Draw a Lorenz curve diagram representing the cumulative share of income as a function of the...

Draw a Lorenz curve diagram representing the cumulative share of income as a function of the cumulative share of the population from the lowest to the highest individual income level. Explain how economic inequality using the Gini coefficient can be illustrated using this diagram. What would you expect the impact on inequality of the decrease in productivity to be? Illustrate using the Lorenz curve and explain.

Expert Solution

lorenz curve is a graphical representation of income in the economy. it was developed by Max.O Lorenz in 1905 for representation of wealth distribution.

Rahul Sunny answered 2 years ago

1. Quadratic Lorenz Curve. Suppose the cumulative income distribution is given by x^2 , where 0...

1. Quadratic Lorenz Curve. Suppose the cumulative income distribution is given by x^2 , where 0 ≤ x ≤ 1, that represents the Lorenz curve of an economy. What is the Gini coefficient? Graph your results. For your information, the area under the Lorenz curve x^2 from 0 to 1 is 1/3 .

1. A Lorenz curve measures the ___ on the vertical axis. A) cumulative percentage of families...

1. A Lorenz curve measures the ___ on the vertical axis. A) cumulative percentage of families B) demand of families on welfare C) cumulative percentage of money income D) cumulative percentage of family wealth 2. A Lorenz curve that is perfectly straight indicates A) that a small portion of the population accounts for most of the income. B) that society is very rich. C) that a large portion of the population accounts for most of the income. D) complete income...

Depict the income data on a Lorenz curve for country A Depict the income data on...

Depict the income data on a Lorenz curve for country A Depict the income data on a Lorenz curve for country B Find the Gini-coefficient index for country A Find the Gini-Coefficient index for country B Interpret the index value INCOME POPULATION COUNTRY A POPULATION COUNTRY B 10000 1000 4000 20000 5000 5000 30000 4000 6000 40000 12000 6500 50000 10000 5200 60000 6000 4600 70000 4500 5200 80000 3500 6500 90000 2500 3400 100000 1500 3600

On a separate sheet of paper, draw a Lorenz Curve for the United States, using the...

On a separate sheet of paper, draw a Lorenz Curve for the United States, using the 2017 values for income quintiles. Label each kink point carefully, and draw the diagonal equality Lorenz Curve. Calculate the Gini Coefficient, and show your work. This is a long and tedious math problem, where you find the areas of triangles, rectangles and trapezoids over and over to get the areas needed for the formula. 2017: Shares of aggregate income Quintile Share of income Cumulative...

3. Represent the following information in a Lorenz curve. Make sure that the diagram is correctly...

3. Represent the following information in a Lorenz curve. Make sure that the diagram is correctly labeled. Bottom Fifth Second Fifth Third Fifth Fourth Fifth Top Fifth 3.8 9.3 15.1 23 48.9

The closer the income Lorenz curve is to the line of equality, A) the more equal...

The closer the income Lorenz curve is to the line of equality, A) the more equal is the income distribution. B) the less equal is the income distribution. C) the more unfair is the income distribution. Most people will not pay privately for police services because the A) marginal social benefits are less than the marginal social cost. B) marginal private benefits are greater than the marginal social cost. C) marginal private benefits are less than the marginal private cost....

a) Plot the Lorenz curve for the income distribution: (2,2,4,6,8,20,30,40,60,100) Consider an income redistribution that takes...

a) Plot the Lorenz curve for the income distribution: (2,2,4,6,8,20,30,40,60,100) Consider an income redistribution that takes 20% of income from each of the three richest individuals and distribute equally to individuals that have an income below the poverty line (9). Plot the Lorenz curve again to demonstrate that inequality has decreased. What happened to the coefficient of variation between the two periods? What can you conclude about the change in inequality between periods from this?

Draw the Lorenz curve and explain what the gini coefficient and robinhood index are. Explain differences...

Draw the Lorenz curve and explain what the gini coefficient and robinhood index are. Explain differences between the two, and how it is an effective index. Thoroughly explain each index. Also discuss the Lorenz curve and its relation to the gini cofficient index and the robinhood index.

What is a Lorenz curve? don’t draw , please describe the picture inwords! labeling the axes.

Consider a community with ten persons. a. Plot the Lorenz curve for the income distribution (2,2,4,6,8,20,30,40,60,100)...

Consider a community with ten persons. a. Plot the Lorenz curve for the income distribution (2,2,4,6,8,20,30,40,60,100) b. Consider an income redistribution that takes 20% of income from each of the three richest individuals and distribute equally to individuals that have an income below the poverty line(9). Plot the Lorenz curve again to demonstrate that inequality has decreased. c) Show on the same diagram the Lorenz curve for the income distribution (8,18,20,22,26,28,30,32,40,48)

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