Reference no: EM131568679

Below is the income distribution data for Brazil.

Quintile Percent Share

Lowest 20% 3.0%

Second quintile 6.9%

Third quintile 11.8%

Fourth quintile 19.6%

Highest 20% 58.7%

Highest 10% 43.0%

Instructions:

• Carefully graph the Lorenz curve, labeling the axes.
• Explain how to find the Gini coefficient, graphically.
• Brazil's national income is about $300 billion. What is the approximate dollar income of the bottom 20%? Bottom 40%?
• Brazil's population is approximately 150 million. Suppose that each household makes the average income for its quintile. What is the level of poverty if the poverty line is $400 per capita?
• Suppose one percent of national income were transferred from the richest 20% of households to the poorest 20% of households. Show the effect on relative inequality.
• Under the same transfer, what is the effect on poverty?