Chapter 15 Assignments Name _____________________________ 15.1: Use the two diff

Question

Chapter 15 Assignments                                                                  Name _____________________________

15.1: Use the two different distributions of income in the table below to answer the questions that follow.

Which curve has a more equal distribution?

Are these distributions more or less equal than that for the United States today? (Reference the textbook).

15.2: The following households each have four persons. Their annual incomes are as follows:

Family

Income

Income-to-

Poverty Ratio

Classification

The Aikens:

$25,600

The Browns:

$21,800

The Carlyles:

$18,500

The Donaldsons:

$11,300

Assume that the poverty threshold for a household of four is $23,000.

Calculate the income deficit and the income-to-poverty ratio for each family.

Classify each family as either not poor, near poor, poor, or severely poor.

Family

Income

Income-to-

Poverty Ratio

Classification

The Aikens:

$25,600

The Browns:

$21,800

The Carlyles:

$18,500

The Donaldsons:

$11,300

Quintile Poorest Second Middle Fourth Richest 11.2 12.0 21.2 26.0 29.6 10.5 11.6 20.3 25.7 31.9

Explanation / Answer

The follwoing table shows cumulative distribution of A and B accoridng to percentage of income in descending order:

B has more unequal income distribution since richest the starting four quintiles hold lower income percentage as compared to A.

Income to poverty ratio = (Income / threshold )

A B Poorest 11.2 10.5 Second 23.2 22.1 Middle 44.4 42.4 Fourth 70.4 68.1 Richest 100 100

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