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Consider the following income distribution in dollars for a country where the poverty line is set to 10: Individuals A B C D E F
Consider the following income distribution in dollars for a country where the poverty line is set to 10: Individuals A B C D E F G H I J Total Income 5 7 9 11 18 30 50 60 90 120 Answer the following 3 parts showing your work and formulas. a) (20 points) Calculate the economy's total income. What share of that total income does the bottom quintile (the bottom 20\%) of the population make? What about the top quintile? b) (20 points) Compute the headcount ratio, the poverty gap, and the poverty gap squared. c) (10 points) If you are the government and have an extra 1 dollar of income and your sole goal is to decrease the poverty gap squared, what would you do with it? Explain
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