1.Create a Lorenz curve for the data. Click on the tab in the
Your l'urn (30 points) I will provide you a spreadsheet with the productivity data for the I writing assignment. Econ" Students who were assigned their correct writing hand tended to write enough sentences to earn extra credit points, whereas those who were assigned their wrong writing hand earned fewer points than what the assignment was worth. 1. Create a Lorenz curve for the data. Click on the tab in the spreadsheet called, Quintiles. 2. Design a negative income tax to address the inequality associated with this activity, but maintains incentives for hard work. Your policy must be somewhat fiscally responsible (look at the overall points earned and think of this as your budget, and try (just try) not to go over your budget by more than 10% of current points earned; the logic behind this is to prevent you from creating more points out of thin air (e.g., we cannot print more money to help those living in poverty). Explain below and enter your policy and new data on the spreadsheet provided. H33 F H K L M N o P O R D Enter "Reduction in Earnings" E Gov't support = Guarantee - reduction Tax Amount sentences points earned = completed sentences/10 13 1.3 13 1.3 13 1.3 18 1.8 18 1.8 Net Income Describe your Negative Income Tax on the YourTurn assignment What is the Government Support that is guaranteed to each individual? For every $1 earned, how much is the governemt support reduced by? At what income level (1.e., points earned) is the support zero? After this level of points, what is the tax rate? COMPLETE THE COLUMNS (SEE THE NOTES FOR AN EXAMPLE, OR THE PRACTICE PROBLEM) 18 19 20 1.8 1.9 20 21 21 21 LORENZ CURVE INFORMATION The quintiles are shown in the next worksheet tab (see bottom of page and click on quintiles. 70 students completed the assignment I have sorted the results in ascending order by sentences completed. By sorting, I then was able to classify the "poorest" to the "richest" to make quintiles. 22 22 25 25 A Writing with 1 correct hand? 2 No 3 No 4 No 5 No 6 Yes 7 Yes 8 No 9 No 10 No 11 No 12 Yes 13 Yes 14 No 15 No 16 No 17 No 18 Yes 19 No 20 No 21 No 22 No 23 Yes 24 No 25 Yes 26 No 27 No 28 No 29 No 30 No 31 No 32 No 33 No 34 No 35 No 36 No 37 No 38 Yes 20 Yes results NOTE: Correct Hand = Incorrect Hand = 39 2 2 2.1 2.1 2.1 2.2 2.2 2.5 2.5 2.6 2.6 2.7 2.7 2.7 2.7 3 3.1 3.2 3.2 3.2 3.3 3.4 3.6 3.8 4 26 26 27 27 27 27 30 31 32 32 32 34 31 Ask yourself: How fair is this? If I determine grades by this exercise, students endowed with their correct hand, for the most part, earned more points. This is represents how much luck plays a role in determining your economic standing. If you are born with "resources" (brains, brawn, wealth), you are more likely to succeed. For example, those born with "resources" have lower oc of going to college. These people can earn money on assets that they were given at birth; they just don't have to work hard. 34 Bottomline: we can not underestimate the role that luck plays and overestimate hard work. Think of how much harder students would have to "write" who did not get to write with correct hand. 36 38 40 43 4.3 4.3 43 44 44 4.4 4.4 4.4 16 results 44 16 quintiles + PROTECTED VIEW Be carefuliles from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View. Enable Editing H33 X D E H 1 K L M z o P Q R L 4.3 4.4 4.4 4.4 4.6 4.6 4.8 60 52 Yes A B 35 No 43 36 No 44 37 No 44 38 Yes 44 