Test: ECO 202 Final Exam 00:3323 Submit Test This Question: 1 pt 93 of 95 (71 co

Question

Test: ECO 202 Final Exam 00:3323 Submit Test This Question: 1 pt 93 of 95 (71 complete) Assume a society consists of two economic groups: one group is rich and the other group is poor Suppose that 50 percent of the population is rich while the other 50 percent of the Scenario A: The rich have $60,000 each, while the poor have $2,000 each. Scenario B: The rich have $7,500 each, while the poor have $750 each If you only care about average income and not about equity, you would prefer ].which has an average hoorne ofs» (Enter your response to the nearest dollar.) Now suppose that you only care about equity or inequality In this case, you would prefer which has a rich to poor ratio of (Round your responseto one dermal place) In this case, you would prefer because it has lower poverty

Explanation / Answer

1- in case one the average income is

60000*k+2000*k / 2k = 31000

as we can see that 50% is poor and 50% is rich then both can be considered as a constant K

second case

thus option A is selected

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