Choose all that apply. Imagine an economy of 10 individuals. Their annual income

ID: 1192604 • Letter: C

Question

Choose all that apply. Imagine an economy of 10 individuals. Their annual incomes are reported below. Imagine that $100 of Oprah’s income is transferred to Anna. What is true? John - $1000 Kitty - $800 Walter - $200 Steve - $500 Samuel - $800 Bob - $300 Salman - $700 Dora - $600 Anna - $100 Oprah - $900 1. the poorest 40% of the population's income share grows from about 13.6% to about 18.6%. 2. The poorest 20% of the population's income share grows from about 5.0% to about 6.8% 3. The richest 20% of the population's income share falls from about 32.2% to about 30.5%.

Explanation / Answer

2, 3 ARE TRUE.

BEFORE TRANSFER

AFTER TRANSFER

SHARE OF POOREST 40%

1100/5900= 18.65%

1200/5900= 20.33%

SHARE OF POOREST 20%

300/5900= 5.08%

400/5900= 6.78%

SHARE OF RICHEST 20%

1900/5900= 32.2%

1800/5900= 30.5%