality” (31 Dec 2020) we can read: “About 600m people work globally in the hardest-hit sectors such as hospitality and retail [...]. In addition, the informal economy has been hard-hit – and that is where some of the world’s most vulnerable workers are employed. [...] At the height of the pandemic-induced surge in unemployment, joblessness among people aged 15 to 24 in OECD countries was 7.5 percentage points higher than the start of this year, whereas among those aged 25 and over it rose by 3.2 percentage points. Pandemic-induced job losses have potentially long-lasting consequences: people who start their career during a recession experience lower earnings for a decade after graduation. [...] Around the world, relatively privileged workers have avoided the worst of the pandemic’s economic impact. Up to 40 per cent of those in the ILO’s top…arrow_forwardHow is the social status and income of a consumer predisposes an individual to better health? (please do not copy answers on the internet, thank you)arrow_forward
- a) With the following data draw a Lorenz Curve, putting labels on the graph and writing out data point values. Explain what the Lorenz Curve illustrates, and what the results mean. b) Now explain how one gets the Gini Coefficient from the Lorenz Curve, and what information the coefficient provides.arrow_forward5- Calculate Gini coefficient for a country with the following deciles in income share data: Country X: 30 (richest quantile) 20 What is the area under the Lorenz Curve? Please show your diagram. 10 5 5 5 5 3 2arrow_forward2.1 In an effort to make the distribution of income more nearly equal, the government of a country passes a tax law that changes the Lorenz curve from y = 0.97x for one year to y = 0.33x + 0.67x for the next year. Find the Gini coefficient of income for both years. (Round your answers to three decimal places.) before after Compare the distributions of income before and after the tax law was passed. Interpret the result. O The change increases the difference in incomes. The change makes no difference in incomes. O There is not enough information to compare the incomes. The change decreases the difference in incomes. O The change makes the incomes equal. Need Help? Read Itarrow_forward
- Medicare recipients can purchase supplemental private insurance (known as Medigap insurance) to fill the gap in coverage left by Medicare. This gap includes copayments, deductibles, and prescription drug expenses not covered by Medicare. Several years ago, the government enacted regulations that specify minimum standards for items that Medigap policies must cover. This made the policies more expensive, and as a consequence, about 25 percent of the elderly who would have purchased some Medi-gap insurance purchased none at all [Finkelstein, 2004]. Consider an individual who consumes two goods, "insurance" and "all other goods." The cost of a unit of Medigap insurance is $1, as is the cost of a unit of all other goods. Sketch a budget constraint and set of indifference curves that are consistent with the following scenario: In an unregulated market, an individual with a $30,000 income purchases $5,000 worth of Medigap insurance. The government then puts mandates on Medigap policies that…arrow_forwardWhich theory explains the effect of health on income? Direct income theory Efficient producer theory Productive time theory Allostatic load theoryarrow_forwardDescribe how to calculate a Gini coefficient.arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc