According to the “World View” below, World View: Glaring Inequalities In Namibia

Question

According to the “World View” below,

World View: Glaring Inequalities

In Namibia,

(a) What percentage of total output is received by the richest 10 percent of households?

Instructions: Enter your response as a percent rounded to the nearest whole number.

%

(b) How much output did this share amount to in 2014, when Namibia’s GDP was $14 billion?

Instructions: Enter your response rounded to one decimal place.

$  billion

(c) With a total population of 2 million, what was the implied per capita income of

(i) The richest 10 percent of the population?

Instructions: Enter your response rounded to the nearest whole number.

$

(ii) The remaining 90 percent?

Instructions: Enter your response rounded to the nearest whole number.

$

World View: Glaring Inequalities

Inequality tends to diminish as a country develops. In poor nations, the richest tenth of the population typically gets 40 to 50 percent of all income—sometimes even more. In developed countries, the richest tenth gets 20 to 30 percent of total income.

Explanation / Answer

a. As seen from the graph, the percentage of total output by the richest 10% of households in Namibia is 55%

b. If GDP = $14 billion, then this would be = 55% * 14 billion = $7.7 billion

c.i. Per capita of the richest 10% population = 7,700,000,000/(0.10 * 2,000,000)
= 7,700,000,000/200,000 = $38,500

c.ii. Per capita of the remaining 90% = 0.45 * 14 billion/(0.90 * 2 million)
= 6,300,000,000/1,800,000 = $3,500

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