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The table shows the distributions of market income and income after tax and benefits in an economy. Households Market income Income after tax and benefits
The table shows the distributions of market income and income after tax and benefits in an economy. Households Market income Income after tax and benefits (millions of dollars) Lowest 20 percent 5 13.0 Second 20 percent 10 14.0 Third 20 percent 20 19.0 Fourth 20 percent 25 21.5 Highest 20 percent 40 22.5 Draw the Lorenz curve for income before taxes and benefits. Pass the curve through the points when the cumulative percentages of households are 0, 40, 80, and 100 percent. Draw a point on the curve to show the cumulative percentage of income received by the lowest 40 percent of households. Label it Before. Draw the Lorenz curve for income after taxes and benefits. Pass the curve through the points when the cumulative percentages of households are 0, 40, 80, and 100 percent. Draw a point on the curve to show the cumulative percentage of income received by the lowest 40 percent of households. Label it After
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