Will anything happen to the lorenz curve

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Reference no: EM131091604

The income share data below for Indonesia is from the World Bank, although it has been rounded very freely.

The lowest-income quintile earns, in total, $64.60 b.

The second income quintile earns $96.05 b.

The middle quintile: $132.60 b.

The fourth quintile: $185.30 b.

The highest-income quintile: $371.45

Oil prices have collapsed, which reduces tax revenues in Indonesia, an oil exporter. Suppose there is a proposal to tax each household an additional $200.

Will anything happen to the Lorenz curve? Illustrate and explain in a few words. If you’re not sure, do a calculation for one quintile and see what happens.

Reference no: EM131091604

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