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Chapter 15: Q. 44 (page 379)

In country A, the population is 300 million and 50

million people are living below the poverty line. What is the poverty rate?

Short Answer

Expert verified

16.67%

Step by step solution

01

Step1. Introduction

Poverty rate is a measure of the percentage of people living below the poverty line. It is an indicator of how serious the poverty problem is in an economy.

02

Step2. Calculation

Poverty rate as calculated from the given information:

Povertyline=No.ofpeoplebelowthepovertylineTotalpopulation×100Povertyline=50million300million×100Povertyline=16.67%

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Most popular questions from this chapter

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.

Imagine that the government reworks the welfare policy that was affecting Jonathan in question 1, so that for each dollar someone like Jonathan earns at work, his government benefits diminish by only 30 cents. Reconstruct the table from question 1 to account for this change in policy. Draw Jonathan’s labor-leisure opportunity sets, both for before this welfare program is enacted and after it is enacted.

Describe how each of these changes is likely to affect poverty and inequality:

a. Incomes rise for low-income and high-income workers, but rise more for the high-income earners.

b. Incomes fall for low-income and high-income workers, but fall more for high-income earners.

A group of 10 people have the following annual incomes: \(24,000, \)18,000, \(50,000, \)100,000, \(12,000, \)36,000, \(80,000, \)10,000, \(24,000, \)16,000. Calculate the share of total income that each quintile receives from this income distribution. Do the top and bottom quintiles in this distribution have a greater or larger share of total income than the top and bottom quintiles of the U.S. income distribution?

What is the safety net?
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