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Chapter 15: Q. 22 (page 378)

Who is included in the top income quintile?

Short Answer

Expert verified

The top income quintile is the fifth quintile (the last quintile) consisting of all higher incomes that comes just after the fourth quintile.

Step by step solution

01

Step 1. Quintile

Quintile is a method of measuring income inequality using the following steps.

1. Rank all the incomes from the lowest to the highest.

2. Divide all the incomes into five groups having equal numbers of people. Each of these groups is called quintile.

3. For calculating income distribution, divide the income of each quintile by the total income of all people.

02

Step 2.  The top income quintile

The top income quintile includes the fifth quintile or the last group of people having higher incomes (that comes just after the fourth quintile) and the last highest income in the series.

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Most popular questions from this chapter

How does a society or a country make the decision about the tradeoff between equality and economic output? Hint: Think about the political system.

What is the poverty line?

Redistribution of income occurs through the federal income tax and government antipoverty programs. Explain whether or not this level of redistribution is appropriate and whether more redistribution should occur.

Exercise 15.2 and Exercise 15.3 asked you to

describe the labor-leisure tradeoff for Jonathon. Since, in the first example, there is no monetary incentive for

Jonathon to work, explain why he may choose to work

anyway. Explain what the opportunity costs of working

and not working might be for Jonathon in each example.

Using your tables and graphs from Exercise 15.2 and Exercise 15.3, analyze how the government welfare system affects Jonathan’s incentive to work.

How does the TANF attempt to loosen the poverty trap?
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