1. Consider 2-person economy: Person 1's income is Y₁=0.5 and Person 2's income is Y2=0.8. Suppose that the poverty line is Y_p=1.2.

If 0.1 is transferred from person 1 to person 2, what's the best poverty measure that reflects this change in income distribution and inequality among poor people?

a. Headcount measure

b. P₂

c. P₁

d. Average Poverty Gap

e. Total Poverty Gap

2. One of the following is not a method to represent overall income inequality

a. GDP per capita

b. Gini coefficient

c. ratio of the top income decile to the lowest income decile

d. Lorenz curve