/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Q.4 a. What is the value of the Gini... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 30: Q.4 (page 690)

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?

Short Answer

Expert verified

a.33.33%

b.50%

Step by step solution

01

Given Information

The Gini coefficient is the proportion of the region between the line of amazing equity and the line of wonderful inequality. Greater inequality implies higher coefficient as well as the other way around.

02

Explanation Part (a)

a. We know,Gini CoefficientisA/(A+B)

Area B = 2 Area A

Hence the Gini coefficient is A/(A+B)=A/3A=1/3

which is 33.33%

03

Explanation Part (b)

b. We know,

Area B = Area A

Hence, the Gini coefficient is A/(A+B)=A/2A=1/2

which is50%

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

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?

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?

Why do you suppose that choosing other increments besides \(15,000 or \)30,000 can yield even more distributional variations of households within these seven income groupings?

(Hint: what do you think could happen if one were to broaden the income increments to \(100,000 or narrow them to \)5,000 while holding the number of income groups equal to seven?)

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?

During the past decade, many members of the baby boom generation have passed through ages ranging from the middle 40s to the late 50s. Do you suppose that the fact that there have been more members of this generation than other generations in the population during this past decade tends to imply that there was higher or lower measured inequality over the period? Why?
See all solutions

Recommended explanations on Economics Textbooks

Taxation Economics

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.