UM Effect on Poverty Questions
Description
Answer the following questions:
Carefully graph the Lorenz curve, labeling the axes.
Explain how to find the Gini coefficient, graphically.
- Brazilànational income is about $300 billion. What is the approximate dollar income of the bottom 20%? Bottom 40%?
- Brazilàpopulation is approximately 150 million. Suppose that each household makes the average income for its quintile. What is the level of poverty if the poverty line is $400 per capita?
- Suppose one percent of national income was transferred from the richest 20% of households to the poorest 20% of households. Show the effect on relative inequality. Under the same transfer, what is the effect on poverty?
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