Consider a 12-person economy where the individuals are employed equally across the sectors. If the modern urban wage = £8, the informal urban wage = £3, and the tradition rural income = £1, what is the squared poverty gap index (P2) given that the poverty line = £1.25? Suppose that rural income now rises to £2, other things being equal, how would you characterise and show this type of growth?
Consider a 12-person economy where the individuals are employed equally across the sectors. If the modern urban wage = £8, the informal urban wage = £3, and the tradition rural income = £1, what is the squared poverty gap index (P2) given that the poverty line = £1.25? Suppose that rural income now rises to £2, other things being equal, how would you characterise and show this type of growth?
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter28: Income Inequality And Poverty
Section: Chapter Questions
Problem 6CQ
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Consider a 12-person economy where the individuals are employed equally across the sectors. If the modern urban wage = £8, the informal urban wage = £3, and the tradition rural income = £1, what is the squared poverty gap index (P2) given that the poverty line = £1.25? Suppose that rural income now rises to £2, other things being equal, how would you characterise and show this type of growth?
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