Consider South Africa in the 1990’s where 90% of the population earn 35 % of income.

Draw the Lorenz curve for South Africa in the 1990’s. 

Calculate the Gini coefficient for South Africa in the 1990’s. Show all workings. The area between the Lorenz curve and the line of equality is .22. 

Explain why this Gini is lower than we expect it to be? 

List and explain three problems with the Lorenz curve and Gini coefficient measures of inequality.