3. Constructing a Lorenz curve from personal income data The Smith quintuplets a

Question

3. Constructing a Lorenz curve from personal income data The Smith quintuplets and the Jones quintuplets grew up across the street from each other. Now in their 40s, the men earn the incomes shown in the following table Income Income Smith CDollarsones 150,000 onesollars) Al Smith Karl Jones 15,000 smith50,000 arry Jones 45,000 05,000 Chris Smith 5,000 Moe Jones ave Smith100,000 Nate Jones8 75,000 60,000 Ed Smith 125,000 Oliver Jones Total for Smiths 500,000. Total for Joneses300000 Let's think of the Smiths and the Joneses as two economies and analyze income inequality within each of the economies Bob Smith's share of the total Smith income is while Moe Jones's share of the total Jones incoe is HEL

Explanation / Answer

1

a)Bob Smith share in total income of smiths =50000/500000=0.1 i.e- 10%

b)Moe Jones share in total income of jones=105000/300000=0.35 i.e 35%

The SMITH economy has less income inequality than the JONES economy

Related Questions

Navigate

• Browse (All)
• Browse 3
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.