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4. (15 points) Consider the two 5 person economies given below: Persons Wealth (Country A) Wealth (Country B) Person 1 10 10 Person 2 10
4. (15 points) Consider the two 5 person economies given below: Persons Wealth (Country A) Wealth (Country B) Person 1 10 10 Person 2 10 10 Person 3 20 20 Person 4 30 20 Person 5 30 140 (a) (7 points) Plot the Lorenz curve for both the economies. (b) (2 points) Which economy has a higher Gini coefficient? (c) (3 points) What is the range of inequality for each economy? Which economy has a higher range? (d) (3 points) Is the range as a measure of inequality, in general, Lorenz consistent? If yes, why? If no, why not
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