1. Suppose that the economy of Loserville has the following distribution of income: first quintile 10% of aggregate income second quintile 10% of aggregate income third quintile 15% of aggregate income fourth quintile 20% of aggregate income fifth quintile 45% of aggregate income a. From the information provided, please derive a Lorenz Curve for Loserville. Show graphically. b. From the Lorenz Curve you have drawn, find the Gini Coefcient. c. How does Loserville compare to the United States economy? 2. Suppose that a ton of soybeans currently sells for $4,000 in the United States, and for 2,000 in Belgium. The exchange rate is 1 = $1.25, and it costs $500 to ship a ton of soybeans between the United States and Belgium. a. Can you get rich in this market? Why or why not? Explain. b. In the long run, what would you expect to happen to the price of soybeans in the U.S. and Belgium? What would be the price differential? c. Assume that prices are fixed. According to Purchasing Power Parity Theory, how will exchange rates adjust? 3. Suppose that you have two choices to invest $100,000 for one year. First, you could purchase a U.S. bond that pays 5% interest for the year. Second, you could purchase a British bond that pays 4% for the year. Assume that both bonds mature in one year. The exchange rate is currently $1 = 0.75. a. If you expect the exchange rate to be $1 = E1 when the bonds mature next year, which bond should you purchase? Why? What is your profit in each case? b. If you expect the exchange rate to be $1 = 0.4 when the bonds mature next year, which bond should you purchase? Why? What is your profit in each case? 4. Suppose that the economy of Laborville consists of the following individuals: Zachary is employed part time as a bookkeeper. Yvette sells marijuana but doesn't have any other job. Xavier just joined the Navy. Wanda is employed as a jazz musician