[5 marks} A. country's Lorentz come, 1,; = Me), provides us with insight into the country's income inequality. In particular, if the point (, } is on the Lorentz curve, then this means that the bottom {1% of households receive 3.5% of the country's total income. In this context, the line 3; = m is called the perfect equality line (do you see why?). The Gini index of a country is dened to be the area. of the region between the line y = :1: end the country's Lorentz curve 3,: = Me) on the interval [0,1], and can be used to measure the income inequality of the country. Suppose there are two hypothetical countries A and B with Lorentz curves: LA(:r.) = $3, Lg(m) = sin (get) Emcee (gm) - (e) We can see that the point (0.5, 0.125} is on country A's Lorentz curve 3; = LA(s). From this, what can we conclude about the income distribution of the country A? (b) Compute the Gini indices of the countries A and B. Round your answers to the nearest 10th. (c) Based on your previous result, which country has higher income inequality? (Resource: Ehttps : {fen ,wihiped ia . orgfuikifGinLcoeff i cientp |countries.by-income-eqna111:in