Principles of Economics 2e

# Problems

Principles of Economics 2eProblems

44.

In country A, the population is 300 million and 50 million people are living below the poverty line. What is the poverty rate?

45.

In country B, the population is 900 million and 100 million people are living below the poverty line. What is the poverty rate?

46.

Susan is a single mother with three children. She can earn $8 per hour and works up to 1,800 hours per year. However, if she does not earn any income at all, she will receive government benefits totaling$16,000 per year. For every $1 of income she earns, her level of government support will be reduced by$1. Create a table, patterned after [link]. The first column should show Susanâ€™s choices of how many hours to work per year, up to 1,800 hours. The second column should show her earnings from work. The third column should show her level of government support, given her earnings. The final column should show her total income, combining earnings and government support. Based on the table you created, what are the likely impacts of this kind of assistance program on Susan's incentive to work? Are there additional opportunity costs that may reduce her incentive to work?

47.

A group of 10 people have the following annual incomes: $55,000,$30,000, $15,000,$20,000, $35,000,$80,000, $40,000,$45,000, $30,000,$50,000. Calculate the share of total income each quintile of this income distribution received. 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 for 2005?

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