Based on a study, the Lorenz curves for the distribution of incomes for bankers and actuaries are given respectively by the functions 9 f(x) = ² 1 10 + 22 10 and g(x) = 0.54x³.5+0.46x (a) What percent of the total income do the richest 20% of bankers receive? Note: Round off to two decimal places if necessary. (b) Compute for the Gini index of f(x) and g(x). What can be implied from the Gini indices of f(x) and g(x)?
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- Based on a study, the Lorenz curves for the distribution of incomes for bankers and actuaries are given respectively by the functions 1 9 x + x² 10 10 and g(x) = 0.54x³.5 +0.46x (a) What percent of the total income do the richest 20% of bankers receive? Note: Round off to two decimal places if necessary. (b) Compute for the Gini index of f(x) and g(x). What can be implied from the Gini indices of f(x) and g(x)?Assume that there are two types of individuals in the population: Type A and Type B with the corresponding fractions fi and f2. The levels of ability for the two types are: α and aв, with αA > αB. Suppose also that Type A lives for T₁ years, while Type B lives for TB years. Briefly answer/evaluate FOUR out of the following six statements: A. If the financial resources available for a Type B individual are greater than those avail- able for a Type A individual, it is possible that the former will invest more in his/her human capital. B. Suppose that human capital is not productive, which of the two types will get more investment in schooling? C. Suppose that the government provides all wages and sets all wages to be the same. How would that affect the incentives of the two groups to invest in human capital?Under current law, most Social Security recipients do not pay federal or state income taxes on their Social Security benefits. Suppose the government proposes to tax these benefits at the same rate as other types of income. What is the impact of the proposed tax on the optimal retirement age?
- Assume that you want to decide whether Country A or Country B to live You have only information about cumulative percentage of income distribution functions of (14)/(15)x^(2)+(1)/(15)x for country A and (11)/(12)x^(2)+(1)/(12)x for country B. A)Which country do you prefer and why? B)Prove your decision numerically,graphically, and with respect to relevant economics theory?Suppose a small country called "Mamidas" is experiencing an aging population, leading to an increase in the number of retirees and a decline in the labor force participation rate. As a result, the government decides to implement an antipoverty policy to provide financial support to the elderly population. The policy aims to ensure that retired individuals have a minimum income to cover basic living expenses. Given the following information: The total number of retirees in Mamidas is 10,000. The poverty threshold for retirees is set at $20,000 per year. The average annual retirement income before the antipoverty policy is $16,000 per retiree. Calculate the total annual cost of the antipoverty policy for the government of Mamidas. Assume for this case that all retirees earn the average income.Using Lerner index
- “It will be difficult to solve South Africa’s extreme inequality problem without more direct wealth redistribution efforts, according to French economist Thomas Piketty. Piketty, who was the keynote speaker at a webinar celebrating 100 years of economics at the University of the Witwatersrand, was responding to debates around the creation of a basic income grant in South Africa.” Source: https://mg.co.za/business/2022-09-06-direct-wealth-distribution-needed-to-fix-sas-extreme-inequality-says-piketty/ Which of the following statement is correct? a. Thomas Piketty believes that a basic income grant is necessary to reduce income inequality b. if instituted, the basic income grant would increase income inequality c. if instituted, the basic income grant would have NO effect on income inequality d. Income inequality is caused by government wealth redistributionAnswer the following sub-questions using economic theory, the principal agent theory and empirical evidence. Most UK and American CEOs are paid significantly more than the average employee of their firms. Does this fact suggest that CEOs are overpaid? French and German CEOs earn considerably less than US CEOs, does this suggest that US CEOs are overpaid? The firm’s stock market price is uncorrelated with the FTSE100 index. In economic terms, does it make sense to pay the firm’s CEO based on the FTSE100 index? Explain. Taking into account the article by Bebchuk et al “The Wages of Failure”, discuss the advantages and disadvantages of incentive pay and the problems of incentive pay in the case of Bear Stearns and Lehman Brothers. Also discuss reforming incentive pay to deal with the problems unearthed at Bear Stearns and Lehman BrothersHow do the strategic asset allocations of investors with and without income from labour differ?
- If in 2009 Indonesia had a Gini index of income distribution of 36.8 and Brazil had a Gini index of 53.9 this means: Select one: That the income distribution was more equal in Brazil than in Indonesia.. That 36.8% of the population in Indonesia and 53.9% of the population in Brazil had an income that was below the average off their respective country. That only 36.87% of the population in Indonesia and 53.97% of the population in Brazil participate in the income redistribution policies of their respective country. O c. Od. That the income distribution was more equal in Indonesia than Brazil. O a. O b.Charter Savings, a financial firm, distributes a portion of the profits resulting from improvements in productivity and efficiency among its employees. If the company enjoys an improvement of \\( \\$ 45,000,60 \\) percent of the improvement is the company's share. The other 40 percent is distributed among the employees in the company. What is being exemplified in this scenario?Suppose the bottom 50 percent of a population (in terms of earnings) all receive an equal share of p percent of the nation’s income, where 0 ≤ p ≤ 50. The top 50 percent of the population all receive an equal share of 1 − p percent of the nations income. Calculate the Gini coefficient as an expression of p