In year 1, a country has a population of 10 people; 5 of whom have an income of $2 and the other five have an income of $3. In year 2, the higher income group has changed; instead of 5 people earning $3, 3 now earn the same $3 and 2 earn $10.50. (15 points total)

c. Plot the Lorenz curves for both years on the same graph. (5 points)

d. What has happened to income inequality? Why? (5 points)

e. Calculate the Gini coefficient for year 1. (5 points)