Reference no: EM131484737

Question: If income were perfectly equally distributed, the poorest 20 per cent of individuals or families would receive 20 percent of the economy's total income, the second poorest 20 percent of individuals or families would receive 20 percent of the economy's total income, and so on, and the richest 20 percent of individuals or families would receive 20 percent of the economy's total income. In such a case of perfect equality, each individual's or family's income would be equal to per capita income. Everyone would receive the same income. However, in the real world income is distributed unequally so that a country's per capita income is not necessarily telling us much about the living standard of all the population. This problem highlights how the average income measure may not give a full picture of the living standards of an economy if income distribution is highly skewed. In Uganda, the poorest 20 percent of the population received 6.2 percent of total income while the richest 20 percent received 63.5 percent of total income of the country. Given that income per capita for Uganda was $310 in 2004, what was the average income per capita of the poorest 20 percent and of the richest 20 percent of the population? What was the average income of the remainder of the population?