1. Income inequality and the poverty rate The following table summarizes the income distribution for the town of Perkopia, which has a population of 10 ,000 people. Every individual within an income group earns the same income, and the total annual income in the economy is $500,000,000. 5 supose that in 2019, the poverty line is set at an annual income of $40,850 for an individual. The data in the table suggest that there was income inequality from 2001 to 2019. Complete the following table to help you determine the poverty rate in Perkopia in 2019 . To do this, begin by determining the totat income of alf individuals in each quintile using the fact that total annual income in the economy is $500,000,000. Next, determine the income of an individual in each quintile by dividing the total income of that quintile by the number of people in that quintile. (Hint: Recan that Perkopia has a population of 10,000 people.) Finally, determine whether the individual income for cach quinthe falls below the poverty line of s40, 850. Complete the following table to help you determine the poverty rate in Perkopia in 2019 . To do this, begin by determining the fotal income of all individuals in each quintile using the fact that total annuat income in the economy is $500,000,000. Next, determine the income of an individual in each quintile by dividing the total income of that quintile by the number of people in that quintile. (Hint: Recall that Perkopia has a population of 10,000 peopie.) Finaliy, determine whether the individuat income for each quintile falls below the poverty line of sto,850. Using the information in this table, the poverty rate in Perkopia in 2019 is Suppose that the government introduces a welfare program in which any indlvidual with an income of less than 540,850 per year receives a lump-sum transfer payment of $3,000 from the government. Assume that, in the short run, there is no change in labor-supply behavior among the people in Perkopia. In the year 2019, the poverty rate after the introduction of the welfare program in Perkopia is - - Again, suppose the government introduces a welfare program in which any individual with an f less than $40,850 receives a lump-sum transfer payment of $3,000 from the government, Van, a resident of Perkopia who currently overtime and earn an additional $1,500 this year. Using the information in this table, the poverty rate in Perkopia in 2019 is Suppose that the government introduces a welfare program in which any 10% W with an income of less than $40,850 per year recelves a lump-sum transfer payment of $3,000 from the government. Assume that, in the sho 20% here is no change in labor-supply behavior among the people in Perkopia, In the year 2019 , the poverty rate after the introduction of the welfare pro 50% Perkopia is transfer payment of $3,000 from the government. Van, a resident of Perkopia who currently earns an income of s40,050, has the opportunity to work overtime and earn an additionat $1,500 this year. Which of the following statements are correct? checkan that apply. Van may accept the overtime if he feels that taking it will increase the chances of his receiving a significant promotion. Van would gain more income by turning down the overtime than he would if he accepted the overtime. The $3,000 in aid presents a disincentive for van to make more than $40,850 per year