39 Yes 46 40 Yes 46 41 No 48 42 Yes 50 43 No 51 44 Yes 53 45 Yes 53 46 Yes 57 47 Yes 58 48 Yes 59 49 Yes 59 50 Yes 51 Yes 60 62 53 Yes 63 54 Yes 64 55 Yes 65 68 57 Yes 69 58 Yes 70 70 60 Yes 72 61 Yes 72 62 Yes 73 63 Yes 73 64 Yes 79 65 Yes 79 66 Yes 80 67 Yes 81 68 Yes 82 69 Yes 85 70 Yes 99 71 Yes 107 72 Total of all points 3239 73 Average 46.27142857 74 results quintiles 5 5.1 5.3 5.3 5.7 5.8 5.9 5.9 6 6 6.2 6.3 6.4 6.5 6.8 6.9 7 7 7.2 7.2 7.3 7.3 7.9 7.9 56 Yes 59 Yes 8 8.1 8.2 8.5 9.9 10.7 323.8 4.625714286 + Type here to search o 9 2:09 P 3/27/28 G10 X fa B G H N o Q R S T V w A 1 RESULTS 2 1 1.3 3 2 1.3 D F Percentage Cumulative Quintiles 8.00% 8.00% bottom 20% 12.35% 20.35% second 20% 18.75% 39.10% middle 20% 26.25% 65.35% fourth 20% 34.65% 100.00% top 20% LORENZ 8% 20% 39% 65% 100% ideal | K L M QUINTILES 2 3 4 5 bottom 20% second 20% middle 20% fourth 20% top 20% 8.00% 12.35% 18.75% 26.25% 34.65% 8.00% 20.35% 39.10% 65.35% 100.00% if you enter percnetages in these columns, the ideal chart will build 4 3 1.3 5 4 1.8 6 5 1.8 6 1.8 1.9 7 8 9 10 7 8 2 2 9 10 11 11 12 13 2.1 2.1 Econ: Class Results 2.1 14 2.2 15 2.2 25.9 16 2.5 12 13 14 15 16 17 18 19 17 1 18 LORENZ 2.5 2.6 2.6 2.7 19 120% 20 2.7 20 21 22 23 24 25 21 22 0% 20% 40% 80% 60% 2.7 2.7 3 100% 100% 100% 23 bottom 20% second 20% middle 20% fourth 20% top 20% 24 3.1 Distribution 92% Choose as 25 3.2 MIDDLE 20% TOP 20% 26 27 80% IDEAL 26 3.2 28 27 3.2 65% 29 3.3 40 28 29 60% 30 3.4 BOTTOM 20% SECOND 20% MIDDLE 20% FOURTH 20% TOP 20% 31 30 3.6 3.8 32 1 Econ: Ideal 33 4 40% 39% 4.3 34 35 4.3 4.4 20% 31 32 33 34 35 36 37 38 39 40 20% 36 37 38 39 4.4 4.4 1 8% 4.6 4.6 40 0% 0 1 2 3 4 5 6 41 4.8 results quintiles + 100 2:10 PM H Type here to search i ()) D 3/27/2021 Your l'urn (30 points) I will provide you a spreadsheet with the productivity data for the I writing assignment. Econ" Students who were assigned their correct writing hand tended to write enough sentences to earn extra credit points, whereas those who were assigned their wrong writing hand earned fewer points than what the assignment was worth. 1. Create a Lorenz curve for the data. Click on the tab in the spreadsheet called, Quintiles. 2. Design a negative income tax to address the inequality associated with this activity, but maintains incentives for hard work. Your policy must be somewhat fiscally responsible (look at the overall points earned and think of this as your budget, and try (just try) not to go over your budget by more than 10% of current points earned; the logic behind this is to prevent you from creating more points out of thin air (e.g., we cannot print more money to help those living in poverty). Explain below and enter your policy and new data on the spreadsheet provided. H33 F H K L M N o P O R D Enter "Reduction in Earnings" E Gov't support = Guarantee - reduction Tax Amount sentences points earned = completed sentences/10 13 1.3 13 1.3 13 1.3 18 1.8 18 1.8 Net Income Describe your Negative Income Tax on the YourTurn assignment What is the Government Support that is guaranteed to each individual? For every $1 earned, how much is the governemt support reduced by? At what income level (1.e., points earned) is the support zero? After this level of points, what is the tax rate? COMPLETE THE COLUMNS (SEE THE NOTES FOR AN EXAMPLE, OR THE PRACTICE PROBLEM) 18 19 20 1.8 1.9 20 21 21 21 LORENZ CURVE INFORMATION The quintiles are shown in the next worksheet tab (see bottom of page and click on quintiles. 