Consider the town of Econville with a population of 5,000 people. There are 1,00

Question

Consider the town of Econville with a population of 5,000 people. There are 1,000 high school students, 1,000 undergraduate students, 1,000 graduate students, 1,000 economics professors, and 1,000 retired economists. Suppose that the total annual income in the economy is dollar 100 million: Each high school student earns dollar 7,000 annually; each undergraduate earns dollar 15,000 annually; each graduate student earns dollar 25,000 annually; each professor earns dollar 50,000 annually; and each retiree earns dollar 3,000 annually. The following chart shows the income distribution for the town of Econville. Suppose that the government sets the poverty line at an annual income of dollar 5,000. The percentage of people with annual incomes below the poverty line in Econville is Which of the following sequences correctly orders the people of Econville from the bottom fifth to the top fifth of income distribution? High school students, retirees, graduate students, professors, undergraduates Graduate students, professors, high school students, undergraduates, retirees Retirees, high school students, undergraduates, graduate students, professors Retirees, graduate students, undergraduates, high school students, professors Given your previous answers, the income distribution in Econville show income inequality.

Explanation / Answer

20% is below poverty (1000/5000)*100 = 20% retiree.

Option c.

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