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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

What goods and services would you include in an

estimate of the basic necessities for a family of four?

Jonathon is a single father with one child. He can work as a server for \(6 per hour for up to 1,500 hours per

year. He is eligible for welfare, and so if he does not earn any income, he will receive a total of \)10,000 per year.

He can work and still receive government benefits, but for every \(1 of income, his welfare stipend is \)1 less. Create

a table similar to Table 15.4 that shows Jonathan’s options. Use four columns, the first showing number of hours

to work, the second showing his earnings from work, the third showing the government benefits he will receive,

and the fourth column showing his total income (earnings + government support). Sketch a labor-leisure diagram of

Jonathan’s opportunity set with and without government support.

Describe how a push for economic equality might

reduce incentives to work and produce output. Then

describe how a push for economic inequality might not

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Suppose there are two possible income distributions in a society of ten people. In the first distribution, nine people would have incomes of \(30,000 and one person would have an income of \)10,000. In the second distribution, all ten people would have incomes of $25,000.

a. If the society had the first income distribution, what would be the utilitarian argument for redistributing income?

b. Which income distribution would Rawls consider more equitable? Explain.

c. Which income distribution would Nozick consider more equitable? Explain.

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