Todaro & Smith – Economic Development 12th edition
Problem set – Chapter 5
The following income distribution data are for Brazil.
|
Quintile Percent Share |
|---|
| Lowest 20% 3.0% |
| Second quintile 6.9% |
| Third quintile 11.8% |
| Fourth quintile 19.6% |
| Highest 20% 58.7% |
| Highest 10% 43.0% |
- 1. Carefully graph the Lorenz curve, labeling the axes.
- 2. Explain how to find the Gini coefficient, graphically.
- 3. Brazil’s national income is about $300 billion. What is the approximate dollar income of the bottom 20%? Bottom 40%?
- 4. Brazil’s population 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?
- 5. Suppose one percent of national income were 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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