Income Distribution
Review Problems
Problem : If there are only five people in a certain economy, and their weekly paychecks are $100, $300, $600, $1000, and $1600, what is the cumulative percentage of income generated by the bottom 60% of wage earners?
Problem : How is the Lorenz curve used to generate a numerical representation of income inequality?
Problem : If the area between an economy's Lorenz curve and the straight-line equal distribution curve is 2 units, and the area beneath the Lorenz curve is 4 units, what is the Gini coefficient for this economy?
Problem : Why does an economy with a higher Gini coefficient have a less equal income distribution?
