Each year, everyone consumes whatever their income is that year (that is, there is no saving and no borrowing). Currently, 20 residents are 10 years old, 20 residents are 20 years old, 20 residents are 40 years old, 20 residents are 60 years old, and 20 residents are 70 years old.

a. Study the income distribution among all residents of Metropolis. Split the population into quintiles according to their income. How much income does a resident in the lowest quintile have? In the second, third, fourth, and top quintiles? What share of total income of all residents goes to the residents in each quintile? Construct a table showing the share of total income that goes to each quintile. Does this income distribution show inequality?

b. Now look only at the 20 residents of Metropolis who are currently 40 years old, and study the income distribution among only those residents. Split those 20 residents into quintiles according to their income. How much income does a resident in the lowest quintile have? In the second, third, fourth, and top quintiles? What share of total income of all 40-year-olds goes to the residents in each quintile? Does this income distribution show inequality?

c. What is the relevance of these examples for assessing data on the distribution of income in any country?