Chapter 30: Q.15 (page 691)
Based on your answers to Problems 30-13 and 30-14, when A increased, did the degree of income inequality increase or decrease? Explain why your answer makes sense by referring to the implied change in the shape of the Lorenz curve.
when A increased, the degree of income inequality increased
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In which the poverty rate has risen in some years and fallen in others but since 1985 has tended to lie in a range between 10 percent and just over 15 percent. If the government's official poverty rate has been based on an absolute measure of poverty instead of a relative measure, would the data plot have tended generally to have sloped upward over time or to have sloped downward? Explain.
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?)
What do you think motivates proposals to require sellers of disposable diapers to print messages on diapers encouraging parents to tell stories for or read to their babies or young children?
Take a look at both Figure 30-8 and Figure 30-9. When health care programs such as Medicare, Medicaid, and the Affordable Care Act's health exchange system were created, Congress based projected costs on quantities of health care consumed at the time the programs were implemented. Was this a reasonable assumption given that the programs all cut out-of-pocket payments for beneficiaries? Explain.
Estimates indicate that in recent years, the poorest 40 percent of the population earned about 15 percent of total income in Argentina. In Brazil, the poorest 40 percent earned about 10 percent of total income. The next-highest 30 percent of income earners in Argentina received roughly 25 percent of total income. In Brazil, the next-highest 30 percent of income earners received approximately 20 percent of total income. Can you determine, without drawing a diagram (though you can if you wish), which country's Lorenz curve was bowed out farther to the right?
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