70 students completed the assignment I have sorted the results in ascending order by sentences completed. By sorting, I then was able to classify the "poorest" to the "richest" to make quintiles. 22 22 25 25 A Writing with 1 correct hand? 2 No 3 No 4 No 5 No 6 Yes 7 Yes 8 No 9 No 10 No 11 No 12 Yes 13 Yes 14 No 15 No 16 No 17 No 18 Yes 19 No 20 No 21 No 22 No 23 Yes 24 No 25 Yes 26 No 27 No 28 No 29 No 30 No 31 No 32 No 33 No 34 No 35 No 36 No 37 No 38 Yes 20 Yes results NOTE: Correct Hand = Incorrect Hand = 39 2 2 2.1 2.1 2.1 2.2 2.2 2.5 2.5 2.6 2.6 2.7 2.7 2.7 2.7 3 3.1 3.2 3.2 3.2 3.3 3.4 3.6 3.8 4 26 26 27 27 27 27 30 31 32 32 32 34 31 Ask yourself: How fair is this? If I determine grades by this exercise, students endowed with their correct hand, for the most part, earned more points. This is represents how much luck plays a role in determining your economic standing. If you are born with "resources" (brains, brawn, wealth), you are more likely to succeed. For example, those born with "resources" have lower oc of going to college. These people can earn money on assets that they were given at birth; they just don't have to work hard. 34 Bottomline: we can not underestimate the role that luck plays and overestimate hard work. Think of how much harder students would have to "write" who did not get to write with correct hand. 36 38 40 43 4.3 4.3 43 44 44 4.4 4.4 4.4 16 results 44 16 quintiles + PROTECTED VIEW Be carefuliles from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View. Enable Editing H33 X D E H 1 K L M z o P Q R L 4.3 4.4 4.4 4.4 4.6 4.6 4.8 60 52 Yes A B 35 No 43 36 No 44 37 No 44 38 Yes 44 39 Yes 46 40 Yes 46 41 No 48 42 Yes 50 43 No 51 44 Yes 53 45 Yes 53 46 Yes 57 47 Yes 58 48 Yes 59 49 Yes 59 50 Yes 51 Yes 60 62 53 Yes 63 54 Yes 64 55 Yes 65 68 57 Yes 69 58 Yes 70 70 60 Yes 72 61 Yes 72 62 Yes 73 63 Yes 73 64 Yes 79 65 Yes 79 66 Yes 80 67 Yes 81 68 Yes 82 69 Yes 85 70 Yes 99 71 Yes 107 72 Total of all points 3239 73 Average 46.27142857 74 results quintiles 5 5.1 5.3 5.3 5.7 5.8 5.9 5.9 6 6 6.2 6.3 6.4 6.5 6.8 6.9 7 7 7.2 7.2 7.3 7.3 7.9 7.9 56 Yes 59 Yes 8 8.1 8.2 8.5 9.9 10.7 323.8 4.625714286 + Type here to search o 9 2:09 P 3/27/28 G10 X fa B G H N o Q R S T V w A 1 RESULTS 2 1 1.3 3 2 1.3 D F Percentage Cumulative Quintiles 8.00% 8.00% bottom 20% 12.35% 20.35% second 20% 18.75% 39.10% middle 20% 26.25% 65.35% fourth 20% 34.65% 100.00% top 20% LORENZ 8% 20% 39% 65% 100% ideal | K L M QUINTILES 2 3 4 5 bottom 20% second 20% middle 20% fourth 20% top 20% 8.00% 12.35% 18.75% 26.25% 34.65% 8.00% 20.35% 39.10% 65.35% 100.00% if you enter percnetages in these columns, the ideal chart will build 4 3 1.3 5 4 1.8 6 5 1.8 6 1.8 1.9 7 8 9 10 7 8 2 2 9 10 11 11 12 13 2.1 2.1 Econ: Class Results 2.1 14 2.2 15 2.2 25.9 16 2.5 12 13 14 15 16 17 18 19 17 1 18 LORENZ 2.5 2.6 2.6 2.7 19 120% 20 2.7 20 21 22 23 24 25 21 22 0% 20% 40% 80% 60% 2.7 2.7 3 100% 100% 100% 23 bottom 20% second 20% middle 20% fourth 20% top 20% 24 3.1 Distribution 92% Choose as 25 3.2 MIDDLE 20% TOP 20% 26 27 80% IDEAL 26 3.2 28 27 3.2 65% 29 3.3 40 28 29 60% 30 3.4 BOTTOM 20% SECOND 20% MIDDLE 20% FOURTH 20% TOP 20% 31 30 3.6 3.8 32 1 Econ: Ideal 33 4 40% 39% 4.3 34 35 4.3 4.4 20% 31 32 33 34 35 36 37 38 39 40 20% 36 37 38 39 4.4 4.4 1 8% 4.6 4.6 40 0% 0 1 2 3 4 5 6 41 4.8 results quintiles + 100 2:10 PM H Type here to search i ()) D 3/27/2021
