5) Which of the following statements about the Gini Coefficient are correct? (2p
ID: 1166575 • Letter: 5
Question
5)
Which of the following statements about the Gini Coefficient are correct?
(2pts)
It ranges in value from -1 to 1.
The higher the value the more equal the income distribution.
It is equal to the area between the line of perfect income equality and the actual Lorenz curve divided by the entire triangular area under the line of perfect income.
All of the above
None of the above
6)
The textbook attributes income inequality to differences in which of the following?
(2pts)
preferences about work and leisure
innate abilities and attributes
luck
risk-taking
All of the above
None of the above
7)
Recent statistics show that "within-group" income inequality has been rising, a fact that Frank and Cook (Economics 24/7) attribute to the growing importance of
(2pts)
winner-take-all markets.
the veil of ignorance.
a bending Lorenz Curve.
Marginal Productivity Theory.
a rising Gini Coefficient.
8)
Which of the normative standards of income distribution involve choices made behind a veil of ignorance?
(2pts)
The marginal productivity standard.
The absolute income equality standard.
The Rawlesian standard.
All of the above
None of the above
9)
The method used by the U.S. government to define poverty is stated
(2pts)
in absolute terms terms and is based on the idea of the poverty line.
in absolute terms and is based on the unemployment rate and the inflation rate.
in relative terms and is based on the value of the Gini Coefficient.
in relative terms and is based on the shape of the Lorenz Curve.
Explanation / Answer
5. Ginni coeffcient is equal to the area between the line of perfect income equality and the actual lorenz curve divided by the entire triangular area under the line of perfect income. Only this statement is correct. Because ginni coeffficient ranges from 0 to 1 .And the higher the value the more unequal the income distribution is.
7. Recent statistics show "within group " income inequality has been rising , a fact that Frank and cook attributes to the growing mportance of a rising Ginni coefficient.
8. Rawlesian standard is the Normative standards of income distribution involve choice behind a veil of ignorance.
9. The method used by the U.S government to define poverty is stated in absolute terms and is based on the idea of the poverty line.
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