9 . Understanding income inequality Consider the town of Acaford with a population of 5,000 people. There are 1,000 high school students, 1,000 undergraduate students, 1,000 graduate students, 1,000 economics professors, and 1,000 retired economists. Suppose that the total annual income in the economy is $100 million: Each high school student earns $3,000 annually; each undergraduate earns $15,000 annually; each graduate student earns $25,000 annually; each professor earns $50,000 annually; and each retiree earns $7,000 annually. The following chart shows the income distribution for the town of Acaford. 50 40 SHARE OF TOTAL INCOME(Percent) 20 10 High School Undergrads Grads Profs Retirees Suppose that the government sets the poverty line at an annual income of $20,000. The percentage of people with annual incomes below the poverty line in Acaford is 60% . Points: 1/ 1 Explanation: Close Explanation The poverty rate is the fraction of the total population living below the poverty line of $20,000 in annual income. A high school student earns $3,000 annually, a retiree earns $7,000 annually, while an undergraduate earns $15,000 annually. Therefore, high school students, retirees, and undergraduates are below the poverty line, and since there are 1,000 people in each group, there are 3,000 people below the poverty line. The