Chapter 30: Q.13 (page 690)
The area labelled A is one-fourth of the area denoted B. What is the value of the Gini coefficient?
the value of the Gini coefficient is
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Identify whether each of the following proposed poverty measures is an absolute or relative measure of poverty, and discuss whether poverty could ever be eliminated if that measure were utilized.
a. An inflation-adjusted annual income of \(25,000 for an urban family of four
b. Individuals with annual incomes among the lowest 15 percent
c. An inflation-adjusted annual income of \) 10,000 per person
a. What is the value of the Gini coefficient if area B is twice as large as area A?
b. Suppose that the Lorenz curve becomes more bowed, with the result that area B becomes exactly the same size as area A. What will be the new value of the Gini coefficient?
How might a state such as Arkansas adjust its administration of income maintenance programs to reduce or eliminate the marriage penalty? (Hint: What if the state were to base programs' benefits on total dollars of income received by both adults combined whether or not they were married?)
Consider the following estimates from the early 2010s of shares of income for each group. Use graph paper or a hand-drawn diagram to draw rough Lorenz curves for each country. Which has the most nearly equal distribution, based on your diagram?
Suppose that a government agency guarantees to pay all of an individual's future health care expenses after the end of this year so that the effective price of health care for the individual will be zero from that date onward. In what ways might this well-intended policy induce the individual to consume "excessive" health care services in future years?
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