Study Questions and Problems #$1$

The following table contains data on the distribution of income in the countries of France and Canada.

Compute the cumulative distribution of income for each country to complete the table.

Percentage of Families

France Percentage Share

France Cumulative Share

Canada Percentage Share

Canada Cumulative Share

Lowest fifth $17\mathrm{.}7$

$9$

Second$-$lowest fifth $19\mathrm{.}9$

$14\mathrm{.}2$

Middle fifth $20\mathrm{.}4$

$17\mathrm{.}5$

Second$-$highest fifth $20\mathrm{.}7$

$21\mathrm{.}9$

Highest fifth $21\mathrm{.}3$

$37\mathrm{.}4$

Using data from the previous table, construct the Lorenz curve for each country on the following graph. The black line shows perfect equality. Use the blue points $($circle symbol$)$ to construct the Lorenz curve for France starting at $(0,0)$ and use the orange points $($square symbol$)$ to construct the Lorenz curve for Canada starting at $(0,0).$ Line segments will automatically connect the points.

France

Canada

$0$

$20$

$40$

$60$

$80$

$100$

$100$

$80$

$60$

$40$

$20$

$0$

CUMULATIVE PERCENTAGE OF MONEY INCOME

CUMULATIVE PERCENTAGE OF FAMILIES

Perfect Equality Line

True of False: Of the two countries, France has a lower income inequality than Canada.

True

False

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