Attempts:4 5. Income inequality and the poverty rate The following table summari
ID: 1160610 • Letter: A
Question
Attempts:4 5. Income inequality and the poverty rate The following table summarizes the income distribution for the town of Perkopia, which has a population of 10,000 Do No Harm: 4/6 Aa Aa The total annual income in the economy of Perkopia is $500,000,000 Share of Total Income in Perkopia (%) Third Quintile 16.6 15.5 15.8 15.1 Highest Quintile 44.5 46.2 46.8 49.0 Lowest Year 1993 1999 2005 2011 Second Quintile 10.1 9.6 8.8 7.2 Fourth Quintile 24.7 24.9 24.9 25.2 Quintile 3.8 3.7 3.5 The data in the table suggest that there was income inequality from 1993 to 2011 Suppose that in 1999 the poverty line is set at an annual income of $26,000 for an individual. If every individual within an income group earns the same income, then the poverty rate in Perkopia in 1999 is 60% 40% 10% 50% 20% pose that Again, suppose that in 1999 the poverty line is set at an annual income of $26,000 for an in the government introduces a welfare program in which any individual with an income of less receives a lump-sum transfer payment of $2,500 from the government. per year Assume that in the short run there is no change in labor-supply behavior among the people in Perkopia and that every individual within an income group earns the same income. In the year 1999, the poverty rate in Perkopia is 50% 2596 40% 8096 20% o O Again, suppose that in 1999 the poverty line is set at an annual income of $26,000 for an individual and that the government introduces a welfare program in which any individual with an income of less than $26,000 receives a lump-sum transfer payment of $2,500 from the government. Juanita, a new resident of Perkopia, currently earns an income of $25,500, has the opportunity to work overtime and earn an additional $1,000 this year. Which of the following statements are correct? Check all that apply Juanita should turn down the extra money from the overtime even if she feels that taking it will increase the chances of her receiving a promotion. Juanita would maintain a higher income by turning down the overtime than by accepting it. The $2,500 in aid presents a disincentive for Juanita to make more than $26,000 per year ONA 3.162004-2016 Aplia. All rights reserved. © 2013 Cengage Learning except as noted. All rights reserved. Grade It Now Save & Continue Continue without savinExplanation / Answer
The data suggest there is more income inequality or there was an increase in invome inequality from 1993 to 2011 because in 2011, lower quintile(meaning poor) are getting lower share of income where Higher quintile gets higher share leading poorer more poor amd richer more richer.
MCQ ans is C
$2500 in aid makes disincentives for Juanita to work extra time.
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