Eco 2023: Micro Homework #15 Paige     Quintile 1 Quintile 2 Quintile 3 Quintile 4 Quintile 5 7

Eco 2023: Micro

Homework #15

Paige

1. The table above shows the income share of each quintile in country X.                          20 pts.

1. Is the distribution of income more or less equal than in the U.S.?  
2. Find the cumulative income shares for the bottom 40%, 60% and 80%.

2. Use the graph above to find the following. (answers will be approximations)                                                                                                                                                         (30 pts)

1. The % of national income earned by the bottom quintile for Country Y:
2. The % of national income earned by the bottom quintile for Country X.
3. The % of national income earned by the bottom 60% of Country Y.
4. The % of national income earned by the bottom 60% of Country X.
5. The % of national income earned by the top quintile for Country Y:
6. The % of national income earned by the top quintile for Country X.

3. There are 20 million households in Country X and 4 million of them are below the poverty line.  What is the poverty rate for Country X?                                                                     (10 pts)

4. Suppose the economy were very strong and unemployment very low.  Wages after inflation rise for most Americans by about 3% and for highly skilled workers by 7%.  The stock market soars and home prices rise dramatically.  If all other things are equal, what is the likely effect on the poverty rate?  On the distribution of income as measured by the quintile approach (more equal, less equal or unchanged)?                                         (10 pts)

5. Find two websites relating to poverty.  Try to find them from different points of view – i.e. one more conservative, one more liberal or one on absolute poverty and one on relative poverty. Provide the link and then give a summary of each with some comparison of the differences.                                                                                                       30 pts.