Which of the following is NOT true about the Gini coefficient? Countries with higher Gini coefficients are less developed than those with lower Gini coefficients An increase in the Gini coefficient means that there is more inequality in a country It is equal to 2 times the area above the Lorenz curve and under the line of equality It cannot be less than zero nor greater than 1.

Which of the following is NOT true about the Gini coefficient? Countries with higher Gini coefficients are less developed than those with lower Gini coefficients An increase in the Gini coefficient means that there is more inequality in a country It is equal to 2 times the area above the Lorenz curve and under the line of equality It cannot be less than zero nor greater than 1.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter33: Income, Income Distribution, And Poverty

Section: Chapter Questions

Problem 12E

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Table 15.9 shows the share of income going to each quintile of the income distribution for the United Kingdom in 1979 and 1991. Use this data to calculate what the points on a Lorenz curve would be, and sketch the Lorenz curve. How did inequality in the United Kingdom shift over this time period? How can you see the patterns in the quintiles in the Lorenz curves?
If a country had perfect income equality what would the Lorenz curve look like?
Using two demand and supply diagrams, one for the low-wage labor market and one for the high-wage labor market, explain how information technology can increase income inequality if it is a complement to high-income workers like salespeople and managers, but a substitute for low-come workers like file clerks and telephone receptionists.
2.2 = X Suppose that the Lorenz Curve for country A is given by yA and for country B is yB mine which of the two countries has greater inequality in its income -0.3x2 + 0.7x. Use the Gini index to deter- distribution.
3. Suppose that the Lorenz Curve for country A is given by yA = 0.3x2 + 0.7x. Use the Gini index to deter- x2.2 mine which of the two countries has greater inequality in its income and for country B is yB = distribution.
How does the Gini ratio relate to the Lorenz curve? Why can’t the Gini ratio exceed 1? What is implied about the direction of income inequality if the Gini ratio declines from 0.42 to 0.35? How would one show that change of inequality in the Lorenz diagram?
A typical Lorenz Curve, extracted from the Textbook, is shown below: e 100 Lorenz curve (actual distribution) 60 Perfect equality 40 B 20 Complete inequality D 0 20 40 60 80 100 Percentage of households Point d on the curve is best explained as 55% of households earn about 55% of the national income 50% of households earn about 80% of the national income 80% of households earn about 80% of the national income 80% of households earn about 55% of the national income Percentage of Income 80